Understanding Government Benefits and Healthcare Options

Government Benefits,[object Object],UnderstandingGovernmentBenefits and Health Care Options,[object Object],General concepts only,[object Object],Unique situations = unique results,[object Object],Financial Advisors and financial firms do not provide tax, accounting, or legal advice,[object Object],Seek specific tax and legal advice,[object Object],From a qualified tax professional,[object Object],From an attorney qualified in these matters,[object Object],This material is not intended to provide legal, accounting or other advice. This material seeks to make no representation or opinion regarding the subject matter contained herein. Consult you’re your tax advisor for tax advice and your legal counsel for legal advice. Financial Advisors do not provide legal or tax advice.,[object Object]

Government Benefits,[object Object],Overview of Government Benefits,[object Object],Brief history of Social Security,[object Object],Qualifications and benefits,[object Object],Medicare A–D,[object Object],Deficit Reduction Act of 2005,[object Object],Planning considerations,[object Object]

Government Benefits,[object Object],History of Social Security,[object Object],Signed into law August 14, 1935,[object Object],Began benefit accrual January 1, 1937,[object Object],Initially lump sum benefit,[object Object],Monthly payments began in 1942,[object Object],Automatic COLAs started in 1975,[object Object],Partial taxation of benefits effective 1984,[object Object],Source: Social Security Web site, 2008.,[object Object]

Government Benefits,[object Object],Social Security,[object Object],Collection of programs:,[object Object],Retirement,[object Object],Disability,[object Object],Survivor’s benefits,[object Object],Lump-sum death benefit,[object Object],Note: Social Security is more than a,[object Object],monthly government retirement check,[object Object]

Government Benefits,[object Object],Social Security Benefits,[object Object],Source: Social Security Web site, 2008.,[object Object]

Government Benefits,[object Object],Social Security,[object Object],Combination of an insurance and a retirement plan,[object Object],Benefits cannot be garnished or assigned,[object Object]

Government Benefits,[object Object],Worker Eligibility for Retirement,[object Object],Workers must earn 40 credits of coverage ,[object Object],Credit of work is equivalent to $1,120 of earned income,[object Object],Only 4 credits may be accumulated annually,[object Object],This typically works out to 10 years of qualified,[object Object], work history to qualify for Social Security benefits,[object Object]

Government Benefits,[object Object],Social SecuritySurvivor Eligibility,[object Object],Credits needed vary by age of worker at death,[object Object],No more than 40 credits of coverage necessary,[object Object],Typically equates to 10 years of work,[object Object],Survivor benefits are available to the dependents of a deceased worker who has worked1½ years of the prior 3 years,[object Object]

Government Benefits,[object Object],Social SecurityNonworker Eligibility,[object Object],Spouse of insured, disabled, or deceased workers,[object Object],Age 62 for retirement benefits,[object Object],Age 60 for survivor’s benefits ,[object Object],Disabled,[object Object],Widowed and not remarried,[object Object],Caring for minor or disabled children of worker,[object Object]

Government Benefits,[object Object],Disabled Worker Eligibility,[object Object],Earned 6 credits for disability or death benefits,[object Object],In 2010, 1 credit for each $1,120 on earnings,[object Object],Disability benefit eligibility is independent of age ,[object Object]

Government Benefits,[object Object],Social Security PIA,[object Object],Primary insurance amount (PIA),[object Object],Calculated on average monthly earnings,[object Object],35 highest earning years,[object Object],Employer and employee each contribute 6.2%,[object Object],Maximum benefit base,[object Object],Determines benefits paid ,[object Object],Reductions and increases,[object Object],Determined by age when benefits start,[object Object]

Government Benefits,[object Object],Social Security Retirement Benefits,[object Object],Reduced benefit at age 62,[object Object],Full retirement age (FRA) dependent on year of birth,[object Object],2010 FRA is 66 years if born between 1943 and 1954 ,[object Object],Maximum benefit at age 70,[object Object],COLA ,[object Object]

Government Benefits,[object Object],Early Retirement,[object Object],Earliest retirement at age 62,[object Object],Earnings history,[object Object],Social Security provides larger percentage of lower-wage-earners income,[object Object],Reduction of benefit,[object Object],Approximately 25%,[object Object],Family history and marital status,[object Object]

