Make The WRONG CHOICE At 65 And You Could Get Stuck FOR LIFE | April 30th, 2026

Is taking Social Security at 65 a smart move… or a costly mistake?

In this video, a financial planner breaks down what really happens when you take your Social Security benefits before full retirement age, and how that decision can impact your income over time.

We’ll walk through the pros and cons of taking Social Security early, how your monthly benefit is affected, and what factors you should consider before making your decision. From reduced payments to long-term income strategy, this is one of the most important choices in retirement planning.

If you’re approaching retirement, already collecting benefits, or trying to decide when to take Social Security, this is something you need to understand — especially as it relates to your overall Medicare and retirement strategy.

Have questions about your situation? Join us live on Medicare School Daily or reach out — we’re here to help you make confident, informed decisions.

Transcript

SPEAKER_04 0:03

If you are turning 65 soon, or maybe you're 66, 67, but you're starting Medicare for the first time, welcome. You're in the right place. We're gonna be explaining and sharing uh one of the big mistakes that people make, that we see a lot of people make whenever they're first uh starting Medicare. And I know you don't want to be in that group of people that make the wrong choice that make this mistake. So uh welcome. We're excited to share with you everything we know about Medicare turning 65. We've been helping people retire and go on Medicare since 2011. So it's been 15 years. Uh, I think we've collectively helped a hundred thousand people now at this point, and we've got uh, you know, a YouTube channel and digital workshops that have educated millions around the country. We've seen a lot of mistakes, is my point. And so in today's episode, we're gonna talk to you about the biggest mistake, and then there's a couple of smaller mistakes that we need to talk about too that are important. So welcome to the show. My name is Josh Music. This is my dad, Marvin Music. We would love to have you be a part of the show uh today. If you have a Medicare question, a Social Security question, a retirement question, maybe an experience, something that happened to you that's like, wow, that was a big deal, and you're already on Medicare, or you're starting Medicare, or there was a mistake that you made that you want to warn others about. We would love to have you call in because we all get smarter when we talk to each other, when we share stories, when we share experiences, so that we can make sure other people don't make the same mistakes. Um, MedicareSchool.com is an insurance brokerage. We have a big focus on education. We do a daily show, we do twice-a week live streams, we have digital workshops, we have a Facebook group that you can join, we have the number one Medicare educational YouTube channel on the planet, and we've got a team of about a hundred people right outside these studio doors that would love to help you. So if you have a question about Medicare, if you need to get a Medicare supplement plan set up, if you need to compare plan G to plan N, if you need to get a Medicare Advantage plan in place or drug coverage, or dental coverage, or vision coverage, we are here and ready to help you. Um we're licensed in all 50 states, so it doesn't matter where you live, we can help you get on Medicare. Our services are no cost to you. We do not work for free. We are paid by the insurance companies, uh, just like any insurance broker would would do. Um check us out on Google, Trustpilot, Facebook. Uh we've got thousands and thousands of five-star reviews. We are not perfect, but every day we do try to get a little bit better. So welcome to the show. Uh, if you want to call and be a part of today's show, the phone number is 800-824-2004, 800-824-2004. We'd love to talk to you if you need help with your insurance plans. The phone number to reach us is 800-782-6676-800-782-6676. Call, schedule appointment, talk to one of our uh licensed agents today. Let's hop into it. Okay. All right. Attorney 65, maybe you're 66, 67. This is your first time on Medicare. Right. What are the mistakes that people need to be aware of so that they, you know, don't get caught in a situation they should be.

SPEAKER_03 3:00

Sure. Let's let's do talk about um the m kind of the minor mistakes first and then let's talk about the major one because uh we don't want anyone to make any mistakes, so we're gonna show you how to avoid making these mistakes. So uh I think one that uh is very common is people oftentimes uh don't understand the importance of choosing the right enrollment period to come into Medicare. And so if you're making a decision now and you're not sure exactly what to do, let's let's go through that. And it's very simple. Uh if you are in one of these five situations, you must go on Medicare at 65. And if you don't, you're making a mistake. Number one, you have to. That's exactly just five. It's real real simple. And so number one, if you are no longer uh working or your spouse is no longer working, meaning you do not have an employer-provided option available to you, you must go on Medicare at 65. Uh that means you must enroll into Medicare during what we call the initial enrollment period, and it only lasts seven months. And that is three months before your birth month, your birth month, and then three months after. That's the seven-month window. So if you do not go on Medicare during that time, and uh because you don't have an employer plan, uh you've missed your initial enrollment period. Now, can you go into Medicare later? Yes, but it's gonna be problematic. You're gonna have penalties? You have penalties and it's restricted because then you're gonna have to use what uh what we call the general enrollment period, which is only the first quarter of the year. So if someone realizes I made a mistake and it's April, tough. They're gonna have to wait until the next year to enroll into Medicare. So you don't want that to happen to you. Uh so uh along with those same lines, uh, those that don't have employer plans, the same rules apply. We must start Medicare at 65 if you're covered by COBRA, covered by TRICARE, which is um a retired military, covered by small employer plans. Now, Josh, this is the one that many people miss.

