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Most Medicare Costs Are Increasing in 2024

January 8, 2024
Medicare

Premiums, deductibles, and coinsurance amounts for Original Medicare generally change every year. Here’s a look at some of the costs that will apply in 2024.

Medicare Part A (Hospital Insurance) costs for 2024

Premium for those who need to buy coverage: As much as $505 per month (down from $506 in 2023); however, most people don’t pay a premium for Medicare Part A
Deductible for inpatient hospitalization: $1,632 per benefit period (up from $1,600 in 2023)
Inpatient hospital coinsurance: $408 per day for days 61 through 90, and $816 per “lifetime reserve day” after day 90, up to a 60-day lifetime maximum (up from $400 and $800 in 2023)
Skilled nursing facility coinsurance: $204 per day for days 21 through 100 for each benefit period (up from $200 in 2023)

Medicare Part B (Medical Insurance) costs for 2024

Monthly standard premium: Most people with Medicare who receive Social Security benefits will pay the standard monthly Part B premium of $174.70 in 2024, $9.80 higher than in 2023. This premium increase is mainly due to higher projected health-care spending.¹

Premium for those with higher incomes: If your modified adjusted gross income (MAGI) as reported on your federal income tax return from two years ago (2022) is above a certain amount, you’ll pay the standard premium amount and an Income-Related Monthly Adjustment Amount (IRMAA), which is an extra charge added to your premium, as shown in the following chart.

*This premium applies to a benefit that extends coverage for immunosuppressive drugs for people whose full Medicare coverage ended 36 months after a kidney transplant and who do not have certain other types of health insurance.

People with higher incomes may also pay a higher premium for a Medicare Part D prescription drug plan, because an IRMAA will be added to the Part D basic premium based on the same income limits in the table above. Part D premiums vary, but the average basic monthly premium for 2024 is projected to be $34.50 (up from $32.09 in 2023). The average total premium for plans with enhanced coverage is projected to be $55.50 in 2024, down from $56.49 in 2023.

Annual deductible: People with Medicare Part B must also satisfy an annual deductible before Original Medicare starts to pay. For 2024, this deductible is $240 (up from $226 in 2023).

1) The Centers for Medicare & Medicaid Services, 2023

You can get more information on Medicare benefits in the Medicare & You 2024 Handbook at medicare.gov.

What about Medicare Part C premiums?

Medicare Part C (Medicare Advantage) costs vary by plan and some are premium-free, but the projected average premium for 2024 plans is $18.50 (up from $17.86 in 2023). If you have a Medicare Advantage plan, you will also have to pay the Medicare Part B premium.

To learn more about how we help at CapSouth, please visit our website at https://capsouthwm.com/what-we-do/

Prepared by Broadridge Advisor Solutions. © 2023 Broadridge Financial Services, Inc. CapSouth Partners, Inc, dba CapSouth Wealth Management, is an independent registered Investment Advisory firm. This material is from an unaffiliated, third-party and is used by permission. Any opinions expressed in the material are those of the author and/or contributors to the material; they are not necessarily the opinions of CapSouth. Information provided by sources deemed to be reliable. CapSouth does not guarantee the accuracy or completeness of the information. CapSouth does not offer tax, accounting or legal advice. Consult your tax or legal advisors for all issues that may have tax or legal consequences. This information has been prepared solely for informational purposes, is general in nature and is not intended as specific advice. Any performance data quoted represents past performance; past performance is no guarantee of future results.

Year-End Charitable Giving

December 21, 2023
Charitable Giving

With the holiday season upon us and the end of the year approaching, we pause to give thanks for our blessings and the people in our lives. It is also a time when charitable giving often comes to mind. The tax benefits associated with charitable giving could potentially enhance your ability to give and should be considered as part of your year-end tax planning.

Tax deduction for charitable gifts

If you itemize deductions on your federal income tax return, you can generally deduct your gifts to qualified charities. This may also help increase your gift.

Assume you want to make a charitable gift of $1,000. One way to potentially enhance the gift is to increase it by the amount of any income taxes you save with the charitable deduction for the gift. At a 24% tax rate, you might be able to give $1,316 to charity [$1,000 ÷ (1 – 24%) = $1,316; $1,316 x 24% = $316 taxes saved]. On the other hand, at a 32% tax rate, you might be able to give $1,471 to charity [$1,000 ÷ (1 – 32%) = $1,471; $1,471 x 32% = $471 taxes saved].

