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For some retired planners, not the best holiday present

A recent Investment News article makes the central point that life never does stop being complicated for some retired individuals and families.

Consider the case of a retiree living in California or elsewhere who is a Medicare enrollee receiving the important benefits provided for by that government program.

Medicare's monthly charge for the so-called "Part B" component is paid directly by most enrollees through a deduction in received Social Security benefits. The amount assessed is determined through variously defined income tiers; the higher the annually reported adjusted gross income, the higher the Part B premium.

Investment News notes that many individuals in the upper-income tiers have recently received information that is a most unpleasant surprise.

It comes via what is termed the Income-Related Monthly Adjustment Amount, which has recently been modified for individuals and families with relatively higher incomes.

The result: Things that are done during the course of the year (for instructive purposes, the article refers to gains on a house sold and proceeds from the sale of securities) can easily increase yearly income to the point where a Medicare recipient is thrown into a higher payment bracket.

That in turn reduces monthly Social Security benefits, because more is then taken out of checks to pay for the increased Medicare payment.

It can be complicated. As Investment News notes, many retirees are seeing price jumps and correspondingly lower Social Security checks even when their annual income has not increased a dime, given that income tiers have been reconfigured.

Effective estate planning is a complementary exercise in that a sound strategy necessarily considers many things in a coordinated and interactive way. A proven estate administration attorney with a strong background in tax matters can help individuals and families create a plan that makes optimal sense in an overall way, especially where retirement- and tax-related concerns are present.

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