SPEAKER_04 4:45

So not working must go on Medicare. Yeah, must be COBRA must go on Medicare. Which we should talk about that, right?

SPEAKER_03 4:52

TRICARE must go on Medicare. What's the fourth? Okay. The fourth one would be small employers, and that is defined by Medicare. If you are working for a company that has 19 employees or fewer on the payroll, that's a small employer plan. So what happens if you were to keep that insurance, which you can, most don't, but if you did, that's small. Oh no. A small employer plan move to this second payer position. You must put Medicare in the first payer position. And if you don't, you become the first payer. And then anyway, a bill, go to the hospital. Exactly. What's going to happen? Well, what's going to happen is uh the the portion that Medicare would have paid, which is awesome, now you're gonna have to pay that, right? Yeah. Okay, so that's what happens because you you you uh legally had legally had to put Medicare in the first payer position. So small employers, 19 or fewer, you must go on Medicare. And then the last group would be those that are on ACA plans, Affordable Care Act plans, or they went through the health care exchange system to get an individual plan or a family plan. And so what happens there is they technically could keep an ACA plan. You could, but you wouldn't want to because all the subsidies, the cost sharing reduction, the premium reduction, the premium tax credits that people get on ACA plans all go away when you turn 65. And uh many do not know that. And so uh those are the five groups of people.

SPEAKER_04 6:10

We talked to a lady yesterday. I don't know if you remember this. She turned 65 in July. Um and she was trying to like hack the system or whatever, and so she thought she would continue to get that subsidy until November. That's right. Because it was the last month of her whatever. Right. Of her IEP. Yeah. Yeah. But she technically like those subsidies would have been paid back, right? She did have to pay back.

SPEAKER_03 6:33

Exactly right. The birth month, they go away. Okay, birth month, they go away.

SPEAKER_04 6:36

She had a lot of bad advice given. Okay. So we got these five.

SPEAKER_03 6:39

So we have these five groups of people and they're and they're all in the same position. You must enroll in a Medicare. If you don't, you make a mistake. But uh so that's one. Now, one thing, another mistake that we see people often make is when they are uh covered by a mediocre group plan. So they have a group plan available, meaning there are 20 or more people that uh are on the payroll, you know, larger companies, but they're mediocre, uh, meaning you're paying too much money uh for uh uh uh you to be on that group plan. I mean $400, $500, $600 a month, and sometimes those are lousy plans. And so, in my opinion, if that's you, you're making a mistake because you have every right to go on Medicare while you continue working. You don't have to be on Social Security, you don't have to stay on the group plan, you can just take Medicare alone. So you can enroll into A and B, drop the group plan at 65, and uh uh and and and we would recommend you do that if indeed Medicare is a better option. So the mistake here really is not taking the time to compare. Uh take the time to lay both plans side by side, uh look at what your group plan is gonna cost you, the coverage, the deductible, the max out of pocket, and let's look at how Medicare would compare to that. And when you do that, oftentimes you will find, not always, but oftentimes you are gonna find that um uh Medicare is gonna make financial sense. Now, if you have a spouse that's covered by the group plan or children covered up to age twenty six on the group plan, you're probably not gonna do that. Uh but if Medicare makes sense, do it. Your employer has to let you go on Medicare. And many people do not realize that. Okay? And then another mistake that people make is let's say they have a good group plan and Medicare is not their best option. Well, stay on that group plan. Uh there is no problem doing that. But what you need to be mindful of uh is this uh you do not even have to take Medicare A. Many will hear you got to take A. Uh, if not, you'll be penalized. But you do not have to. Uh and you do not want to if you are contributing to a health savings account. Because once you enroll into Medicare A or B or both, you can no longer put new money into the HSA. So again, that's a mistake. You just shot yourself in the foot because uh you you you here you have this great advantage, this tax advantage of being able to put money into your HSA uh and now you enroll in A and you can no longer do that. And that can't be undone. You realize, Josh, that once someone has has A effective, it's gone into effect. Let's say I I put it, I said my my my is good uh my A is gonna be effective for one and it goes into effect. I cannot reverse that.

SPEAKER_04 9:03

There's no way.

SPEAKER_03 9:04

Yeah, there's no way at all. Now, let's say if I made a mistake and I I say I want to start A and that's gonna be July 1, well I can still reverse that. We can reverse the A application as long as A has not gone into effect. Oh, once it's started? Exactly.

SPEAKER_04 9:17

So if you apply for A, let's say 90 days in advance and it's just not there, could you say you don't want it? Exactly.