However, keep in mind that the amount of your deduction may be limited to certain percentages of your adjusted gross income (AGI). Your deduction for gifts to charity is limited to 50% (currently increased to 60% for cash contributions to public charities), 30%, or 20% of your AGI, depending on the type of property you give and the type of organization to which you contribute. Charitable deductions that exceed the AGI limits may generally be carried over and deducted over the next five years, subject to the income percentage limits in those years.

Make sure to retain proper substantiation of your charitable contributions. In order to claim a charitable deduction for any contribution of cash, a check, or other monetary gift, you must maintain a record of such contributions through a bank record (such as a cancelled check, a bank or credit union statement, or a credit-card statement) or a written communication (such as a receipt or letter) from the charity showing the name of the charity, the date of the contribution, and the amount of the contribution. If you claim a charitable deduction for any contribution of $250 or more, you must substantiate the contribution with a contemporaneous written acknowledgment of the contribution from the charity. If you make any noncash contributions, there are additional requirements.

Year-end tax planning

When making charitable gifts at the end of the year, you should consider them as part of your year-end tax planning. Typically, you have a certain amount of control over the timing of income and expenses. You generally want to time your recognition of income so that it will be taxed at the lowest rate possible, and time your deductible expenses so they can be claimed in years when you are in a higher tax bracket.

For example, if you expect to be in a higher tax bracket next year, it may make sense to wait and make the charitable contribution in January so that you can take the deduction next year when the deduction results in a greater tax benefit. Or you might shift the charitable contribution, along with other deductions, into a year when your itemized deductions would be greater than the standard deduction amount. And if the income percentage limits above are a concern in one year, you might consider ways to shift income into that year or shift deductions out of that year, so that a larger charitable deduction is available for that year. A tax professional can help you evaluate your individual tax situation.

A word of caution

When making charitable contributions, be sure to deal with recognized charities and be wary of charities with names that sound similar to reputable charitable organizations. It is common for scam artists to impersonate reputable charities using bogus websites as well as misleading email, phone, social media, and in-person solicitations. Check out the charity on the IRS website, irs.gov, using the Tax Exempt Organization Search tool. And remember, don’t send cash; contribute by check or credit card.

GivingTuesday, a day for charitable giving, is held annually on the Tuesday after Thanksgiving. In 2023, GivingTuesday is November 28.

To learn more about CapSouth and how we help please visit https://capsouthwm.com/what-we-do/

CapSouth Partners, Inc, dba CapSouth Wealth Management, is an independent registered Investment Advisory firm. This material is from an unaffiliated, third-party and is used by permission. Any opinions expressed in the material are those of the author and/or contributors to the material; they are not necessarily the opinions of CapSouth. Information provided by sources deemed to be reliable. CapSouth does not guarantee the accuracy or completeness of the information. CapSouth does not offer tax, accounting or legal advice. Consult your tax or legal advisors for all issues that may have tax or legal consequences. This information has been prepared solely for informational purposes, is general in nature and is not intended as specific advice. Any performance data quoted represents past performance; past performance is no guarantee of future results.

The Twelve Days of Financial Wisdom: A Holiday Guide

December 13, 2023
Finances, Financial Lessons, Financial Planning, Guidance

The holiday season is in full swing. Throughout the years our family has grown to include new family members from different cultures and traditions. As we navigate a growing family and offer flexibility around busy holiday schedules, we want to embrace the joy and wonder this time of year without succumbing to the humbug feeling that can easily overtake us if we cling too tightly to old rhythms in this new life-phase. This year I find myself smack dab in the middle of a home remodel with no kitchen and zero furniture downstairs. In fact, I even found myself cooking dinner in our Master Bathroom the other night! It would be easy to focus on the inconveniences of a remodel, so we’ve chosen to stay positive and be thankful for all that we have been blessed with. Like the Grinch, I’m having my heart melt by connecting with people this season. An extra smile at the grocery store, a friendly wave and a thank you to the hard-working delivery people. I can see joy and wonder surrounding me this time of year if I just look around. I recognize this season isn’t the easiest or merry for many. It can be full of tough memories and lost loved ones. There is conflict all over the world reminding us that not everyone is safe and happy this year. Elvis knew what he was talking about when he sang about a blue Christmas. There especially seems to be a healthy tension this year for holding space for both hurt and hope. If you find yourself in a season where jolly and laughter elude you, then it is my sincere hope that my feeble attempt at some holiday humor brings a smile and a laugh. There’s a reason that I’m a Wealth Advisor and I’m not a stand-up comic, so let’s just keep that in mind too! Without further I do, I give you, “The Twelve Days of Financial Wisdom.” (P.S. If you can’t help but think of me singing this, let’s just pretend that I’ve got the voice of Mariah Carey belting out these great lines!)