Government Benefits,[object Object],Full Retirement Age (FRA),[object Object],FRA in 2010 is 66 years if born between 1943 and 1954,[object Object],COLA,[object Object],No marriage penalty,[object Object],Increase benefit over early retirement,[object Object],100% of PIA,[object Object]

Government Benefits,[object Object],Delayed Retirement,[object Object],Retirement at age 70,[object Object],Maximum benefits,[object Object],Increased benefit over age 66,[object Object],Up to approximately 35%,[object Object]

Government Benefits,[object Object],Combined Income,[object Object],What constitutes total income?,[object Object],Adjusted gross income (AGI), plus,[object Object],Tax-exempt interest income, plus,[object Object],Half of Social Security benefits,[object Object]

Government Benefits,[object Object],Benefit Taxation—Individual,[object Object],Combined income between $25,000 and $34,000,[object Object],Income tax on 50% of your benefits,[object Object],Combined income more than $34,000,[object Object],Up to 85% of your benefits may be taxable,[object Object]

Government Benefits,[object Object],Benefit Taxation—Joint,[object Object],Combined income between $32,000 and $44,000,[object Object],Income tax on 50% of your benefits,[object Object],Combined income more than $44,000,[object Object],Up to 85% of your benefits may be taxable,[object Object],Source: www.SocialSecurity.gov, 2008.,[object Object]

Government Benefits,[object Object],Benefit Reduction,[object Object],Continue working prior to attaining normal retirement age,[object Object],Under FRA in 2010 for the entire year,[object Object],Deduct $1 from your benefit payments for every $2 you earnabove the annual limit,[object Object],For 2010 that limit is $14,160,[object Object],FRA in 2010,[object Object],Deduct $1 in benefits for every $3 you earn above $37,680 ,[object Object],Only earnings before the month you reach your FRA,[object Object],Beginning in the month you reach your FRA,[object Object],There is no limit on earnings,[object Object]

Retirement Planning,[object Object],Government Benefits,[object Object]

Government Benefits,[object Object],Retirement Planning,[object Object],Source: Social Security Administration, 2009.,[object Object]

Government Benefits,[object Object],When Should You Begin Benefits?,[object Object],Personal decision based on your needs and probable life expectancies,[object Object],Healthy individual may choose to delay,[object Object],Less healthy individual may begin at age 62,[object Object],You may delay to increase future benefits to a younger or healthier spouse,[object Object]

Government Benefits,[object Object],Break-even Ages,[object Object],Source: www.SocialSecurity.gov, 2008.,[object Object]

Government Benefits,[object Object],Medicare,[object Object],Available to the elderly (age 65+), the disabled, and those with permanent kidney failure requiring dialysis or a kidney transplant,[object Object],Eligibility for SS or railroad retirement benefits may affect whether or not the benefit is provided with no additional cost,[object Object],Part A—no cost,[object Object]

Government Benefits,[object Object],Part A:Hospital Insurance,[object Object],Inpatient care in a hospital ,[object Object],Skilled nursing facility after a hospital stay,[object Object],Home healthcare,[object Object],Hospice care,[object Object]

Government Benefits,[object Object],Part A:Hospital Insurance,[object Object],Eligible for full Social Security,[object Object],Eligible for railroad retirement benefits,[object Object],Medicare-qualified government employment,[object Object],Dependent parent of someone who worked a government job where Medicare taxes were paid,[object Object],Pay monthly premium,[object Object]

Government Benefits,[object Object],Part B:Medical Insurance,[object Object],Doctors’ services, other medical services, and supplies not covered by Part A,[object Object],Anyone who is eligible for free Part A can elect Part B for a monthly premium,[object Object],Or, without Part A and age 65+,[object Object],U.S. citizen,[object Object],Lawfully admitted non-citizen in U.S. for five years,[object Object]

Government Benefits,[object Object],Part C:Medicare Advantage Plans,[object Object],Formerly Medicare + Choice,[object Object],Option to receive all healthcare services through a provider organization,[object Object],Medicare-managed care plans,[object Object],Medicare preferred provider organizations (PPO) plans,[object Object],Medicare private fee-for-service plans,[object Object],Medicare specialty plans,[object Object]