SPEAKER_03 9:24

Exactly right. If it hasn't gone to effect, you can typically reverse the decision. But once it has gone to effect, and the reason we know that is because when we look at the the 1763, what does it say? It it it says you can disenroll from a premium part A. Premium. So if it's premium, nobody's paying hardly any. Very few. But but we could not use that form if if A is free. So if it's gone into effect, you can't reverse it. So don't make that mistake. And again, you you will hear this from Social Security offices, you hear it from coworkers, you hear it from all kinds of people who say you have to take A, and if you don't take A, you'll be penalized. And that is not true. But we do recommend to take A. If you don't have an HSA. If you don't have an HSA. Trevor Burrus, Jr. Exactly right. Yeah, I make a big deal because. Pardon me? Well, what what what A does in that position, remember, we have a group plan that's 20 or more, so the group plan pays first. Okay. So when Medicare A takes the second payer position, it will not pay the deductibles, it will not pay co-pays, but it will pay coinsurance for you. And that's why you should enroll into A only if you don't have an HS.

SPEAKER_04 10:30

Now let's talk about Part A. So Part A only is for inpatient things. That's right. Right. So it's not to pay anything if you go to the urgent care or whatever. You gotta be admitted. That's good point.

SPEAKER_03 10:40

Good point. So this is gonna take care of you if you are hospitalized or skilled nursing.

SPEAKER_04 10:44

You know.

SPEAKER_03 10:46

Well, the truth is the majority of people today, uh, when they have a hospital claim, they do have some coinsurance responsibility. And so Medicare could pay that. So my suggestion to you is if that's you and you're still working, you don't have an HSA, let's go ahead and take A. Uh, and when you go to the hospital, if you had to, we're gonna give them both insurance cards. We're gonna give them our company card and our Medicare A and B card. And Medicare will coordinate the benefits for the coinsurance. They will pay some of that for you.

SPEAKER_04 11:11

If you are uh listening to this and you have had an experience, or maybe you're on uh an employer group plan and you have part A only, I would love to see like an explanation of benefits or some coordination of coverage. I don't know if you've seen any of that, but I would love call in, tell us your experience if you have uh an employer covered plan and you have part A and you've gone to the hospital and there was I'd love to just see kind of how that works. Because I've I've not ever seen it in an EOB on that. Right. Be helpful.

SPEAKER_03 11:37

Yeah, that would definitely pay. So that that's a mistake. And then really, let's talk about the big one, then we can you know start taking some questions. And the big one, folks, the big mistake. Yeah, the big mistake.

SPEAKER_04 11:45

That's right. Okay, so the the first mistake was kind of missing your enroll initial enrollment period. Enrolling at the wrong time. Exactly. You didn't know you had to enroll or and you did, or or maybe you you enrolled in A and you had an HSA, like those all those sorts of technical.

SPEAKER_03 11:59

Right. Yeah. And and I think another kind of uh let me just uh attach one more item to this that I think everyone needs to know. And so let's say that you uh are no longer working, but you're covered by your spouse's plan at work, um, and uh they're gonna continue to work, but you are already taking social security. What's gonna happen in your situation is you are gonna be automatically enrolled in a Medicare A and B. So let me re group. So we're saying you're on social security, automatically enrolled in A and B, Medicare card shows up a hundred days before your birth month, but you have a good group plan. Because your spouse is working. That's right, your spouse is still working. So in that situation, if that's you and your spouse is it's costing your spouse less than, let's say, $250 or less a month to cover you on a good group plan, then what I wouldn't ex uh encourage you to do is disenroll from part B. Uh go you have to keep A if you're on Social Security, but you do not have to keep the Part B. And the reason I'm saying this is because if you have a good group plan, who pays first? Your employer or your spouse's employer. And and Medicare is in the second payer position, and you are having to pay at least $202.90 a month. It's a waste of money. So my point is if that's you, when the Medicare card comes and we have a good group plan, you can disenroll from B by looking at the card, turn it around, turn it over, and on the back side, they give you the chance to check a box that says, I do not want medical insurance. And medical means part B. Hospital is part A, medical is part B. Check the box, sign your name, send the card back in, and then Medicare will drop the Part B. You don't have to pay the Part B premium, and now they'll send you a new card with Part A only. So I would do that. All right, let's talk about the the the biggest mistake that you can make, and that's this. Um, not understanding that you are given a once-in-a-lifetime opportunity to get any Medigap policy that is sold in your state with no health questions asked, no underwriting involved, all pre-existing conditions uh will have to be covered by the insurance company, meaning, regardless of how unhealthy you may be, that company will approve your application. And so that period of time is limited. Uh it is six months of your Medicare Part B date. And so you do not want to miss this, especially if you have health problems. Uh so what happens during this six-month window, it begins on our Part B date. So if I start Medicare, you start Medicare at 65, then you have six months from the B date. Let's choose me as an example. I started Medicare in January. And so my six months was January, February, March, April, May, June. So out of all the way from January 1 to June 30th to apply for a Medigap policy, uh, even if I was in the midst of cancer treatment, the insurance company would have to be. And what is a Medigap? Okay, what means a Medicare supplemental plan. Like a plan G, a plan G, a plan N.

SPEAKER_04 14:38

Not an advantage plan. Advantage plan doesn't have a well it doesn't have um medical underwriting. Yeah, ever. Yeah, that's right. Exactly right. But Medicare supplements.

