As Georgia residents near retirement age, it's important to start thinking ahead about Medicare. Making the appropriate changes a few years in advance can maximize one's Medicare benefit when the time comes. One way to engage in active Medicare planning is to consider the role that a qualified charitable contribution could play in future finances.
If an individual exceeds the government-set income standards, he or she will eventually pay a surcharge on Medicare premiums. The amount of that surcharge depends on the individual's tax return information from the two years prior to applying for coverage. That's why it is important to begin planning by the age of 63, at the very latest. An earlier start is even better.
Making a qualified charitable contribution can help by reducing one's income for a given tax year. That keeps the amount of the contribution out of the formula designed to calculate the Medicare surcharge. It's imperative to follow the rules when it comes to these deductions, however, which is why it's wise to work with an attorney with expertise in Medicare planning.
When it comes to retirement, it's never too soon to begin planning. Medicare planning is part of that equation, and is something to take a proactive stance toward. By considering qualified charitable contributions and other tools, Georgia residents can help maximize their wealth during these important years. Advance planning is a great way to ensure the ability to actually relax and enjoy retirement, rather than living under a heavy burden of financial stress.
Source: Chicago Tribune, "Retirement: Planning ahead to avoid higher Medicare premiums", Rachel L. Sheedy, April 11, 2018