Government Benefits,[object Object],Part D:Prescription Drug Plans,[object Object],Helps pay for prescribed medications,[object Object],Voluntary program,[object Object],Pay additional monthly premium for the coverage,[object Object],May delay enrollment if you have another prescription drug coverage,[object Object],Delay may result in penalty if prescription drugcoverage deemed inadequate,[object Object]

Government Benefits,[object Object],Medicare Enrollment,[object Object],Sign up three months before age 65,[object Object],www.SocialSecurity.gov,[object Object],Publication No. CMS-10050,Medicare & You,[object Object],Describes Medicare benefits and plan choices,[object Object]

Government Benefits,[object Object],Deficit Reduction Act of 2005,[object Object],Signed by President Bush on 2/8/06,[object Object],Changed the rules on qualifying for Medicaid,[object Object],Begins at date of application—not date of gift,[object Object]

Government Benefits,[object Object],Medicaid,[object Object],What is Medicaid?,[object Object],A federal/state entitlement program under Title XIX of the Social Security Act,[object Object],State administrated program,[object Object],Each state sets own guidelines regarding eligibility and services,[object Object]

Government Benefits,[object Object],Medicaid/Medicare Relationship,[object Object],Medicare beneficiaries with low income and limited resources may qualify for Medicaid,[object Object],If eligible, service may include:,[object Object],Nursing facility care beyond the 100-day limit under Medicare ― eyeglasses ― hearing aids,[object Object],Approximately 6.5 million Medicare beneficiaries will receive some level of supplemental support from Medicaid ,[object Object]

Government Benefits,[object Object],LTC and the Partnership Program,[object Object],Deficit Reduction Act of 2005 expanded the Partnership for Long-Term Care program,[object Object],Dependent on state status,[object Object],Non-partnership,[object Object],Partnership,[object Object]

Government Benefits,[object Object],LTC and the Partnership Program,[object Object],Special eligibility rules for Medicaid,[object Object],Standardized format,[object Object],“Dollar-for-dollar” protection formula,[object Object],NAIC Insurance Model Act and Regulation,[object Object],Agent education requirement,[object Object],2010—annuities and long-term care,[object Object]

Government Benefits,[object Object],Gifting Example,[object Object],How is the penalty period determined?,[object Object],Assume gifts of $500,000 have been made,[object Object],Assume monthly costs are $5,000,[object Object],$500,000/$5,000 = 100 months of ineligibility,[object Object],What happens now?,[object Object]

Government Benefits,[object Object],Income First,[object Object],Income of institutionalized spouse will be added to spouse’s income to determine minimum monthly maintenance needs allowance (MMMNA),[object Object],This reduces the amount of assets that maybe maintained to meet income needs of non-institutionalized spouse,[object Object],Source: www.SocialSecurity.gov, 2008.,[object Object]

Government Benefits,[object Object],Annuities and Long-Term Care,[object Object],Considered disposal of an asset for less than fair market value unless state is:,[object Object],Primary beneficiary,[object Object],Secondary beneficiary after spouse or dependent child,[object Object],State has the ability to recoup from assets any payments made for care of the individual,[object Object]

Government Benefits,[object Object],“Valid Annuities”,[object Object],Irrevocable and non-assignable,[object Object],Variable payments not allowed ,[object Object],Actuarially sound—federal guidelines,[object Object],Payments in equal installments,[object Object],No deferral or balloon payments ,[object Object],Retirement plan exception,[object Object]

Government Benefits,[object Object],Balloon Annuities,[object Object],Provides low payout for specified period,[object Object],Usually a short period ,[object Object],Distributes remaining balance at death of owner,[object Object],Not allowed,[object Object]

Government Benefits,[object Object],Exemptions,[object Object],Qualified plans or IRAs paid as an annuity will not need to name the state as the primary beneficiary.,[object Object]

Government Benefits,[object Object],Do You have Equity in your Home?,[object Object],Cannot exceed $500,000 or state can optionally increase to no more than $750,000,[object Object],Can apply for reverse mortgage or home equity line,[object Object],These assets must now be spent down before qualifying for Medicaid,[object Object]

Government Benefits,[object Object],Home Equity,[object Object],Not applicable if spouse or dependent child lives in the home,[object Object],State can apply lien to home while institutionalized person is alive,[object Object],If house is sold, Medicaid payments will stop until assets depleted,[object Object]