SPEAKER_03 14:47

That's right. So Except. Except during this six-month window. So we don't want you to miss that opportunity. And so if someone decides to keep working for two more years, doesn't take A, doesn't take B, and now they start at 67, that's when the six-month window begins. And what I'm trying to show you and teach you is that uh the six months is tied to the B date. Now, from a practical standpoint, you don't have to wait until uh your Part B begins to actually apply. We can use the apply three months in some states, six months in other states. So we can apply in advance. Most people do that. And so if uh you're going on Medicare and you want a supplemental plan, this is the one time you never have to worry about underwriting. So take advantage of that Medigap OEP. So the penalty here is really not financial. It is that if you're unhealthy and you don't take advantage of this, then you may never ever get a Medicare supplemental plan unless you live in New York, Connecticut, or Massachusetts. Those three states do not live by that rule, but all the other 47 do. Interesting. Okay.

unknown 15:46

All right.

SPEAKER_04 15:47

So big mistake. Get your Medigap, your planning G Plan N, in place within six months of your Medicare Part B starting. And the like the technical logistical thing about this is you don't have to wait until the month that you turn 65. It's actually most insurance companies will take them between three and six months in advance. They the application. Yeah, they're not going to affect until your B date. Right, right. But they will take in advance so you don't have to be scurrying around trying to get it. Exactly. Exactly right. Okay. And guys, if you are listening to this and you need help with kind of figuring out your situation, or you need help choosing what Medigap plan is right, or maybe you think maybe I've made one of these mistakes, give us a call. Our office um line, if you want to have help from someone on our team, is 800-782-6676-800-782-6676. We would consider it an honor and a privilege to work with you. The kind of cool thing about working with us, I think that's different than most um brokers or whatever that you call, is when you call in, you are not going to be transferred to the other side of the world. Talking to someone in another country that doesn't speak your language natively. Um we're in the heart of America, we're in the Midwest, we're in Kansas City, where everyone comes to work every day to the same office, and we would love um to help you. Whenever you become a customer of MedicareSchool.com, what happens is you actually um get uh assigned or you get uh put into a pod of people. It's a small group of people that know you, they know your name. You have a dedicated client care manager. So if you move across town or you move across states or you lose your ID cards, or you have a billing issue, or a claims issue, or you need a whatever the situation is, you have a point of contact that's here in the United States that is able to talk to you, that knows your situation, can see everything about you, um, and can help you facilitate that change easily. Our whole goal is to make sure that not only in the beginning do you feel confident, but at every step as life changes, you've got somebody by your side. We'd love to help you. Phone number 800-782-6676. If you want to be a part of today's show, maybe you have a Medicare question, experience, social security question, something went bad, something went good, we'd love to hear your stories. The phone number to call into the show is at the bottom of the screen. It's 833-824-2004. This is your opportunity to talk to the nation's leading educator on Medicare in a non-sales environment. You can ask your questions, and guess what? We aren't gonna try to sell you anything on this show today. We wouldn't we wouldn't be able to. We just want to answer and help. Okay, let's just get to our first caller. We got Susan in South Carolina. Susan, are you there? Yes, I am. Hi, welcome to Medicare School Daily. What questions do you have?

SPEAKER_00 18:34

Well, I first I want to say I get a lot of information from your show and I love your show. Well, thank you. Second, uh I got Medicare in 2019. So I'm eligible for the F plan.

SPEAKER_02 18:49

Okay.

SPEAKER_00 18:50

I had um AARP United Healthcare Advantage Plan. It was great. I loved it, but last year they discontinued my particular plan. So then I was looking for a Medicare plan. And when I was trying to apply and everything, they were the agents, different agents were telling me that I'm only eligible for the F plan without going underwriting because I have a guaranteed right. Is that correct?

SPEAKER_03 19:19

That is correct. Yeah. Yeah, that is correct. Yeah. Yeah, guarantee the guaranteed issue is based upon when you started Medicare. So if a person starts Medicare prior to 1-1-2020, which you did, the guaranteed issue product would be the F plan. We start Medicare after 1-1-2020, then that guaranteed issue would be a G plan. So you were given accurate information. And that doesn't mean, Susan, you couldn't get a G or an N plan if you wanted, but you would have to go through the underwriting process.

SPEAKER_00 19:48

Right. Okay. And I have a diagnosis of uh COPD, so I guess I should just stick with the F plan then.

SPEAKER_04 19:56

Yes, sir. Are you so did you get switched over into an F plan? Yes. Okay. Okay. Yeah. How many w where are you? Are you in South Carolina? Okay. Sounds good. And so your plan with United Healthcare just pulled out. Was it a PPO plan? Yes. Yeah. So around the country, United Healthcare uh just discontinued so many of their PPO plans. Yeah. So you're not alone.

SPEAKER_03 20:20

Yeah, exactly. Well, actually, two and a half million people in total lost their vantage plans uh from 25 to 26. Two and a half million. That's a lot. A huge amount. Hey, by the way, Susan, what part of South Carolina do you live in? Uh Myrtle Beach. Myrtle Beach. Oh, it's wonderful. I want to tell you, my son Joshua was born in South Carolina. Yeah. He doesn't remember the name of the time.

