What to Know for Monday, August 17th, 2026: |
1: 2027 Social Security COLA revised down to 3.6% from 3.8% — average spousal benefit crosses $1,000 milestone for first time |
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Senior Citizens League revises 2027 COLA down 0.2 points to 3.6% after inflation cooled in August — still above average and higher than 2.8% increase in 2026: If 3.6% holds, average retirement benefit climbs $75 from $2,086 to $2,161 monthly; average spousal benefit rises $36 from $987 to $1,023 — spousal benefit crossing four-figure mark represents first time in program history average approaches $1,000 monthly — official announcement scheduled October 14 after SSA receives final Q3 inflation data. Actual individual COLA impact depends on current benefit amounts — some already exceed $1,000 spousal benefit while others will remain below after increase: Medicare Part B premiums likely to increase 2027, potentially offsetting some COLA gains since premiums deducted directly from Social Security checks — government sending personalized COLA notices December 2026 detailing exact benefit amounts starting January — don't contact SSA until reviewing official notice to avoid confusion. Spousal benefit generally represents maximum 50% of higher earner's full retirement age benefit — trend toward higher averages reflects new beneficiaries claiming with higher lifetime earnings: Spousal benefits grew slowly over years as new claimants with better earnings histories entered system — COLA compounds benefit growth annually — milestone reflects decades of wages above 1960s-1970s levels when Social Security initially indexed benefits.
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➜ Read the full article from Yahoo Finance here. |
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2: Only 8 states still tax Social Security benefits; most offer income thresholds exempting middle/lower-income retirees |
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Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont tax Social Security but most exclude low-to-moderate income retirees: Only Colorado (65+), Montana (65+) take benefits without exemptions; Connecticut won't tax benefits under $75K-$100K AGI thresholds; New Mexico exempts singles earning up to $100K and joint filers under $150K; most generous exemptions prevent state taxes for majority of retirees — flat tax rates ranging 4.4-5.65% apply only to federally taxable portion for those exceeding thresholds. Recent trend shows states phasing out Social Security taxes entirely: West Virginia, Kansas, Nebraska, Missouri recently eliminated taxes on Social Security benefits — only 8 states remaining vs. 13 in recent years — demonstrates nationwide movement away from taxing retirement income — 42 states now provide full exemption on Social Security regardless of income level. Retirees should calculate AGI including non-Social Security income to determine tax liability: AGI thresholds determine taxability; Vermont joint filers at $80K AGI avoid taxes entirely; married filing separately filers often get lower thresholds than joint filers — income from pensions, 401(k) withdrawals, investment income counts toward AGI limits — knowing state's specific exemption thresholds critical for retirement tax planning.➜ Read the full article from Kiplinger here.
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3: Medicare Advantage trial right offers 12-month escape hatch to Original Medicare — but 63-day guaranteed-issue deadline easy to miss |
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Medicare beneficiaries enrolling in Medicare Advantage at age 65 get one-time 12-month trial period to test plan then return to Original Medicare without penalties: Trial window allows switching back to Original Medicare and buying Medigap supplemental insurance without medical underwriting — critical protection for beneficiaries discovering network limitations, denied claims, or coverage gaps after enrollment — only applies to first Medicare Advantage enrollment at 65; cannot be used again if beneficiary rejoins Advantage later. Guaranteed-issue Medigap window closes 63 days after leaving Medicare Advantage — missing deadline exposes beneficiaries to unlimited healthcare costs: Original Medicare has no annual out-of-pocket cap; beneficiaries owe 20% coinsurance for outpatient services with no ceiling — conditions like diabetes with complications, recent cancer treatment, heart failure may result in higher premiums or denial of Medigap coverage after medical underwriting — four states (Connecticut, New York, Massachusetts, Maine) provide additional guaranteed-issue protections but most have limited annual windows. Real-world example: 66-year-old discovers orthopedist dropped network, MRI prior authorizations denied twice at 14 months — too late for guaranteed-issue protection: Many beneficiaries wait past trial period before realizing plan doesn't work, then forced into Original Medicare without supplemental coverage option — should act immediately if discovering network issues, claim denials, or provider changes during first year.
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➜ Read the full article from AOL here. |
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Here’s What You Missed on YouTube: |
Check out our new YouTube videos for Monday, August 17th. |
Your Medicare Drug Plan Jumps in 2027 — Do This Now |
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Your Medicare Drug Plan Jumps in 2027 — Do This Now |
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This newsletter is for information only. Always confirm your options directly with Social Security, Medicare, Medicaid, or a qualified advisor before making big decisions about your benefits. |
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