Government Benefits,[object Object],Reverse Mortgages,[object Object],Home Equity Conversion Mortgage (HECM) Reverse Mortgage,[object Object],Insured by Housing and Urban Development (HUD) ,[object Object],Method of accessing home equity ,[object Object],All homeowners must be age 62 or older ,[object Object],Commercial Reverse Mortgages ,[object Object],Less restrictive—Not insured by HUD ,[object Object],Note: It is strongly recommended that you consult with your family, a tax advisor and attorney before entering into any reverse mortgage ,[object Object]

Government Benefits,[object Object],Pros and Cons of Reverse Mortgages,[object Object]

Government Benefits,[object Object],Web Sites,[object Object],www.SocialSecurity.gov,[object Object],www.naela.com (National Academy of Elder Law Attorneys) ,[object Object],www.medicare.gov,[object Object],www.cms.hhs.gov/home/Medicaid.asp,[object Object]

Government Benefits,[object Object],Suggested Reading,[object Object],The New Retire-mentality ,[object Object],Planning Your Life and Living Your Dreams . . .at Any Age You Want,[object Object],by Mitch Anthony,[object Object]

Government Benefits,[object Object],In Summary,[object Object],Social Security is unlikely to meet the needs of most individuals; build your own savings,[object Object],Medical costs will continue to rise,[object Object],Long-term care (LTC) costs will not default to the state as easily as in the past,[object Object],Gifting has become more problematic,[object Object],Individuals should research and consider purchasing LTC insurance,[object Object],Individuals should seek counsel of an elder law attorney,[object Object]

Government Benefits,[object Object],This material is not intended to be used, nor can it be used by any taxpayer, for the purpose of avoiding U.S. federal, state, or local tax penalties. This material is written to inform, educate and support matter(s) addressed by this material.,[object Object],Financial Advisors do not provide tax, accounting, or legal advice. Any taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor. Legal matters to do with these matters need to be addressed with a qualified attorney.,[object Object]

Government Benefits,[object Object],You should carefully read a prospectus or company literature before investing in anything. Read them carefully before investing and consider an investment’s risks, charges, limitations, and expenses. This and other information about mutual funds, variable annuities or fixed annuities are provided in the applicable product material and underlying fund prospectuses. Prospectuses are available from your registered representative. Fixed annuities do not provide prospectuses but provide product guidelines and disclosures. ,[object Object],It’s always best to seek the opinion of a Series 65 licensed financial professional before investing.,[object Object]

1/10,[object Object],Thank You,[object Object],Variable annuities are long-term investments designed for retirement. The value of the variable investment options will fluctuate and, when redeemed, may be worth more or less than the original cost. Withdrawals and other distributions of taxable amounts, including death benefit payouts, will be subject to ordinary income tax. If withdrawals and other distributions are taken prior to age 59½, a 10% federal tax penalty may apply. A withdrawal charge also may apply. Withdrawals will reduce the value of the death benefit and any optional benefits. ,[object Object],Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Insurance products are issued by Pacific Life Insurance Company in all states except New York and in New York by Pacific Life & Annuity Company. Product availability and features may vary by state. Each company is solely responsible for the financial obligations accruing under the products it issues. Product and rider guarantees are backed by the financial strength and claims-paying ability of the issuing company and do not protect the value of the variable investment options.,[object Object],Variable annuities are distributed by Pacific Select Distributors, Inc. (member FINRA & SIPC), a subsidiary of Pacific Life Insurance Company, and are available through licensed third-party broker/dealers.,[object Object],Mailing addresses:,[object Object],Pacific Life Insurance Company,[object Object],P.O. Box 2378, Omaha, NE 68103-2378,[object Object],(800) 722-2333  www.PacificLife.com,[object Object],In New York, Pacific Life & Annuity Company,[object Object],P.O. Box 2829, Omaha, NE 68103-2829,[object Object],(800) 748-6907  www.PacificLifeandAnnuity.com,[object Object]

Understanding Government Benefits and Healthcare Options

Understanding Government Benefits and Healthcare Options

Recommandé

Contenu connexe

Tendances

Tendances(18)

En vedette

En vedette(10)

Similaire à Understanding Government Benefits and Healthcare Options

Similaire à Understanding Government Benefits and Healthcare Options(20)

Dernier

Dernier(20)

Understanding Government Benefits and Healthcare Options

Notes de l'éditeur