SPEAKER_04 20:40

But I do remember vacationing in Myrtle Beach. Yeah. Did we go there? Yeah. We didn't know. We did.

SPEAKER_03 20:45

Yeah, we lived in Greenville. I went to school at uh Bob Jones University. And so uh Josh was born in that day they actually still were delivering babies at the school's hospital, but they don't no longer do that. But uh so that goes back a ways. Um uh you were born in what in 2001? I mean 91, yeah, 91. Yeah, sorry about that. He's making me 20 years old. I just curious where you live, but Myrtle Beach is that's a beautiful area. So, okay, so you went on to the first time. So let me ask you a question. Yeah, go ahead.

SPEAKER_00 21:20

Uh yeah, I'm on the F plan. I just started in January so far. It's been fine. Uh so I can't switch to another plan, like uh a less expensive plan like a G or a N, uh, because I would have to go through underwriting. And since I have a diagnosis of COPD, most likely I wouldn't be able to change plans.

SPEAKER_03 21:40

Yes, ma'am. You you definitely will not be able to. But I will say this to you, even I know Susan, you're you you know, G is going to be a little bit less expensive, but listen, you have a wonderful plan. Yeah. United Healthcare is a and listen, that they're they're they're they've through the years they've been very stable. I know the last couple of years they haven't been, and no one has been real stable. But I I if I were you I'd be hopefully you can afford the premium, but you're really, really in a very good position. What are you paying for that?

SPEAKER_00 22:06

Well I'm paying le I'm paying less than you are because I know you said that you pay two twelve. Yes, I I listen to you almost every day. But I pay uh 184 a month.

SPEAKER_04 22:18

For a plan F. Well, I mean that's I mean that's kind of really good. And you're 70 years old?

SPEAKER_00 22:24

I'm seven I'm gonna be seventy-two in June. Okay, yeah.

SPEAKER_04 22:28

72, 184, Florida Plan F, which is full coverage. Meaning you're not gonna have any bills at all. You can go see any doctor you want, any hospital you want. Um not that anyone, not that anyone wants wants to go to the hospital.

SPEAKER_00 22:42

Yes.

SPEAKER_04 22:42

All right.

SPEAKER_00 22:43

So I was listening to your I was listening to your show yesterday, and it was correct when you said you don't want to have to pay the premium, but you're glad that you have the premium, that you have the insurance. Exactly right. You have to look at it that way.

SPEAKER_03 22:57

Yeah, I would. I think that's the right way to look at it. Uh I hope you don't ever really need to use it extensively, but if you do, you'll be very grateful. I will tell you this. Uh we never have a a complaint ever. And we've been we've been in the insurance business 17 years, Medicare 15 years, uh, but we've never ever had a complaint on uh supplemental plants. You have people disappointed sometimes with pre-ingreases. But as far as the coverage and and the quality, I mean, you know, all hospitals take it. Um 99% of doctors are gonna see you, so you have no issues whatsoever. So I think your one eight your 184 is well spent.

SPEAKER_00 23:35

Okay. Well, thank you very much. I very much enjoy your show. Yeah, thank you.

SPEAKER_03 23:40

Appreciate you calling in, too.

SPEAKER_04 23:41

Good talk to you.

SPEAKER_00 23:42

Okay, take care. Bye-bye.

SPEAKER_04 23:44

Bye-bye. I didn't know COPD was a knockout. For sure a knockout. I thought it was like COPD mixed with like two or three medications. No. It's just if you have COPD, it's out. You'll then never take you. They won't. I haven't done a medsup application in a little bit. Or like rectinous health questions.

SPEAKER_03 23:58

Because it's yeah. It's chronic bronchitis and emphyseme is what it is. Okay. That's COPD. Yeah, they won't get it.

SPEAKER_04 24:04

What's the thing? So on the mutual almahol applications, like taking Eliquis.

SPEAKER_03 24:08

They I think they'll let it's um uh AFib. I think they're the ones that will take AFib as long as it's not.

SPEAKER_04 24:15

There's no there's one app there's one application. I just remember we used to fill it out all the time that was like obviously oxygen is a knockout. But I thought it was like taking three or more respiratory, like you know, inhalers or all these different things.

SPEAKER_03 24:29

I thought there was like a limit to the there is, however, what happens though, if someone says yes to the COPD question, then it's a knockout. Okay. But if someone just simply would say I have bronchitis, then they're gonna say are you taking three or more exactly. Then they're saying, Okay, okay, you're you you really do have COPD, you you just the doctor hadn't called it that yet. Yeah, because you're taking that many inhalers, so you have some kind of a you know serious issue. Yeah.

