The new year will establish minor, but crucial changes for customer Social Security, Medicare and retirement savings accounts. According to U.S. News, retirees not old enough to qualify for Medicare will be given the chance to purchase private insurance with their state's health insurance marketplace for the first time ever in the U.S.
Here are some the changes that may impact retirement plan services retirees in 2014:
Early retirees can get Obamacare
Workers who retire prior to turning 65 will have the opportunity to purchase a health plan through their state's health insurance marketplace. People with household incomes less than $45,960 ($62,040 for couples) in 2014 can qualify for a premium subsidy as well.
"People can no longer be charged more because of their health status or health history," said Senior Fellow Karen Pollitz at the Kaiser Family Foundation, according to U.S. News. "If you are offered the choice of retiree health benefits, you can compare that cost to what is offered on the exchange and pick the plan that is the better deal for you."
Small boost in Medicare Part D prescription drug coverage
Medicare Part D plans have a coverage difference that starts once a retiree spends $2,850 on prescriptions in 2014. Catastrophic coverage begins once $4,550 of medication costs is spent. The total retirees have to spend on their generic drugs in the coverage gap will drop from 79 percent of the prescription's cost in 2013 to 72 percent in 2014. The Affordable Healthcare Act is closing the coverage gap by moderately cutting down the beneficiary cost sharing, according to U.S. News. The cost sharing requirement for brand-name prescriptions in the coverage gap will continue to be 47.5 percent of the prescription's cost in 2014.
Social Security payments will be larger
According to The Associated Press, there will be a 1.5 percent increase on Social Security beneficiaries' checks in 2014. There is a cost-of-living adjustment on the average monthly Social Security benefit by $19 for individuals and $31 for couples. The calculation is on pace with inflation and the protection against inflation is in place to last through a retiree's lifetime.
IRA income limits are bigger
Additional tax deductions for an investor's. IRA contributions can be claimed for their 401(k) at work. While contribution limits for 401(k)s and individual retirement accounts will stay the same, income limits for people eligible to contribute to IRAs will rise. Having the right retirement plan services in order before the new year can help workers get the most out of their plan in the future as the rules and regulations continue to change.
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