Day 1: Diversify Your Assets Wisely

🎵 “On the first day of Christmas, my Wealth Advisor said to me: Diversify your assets wisely!” 🎵

Just like a well-balanced fruitcake, a diversified investment portfolio is a key ingredient for financial success. While fruitcakes might not be everyone’s favorite, diversification is almost universally adored by savvy investors. Spread your investments across various asset classes – stocks, bonds, real estate – with a goal of reducing risk and increasing potential returns.

Remember, just as a fruitcake brings together different flavors for a delicious outcome, diversification brings together different assets for a well-rounded and resilient investment strategy.

Day 2: Compound Interest, Oh What a Joy!

🎵 “On the second day of Christmas, my Wealth Advisor said to me: Compound interest, oh what a joy!” 🎵

Imagine compound interest as the holiday gift that keeps on giving. Much like a snowball rolling down a hill, your savings can accumulate and grow over time with the magic of compounding. The earlier you start, the larger the snowball – uh, I mean, your savings – becomes.

So, this holiday season, give yourself the gift of an early start on savings and watch your financial snowball grow into a winter wonderland of wealth.

Day 3: Budgeting Bells Are Ringing

🎵 “On the third day of Christmas, my Wealth Advisor said to me: Budgeting bells are ringing!” 🎵

While the holiday bells may be jingling, it’s essential to keep your budget from jangling out of tune. Create a realistic budget that includes your holiday spending, but don’t let it snowball into a financial avalanche. By tracking your expenses, you’ll avoid the post-holiday blues when the credit card bills start singing a less festive tune.

This season, let your budget be your guiding star, ensuring a harmonious and stress-free celebration.

Day 4: Hark! The Herald of Emergency Fund Angels

🎵 “On the fourth day of Christmas, my Wealth Advisor said to me: Hark! The herald of emergency fund angels!” 🎵

Life is full of surprises, and having a robust emergency fund is like having a team of financial angels ready to help when unexpected expenses arrive. Whether it’s a car repair or a sudden medical bill, your emergency fund can be a guardian angel, ensuring your financial stability in times of need.

This holiday season, let your emergency fund be your silent protector, allowing you to enjoy the festivities without worrying about unforeseen financial hiccups.

Day 5: Five Golden Retirement Rings

🎵 “On the fifth day of Christmas, my Wealth Advisor said to me: Five golden retirement rings!” 🎵

Retirement may seem like a distant future, but like the five golden rings in the classic song, it’s a valuable gift that requires careful planning. Help your retirement plans shine brightly by regularly contributing to your retirement accounts. The magic of compounding (Day 2, remember?) can work wonders over the long term, making your golden years truly golden.

This holiday season, make a resolution to invest in your retirement future and enjoy the sparkle of those golden rings in the years to come.

Day 6: Let Tax-Efficient Reindeer Lead the Sleigh

🎵 “On the sixth day of Christmas, my Wealth Advisor said to me: Let tax-efficient reindeer lead the sleigh!” 🎵

Just as Santa relies on his trusty reindeer to navigate the skies, you can rely on tax-efficient strategies to guide your financial sleigh. Take advantage of tax-deferred accounts, tax-free investments, and strategic tax planning to reduce your tax burden. It’s like leaving milk and cookies for the IRS – they get less, and you keep more.

This holiday season, let your financial sleigh be led by tax-efficient reindeer, ensuring a smooth ride toward your financial goals.

Day 7: The Magic of Giving – Charitable Contributions

🎵 “On the seventh day of Christmas, my Wealth Advisor said to me: The magic of giving – charitable contributions!” 🎵

This holiday season, let the spirit of giving extend beyond wrapped presents. Consider incorporating charitable contributions into your financial plan. Just as the warmth of a cozy fire spreads throughout the room, your generosity can create a positive ripple effect in your community and beyond.

Whether it’s supporting a local charity, contributing to a cause close to your heart, or volunteering your time, the act of giving not only makes a difference in the lives of others but also adds a meaningful dimension to your financial journey.