SPEAKER_04 24:54

If you're wondering like how you can get information from people that are on Medicare, um maybe you don't have any friends that are on Medicare, um, or maybe you don't trust your friends that are on Medicare. I don't know. If you want to talk to some folks that are on Medicare, you could join our Facebook group. Uh go to Facebook on your Facebook app, type in Medicare School Community. We have about 60,000 people in there that every day are asking questions, getting answers, talking to people about their experience. And so it's a great opportunity for you to just kind of learn from people that are already uh a year, two, three, four, five years ahead of you. So we've got a comment that was left in the group yesterday, actually an hour ago, uh, from Karen Buck. She says, How long does Irma last if you were penalized? And then second part of that, if you did a rollover but didn't receive a 1099, does that mean Irma is not an issue? Those are two very different questions, obviously related to the same topic. So Irma, first off, if you don't know what it is, uh if you make over a hundred and nine thousand dollars. For single. For single, two hundred and eighteen. If you're married, uh you are gonna pay more for your Medicare Part B and more for your Medicare Part D as in drugs. So both of those, there's gonna be, you could look at it like a surcharge, you could look at it like a tax, but basically saying you make high income, you're gonna have to pay a little bit for your Medicare Part B. So our first question is how long does ERMA last if you're penalized? Maybe speak to that, and then we'll go to the second part.

SPEAKER_03 26:21

Right. I just I do want to clarify for those of you that may not be familiar with it, ERM is an acronym, and it stands for income related monthly adjustment amount. So they're raising your Part B and Part B, Part B and Part D premiums because of high income. All right, so what happens, uh these uh ERMAs will be calculated every year. So what is happening now, if you're on Medicare in 2026, they established your Part B premium from your 2024 tax return. And that is line 11 plus line 2A. We call that the modified adjusted gross income. So again, I'm on Medicare 2026, they look at 2024. If my income was high above those thresholds of single above 109, 100 nine thousand, and the uh married filing a joint return above 218,000, then I'm gonna be assessed to this surcharge. But what happens, they recalculate them every year. So let's say I roll into 2027 and they look back at 2025, and now I have retired or summer retired and my income has gone down, uh, now I will not pay an IRMA. So the whole point is uh you're going to uh the these these are not lifetime. Now, uh they could be lifetime if your income stays up, which is a wonderful, wonderful problem to have. Uh, but uh if you're uh you retire or summer retire and that affects your income, then it again will just be recalculated on an annual basis. Again, line 11 plus line 2A is your modified adjuster gross income, and that's what determines whether we pay an IRMA or not.

SPEAKER_04 27:45

Okay. So how long does ERMA last if you are penalized? So they're only one year to time, two years. That's exactly right. Right. And then they're going to recalculate it every single year.

SPEAKER_03 27:54

Yeah, let's let's make a point here to you. Uh here's what happens. So let's say that I am on Medicare in 2026 and they looked at 2024, but I retired in 2025 or in 2026, then I can uh appeal the IRMA and say, don't look at 2024. I want you to look at my tax return of 2025, or you can even project for what you're gonna make in 2026, and that's part of the appeal process. Give them new numbers. And if your numbers are less, uh then they will drop off the IRMA, or we have clients right now that are still paying IRMA, but but as they retired or semi-retired, their income did go down, so they pay less of an IRMA. So even if we don't eliminate the IRMA totally, you can always appeal to reduce the IRMA. And it's well worth your time to do that. And if you're our client, we'll help you with this. We'll walk you through the process. We want to make sure it's done properly.

SPEAKER_04 28:43

Okay. So the second part of her question, uh if you did a rollover but didn't receive a 1099, does that mean IRMA is not an issue? To me, that's like you need to contact contact the institution that you did the rollover and get it 1099. It might seem nice to not have gotten it 1099.

SPEAKER_03 28:59

But they still could have reported that to the mail.

SPEAKER_04 29:07

You know, especially if it was a sizable rollover. Oh, absolutely. No, no, no, no. Let's let's talk about this though. So if you did a rollover, so a rollover, if you use that terminology, that generally means you're taking money from a 401k and moving it into an IRA. That's generally what a rollover is. That is a non-taxable event. Right. There's nothing so that wouldn't be reported.

SPEAKER_03 29:29

Yeah, I think I when I when I I you you said rollover, I heard I heard Roth conversion. Sorry about that.

SPEAKER_04 29:35

If you take money out of a if you if you do what's called a Roth conversion, maybe from a 401k to a Roth IRA or an IRA to a Roth IRA, then that is going to be an income issue. You're not gonna get exactly but if you did a rollover, then it's probably not an issue.

SPEAKER_03 29:49

True. True. Yeah, I don't know why my brain hurts. Well, mine did too, because Roth conventionalized like you can. So sorry about that. And and Josh is right. Yeah, yeah. The rollover is not a taxable event. Yeah. Um so you should not receive a 1099 R on that. Yeah. Okay.

SPEAKER_04 30:06

Okay, uh let's go to Dan uh calling in from Michigan. Dan from Michigan. Hello, are you there? Hello, Dan. Hi, how are you? What's your question, sir?

SPEAKER_01 30:20

Well, it's regarding the earnings test. I have uh regarding my spouse, actually. She uh became eligible for Medicare back in December 1st. Um she decided to retire on March 1st. Of this year? Of this year? Yes, sir. Okay, good. And because of that, he's on the earnings test limit of $2,040 per month. Okay. Correct.

