Over the course of your retirement years, you will notice that your budget won’t stay exactly the same as it did when you first retired. Hopefully, those changes will be gradual, and nothing shocking will happen. But we do still need to plan for them.
One such change is the periodic adjustments of Original Medicare premiums. For 2019, Part B premiums, along with deductibles for Parts A and B, will change:
- Part B standard premiums rose from $134 to $135.50
- The Part B annual deductible increased from $183 to $185
- The Part A inpatient hospital deductible was adjusted, from $1,340 to $1,364 per benefit period
These amounts apply to standard Parts A and B only. Remember, most of us don’t pay a premium for Part A benefits, because we paid into the system through Medicare taxes during our working years. Part C, or Medicare Advantage, premiums might change according to the insurance companies that manage each plan.
Standard Part B premiums are calculated according to income. The amounts listed above will apply to individual taxpayers with incomes of less than $85,000 annually, or married taxpayers with incomes of less than $170,000. If your income falls above those thresholds, your premiums range from $189.60 to $450.60.
Yes, the increases described above are quite small, and won’t make a dramatic impact on most retiree budgets. However, the greater point is to remember that these adjustments do happen regularly, and over 20 years or so can make a noticeable difference to your budget.
This issue illustrates the concept of planning for a retirement budget and withdrawal schedule that can change over time. Perhaps considering other avenues of retirement income, which adjust according to inflation, might benefit you as well. Let’s discuss these issues at your next appointment, so that we can help you plan for a retirement income that changes to meet your needs over the years.