This holiday season, let the magic of giving be a guiding light, illuminating the path to a more compassionate and fulfilling financial future.

Day 8: Making a List, Checking It Twice – Financial Goals, That Is!

🎵 “On the eighth day of Christmas, my Wealth Advisor said to me: Making a list, checking it twice – financial goals, that is!” 🎵

Santa isn’t the only one who needs a list. Outline your financial goals clearly and revisit them regularly. Whether it’s saving for a dream vacation, a home, or your children’s education, having a well-defined list keeps you on track. Checking it twice? That’s reviewing and adjusting your goals as life evolves.

This holiday season, take a cue from Santa and keep your financial list in order – it’s a key to turning your dreams into reality.

Day 9: Wise Men (and Women) Seek Professional Advice

🎵 “On the ninth day of Christmas, my Wealth Advisor said to me: Wise men (and women) seek professional advice!” 🎵

Even the three wise men sought guidance when following the star. Similarly, seeking advice from financial professionals can provide you with the direction needed for a successful financial journey. Whether it’s investment strategies, tax planning, or retirement advice, a wealth advisor can be your guiding star.

This holiday season, be wise and seek the expertise of financial professionals to navigate the complex constellations of the financial world.

Day 10: The Gift of Education Keeps on Giving

🎵 “On the tenth day of Christmas, my Wealth Advisor said to me: The gift of education keeps on giving!” 🎵

Investing in education is a gift that lasts a lifetime. Whether for yourself, your children, or future generations, education is a powerful tool for personal and financial growth. Like the knowledge passed down through generations, the gift of education can open doors and create lasting legacies.

This holiday season, consider the gift of education as an investment in a brighter and more informed future.

Day 11: A Partridge in a Pear Tree – Invest in Your Home Nest

🎵 “On the eleventh day of Christmas, my Wealth Advisor said to me: A partridge in a pear tree – invest in your home nest!” 🎵

Just as the partridge nests in a pear tree for security, your home is your nest egg. Invest in your property wisely, keeping it well-maintained and considering home improvements that can enhance its value. Your home is not only a place of comfort but also a significant part of your financial portfolio.

This holiday season, let your home be a cozy and well-nurtured nest, providing both emotional and financial security.

Day 12: Drumroll, Please – The Beat of Financial Independence!

🎵 “On the twelfth day of Christmas, my Wealth Advisor said to me: Drumroll, please – the beat of financial independence!” 🎵

As we wrap up our Twelve Days of Financial Wisdom, let’s revel in the grand finale – financial independence. Just as the drumroll builds anticipation, the path to financial independence requires steady and disciplined beats. By saving diligently, making thoughtful investments, and planning for the future, you orchestrate the melody of financial success. Picture the day when you can confidently march to the rhythm of financial freedom, knowing your efforts have created a harmonious and secure future.

There you have it – “The Twelve Days of Financial Wisdom!” May the holiday season bring not only cheer and laughter, but also a renewed focus on your financial well-being.

As we close the chapter on this financial carol and wave goodbye to the year that’s making its exit, let’s hold on tight to the everlasting beat of relationship wisdom in our lives. Think of it like the cozy soundtrack of laughter we share with our favorite people, the easy flow of understanding that feels like a familiar tune, and the big, exciting moments we hit together – they’re all part of the warm symphony of our collective journey. Just like a family dinner where everyone’s got a seat at the table (that you hopefully didn’t prepare in your Master Bathroom), our connections make the kind of music that gives life its colorful rhythm. So, here’s to the echoes of good times, the easy chats, and the solid support that keep our shared story sounding just right.

Wishing you and your loved ones a wonderful holiday season filled with warmth, joy, and a financially sound future. Cheers to a prosperous New Year ahead!

To learn more about CapSouth Wealth Management, visit https://capsouthwm.com/what-we-do/

Article by: Jennifer Fensley, CFP®️,CRPS®️

CapSouth Partners, Inc, dba CapSouth Wealth Management, is an independent registered Investment Advisory firm. CapSouth does not offer tax, accounting or legal advice. Consult your tax or legal advisors for all issues that may have tax or legal consequences. This information has been prepared solely for informational purposes, is general in nature, and is not intended as specific advice. This article was produced with the assistance of ChatGPT (Version 3.5) in December 2023; Chat GPT is an artificial intelligence model owned by OpenAI. CapSouth is not affiliated with OpenAI.