SPEAKER_03 30:49

Well, it it just depends. Yeah, it okay. Yeah, here's the way that works. So when you're saying she retired March 1st, you're saying she did work uh uh uh January and February of this year.

SPEAKER_01 31:03

That's correct.

SPEAKER_03 31:04

Okay, very good. Okay, so what happens is um uh they're they're gonna look at uh one of two numbers this year. They're gonna look at the 24,480 as an annual number. So if she's then above that, then then they will begin in March 1 thereafter, they'll ask her or ask you uh on the application, did she make uh uh uh more than 2040? So it's an annual amount or it's the monthly amount the year that you retire.

SPEAKER_04 31:31

And and just to confirm, she hasn't started Social Security yet, correct? She's just retired.

SPEAKER_01 31:38

March 1st.

SPEAKER_04 31:39

Yeah, so has she started Medicare or is she on your coverage?

SPEAKER_01 31:43

Medicare uh December 1st of 2020.

SPEAKER_04 31:46

Oh, so she went ahead and started Medicare last year? Yeah, when she was first eligible, looks like that no application for Social Security has been done yet. Yes. Oh, it has. Okay, when did it start? March 1st.

SPEAKER_03 32:02

Okay, that sounds good. So here's our question, uh Dan. So this year, uh including her income at work, uh, which is all they're gonna look at anyway, so did she make above $24, uh $480 income, wages.

SPEAKER_01 32:18

Are you talking about only January, February? Yep, yes, January post-Run? No.

SPEAKER_03 32:24

No, she didn't. Okay. All right. So then she should have she should not have any earnings test there. Now, as we talk about March moving forward, is she gonna be above two is she working at all or is she totally retired? Part-time. Part time, will she be below the $2,040 a month?

SPEAKER_01 32:41

With some manipulation, yes.

SPEAKER_04 32:43

With some manipulation. Okay, we're like limiting her hours? Is that what you mean? Okay, yeah. Okay, okay.

SPEAKER_01 32:50

And the employer is okay with it.

SPEAKER_03 32:53

Okay, yeah, and that's fine. And so is so is the government, because when she when she filed for Social Security, they asked her moving forward, once you start your your Social Security benefits, so if that began in March, they say they gave her a list of months saying, Will you be below 2040? So if she said yes, I'll be below. There should be no problem whatsoever. No consequence to her social security check. So are you are you all experiencing something differently than what Josh and I just shared with you?

SPEAKER_01 33:19

Yeah, I think we're we're getting a little more detailed than we need to here, but let me try to try to go back and explain this a little bit. Okay, so we understand that she's on this limit of 2040 per month for the rest of the year.

SPEAKER_04 33:34

Yes.

SPEAKER_01 33:34

Let's just agree to that, okay? So okay, so for uh March, uh kept it under that hour. You know, kept it under 2,000 actually, and she got her checked this month. Okay, all good, no problem. Now we're currently in April, and we're running to the left of tomorrow list, and kept it under 2000, and now here's what the problem is what I'm really asking. The employer uh a bonus of $315 and let's put it for and now they put her over the card. Okay. What they came from, like, is working over. Okay. And the letter, here's the same grace, I guess, is the letter that came with her textbook only report that the state of Michigan has approved increase in wages for direct care workers through this my choice waivers program. And anyways, it says right on here that uh this payment is for the months of October, November, December, and January. The payments are received are on this paycheck for this weekend in 422 under special category. And when you look at that, it's $314. Okay, so now that puts her over that 2040 limit. And I don't know how this gets reported to Social Security or when, but they're gonna look at that and say, look, for that month you were over.

unknown 35:26

Okay.

SPEAKER_01 35:27

We want to penalize you. Okay. So how do we get this information for them to actually were back in 24 and 25?

SPEAKER_03 35:36

Okay, I I would not do that. I would see uh how how they're going to view that if it were me. I I don't think you're gonna call somebody nothing. Let's see if they if they draw attention to it, and then you would submit that paperwork that you just told us about. You had submitted to them, and they'd very clearly see that that only one month of that uh was was uh even in this year, and she was still working. So again, she would she could have made $24,800 in in uh January and February. And so, and you're st telling us she didn't, even with this extra $315. So I would not do a thing, Dan. Don't do a thing. Don't worry about it. Let's see if they follow up, because I don't think they're going to, but if even if so, then you could prove that $315 was not money that was earned uh during the month of March or April. It was money that was uh most of it was earned in 2025. So I would I would I would not worry about it if it were me. Okay, you're not being dishonest. There's nothing there's no one to there's no one to to reach out to and say, hey, here's this document. Don't do that. If if they draw attention to it, then you can respond and you have a wonderful uh you know way to to make sure they understand this does not apply to the earnings test at all.

unknown 36:45

Yeah.

SPEAKER_03 36:46

Okay? So you are fine, sir. Okay, anything else that we can help you with today.

SPEAKER_01 36:57

How does that uh those wages get reported to uh to Social Security? Is it from the employer or from you?

SPEAKER_03 37:04

No, no, it's from the employer. They're required to do that. Yeah. In fact Go ahead, I'm sorry. Oh, no, go ahead. Your question.

SPEAKER_01 37:14

And do you know if that's um uh it's probably reported monthly or quarterly? I'm not sure when will Social Security audit that?

SPEAKER_04 37:25

When will they audit that? When will they when will they see that the $300?

SPEAKER_03 37:31

Yeah, okay, okay. Here's the thing. I can't tell you exactly when they're gonna audit that because I don't know that. But what I what I do know is this, I'm sorry. Yeah, well they they they used they used to report quarterly. That's how they came up with the whole quarter system. Okay, they don't do that anymore. I think it's either monthly, annual, or whatever, but I know they got away from from the from the quarterly uh reporting. So but that employer is required to do it. I'm sure in the day of uh you know that tech today, they probably get those numbers uh pretty regularly. Yeah, exactly right. So uh you don't have to do a thing, I promise you. Uh but you know they're withholding taxes, it's all part of the the FICA system. So as they withhold those taxes, uh the employer is actually paying that money into the government. So that's that's how it's reported. Okay, not on you whatsoever.

SPEAKER_01 38:17

Okay. Okay, the same way, basically. Sounds right. As long as they have this letter, I mean there's nothing.

SPEAKER_03 38:24

Yeah, exactly. You keep that letter. If you get audited, you have you have a a great defense here. You will be fine, sir. Yeah, they're not gonna they're they will not fight you on that for a second. In fact, I don't think you'll ever hear from them about it. Okay. But if you do, then you'll better explain it easily. Hey, this is this is 2025 income. And uh, you know, January, and she was still working. So we're we we fall underneath the earnings test because they'll look at the annual amount.

unknown 38:51

Okay.

SPEAKER_03 38:51

Okay. Thanks, Dan. Hey Dan, good to good to talk to you, sir. Thanks very much.

SPEAKER_01 38:57

Thank you. Uh I appreciate you guys both. Take care.

SPEAKER_04 39:00

I mean, obviously $300 is uh you know, not a not a huge amount. What if somebody did, like let's say they had a a bonus that was deferred or you know, a bunch of PTO that was paid out um you know, a couple months later or something. Let's say it's ten, fifteen, twenty thousand dollars that would obviously put them over the earnings test. How like what happens in that scenario if you know?

SPEAKER_03 39:24

Yeah, oh I do know. So if that that did happen for every two dollars, uh they're above that limit. But when does it get caught? You know what I mean?

SPEAKER_04 39:32

Yeah. Like is that in next year's taxes and then it's withheld in the future?

SPEAKER_03 39:37

Here's my understanding. I I I think they have their uh they report uh annually. So I'm saying that that's gonna be picked up, but it's not it probably would not be immediate. Yeah. Yeah. That's why some people uh that um uh uh will tell the government they're gonna be below the earnings test, and that changes, sure. It does eventually uh catch up with them. But it it could it could be a year.

SPEAKER_04 39:59

And so uh so let's say that happened. How what would be the most likely resolution of that? Do they just skip a few Social Security checks?

SPEAKER_03 40:06

Exactly right. They they would say, here you you owe us $1,000. Uh so then they would just withhold that from your Social Security check.

SPEAKER_04 40:12

And do they do that per rato or are they just like, hey, you're not getting this check, this check, and this check?

SPEAKER_03 40:16

It's normally they're gonna withhold the colour. Exactly right.

SPEAKER_04 40:19

They will. The full check. Okay.

SPEAKER_03 40:20

Yeah. And I'm not saying they wouldn't send an invoice along with that if it was a small amount of money. If my social security check is $2,500 and I owe $400, uh, they're not gonna withhold the full check. Uh so either they're gonna they're gonna pull it out of that or send you a paycheck.

SPEAKER_04 40:32

Maybe just reduce that initial check. Okay. That's interesting. $300 is you know not a big deal, but I can see people getting larger amounts. Right. Um for various very various reasons. If you if you had an experience like this, you're listening to the show, call in. 800-824-2004. We'd love to hear your experience so we can get smarter and help um help explain and help our other listeners uh know what's going on out there in the crazy land of Social Security. Guys, join us on Monday. Uh we're gonna be back together. We're gonna be talking about this kind of crazy new idea that's been floating. We've been hearing both sides of this uh kind of echoing through the halls of CMS and things that if government officials are reporting on auto-enrolling people into a plan when you're eligible for Medicare, a certain type of plan. Um, just gonna talk through that latest on that sort of uh on that topic because it is a little scary. Uh it's a little concerning to think about, oh, all of a sudden I'm automatically enrolled into a plan that I don't even know or understand or even say a one, and then I have to opt out. Um so we're gonna talk about that on Monday. So join us. If you guys need help with your Medicare situation, call our office 800-782-6676-800-782-6676. We would love the chance to get to help you. If you want to be on the show, uh, ask a question, share an experience, 800-824-2004. The phone number is down there at the bottom of the screen. We love doing the show with you guys. We love talking to you, connecting to you. So call in. Uh, love to meet you. Uh, we'll see you Monday. All right.