Social Security and Medicare: Strategic Planning for the Upcoming Year

December 1, 2023

Every October, the Social Security Administration announces potential changes in Social Security benefits for the upcoming January, influenced by the rate of inflation. For 2024, the increase in Social Security benefits is projected to be smaller than in 2023. This raises questions about the implications for Medicare costs. The blog addresses these concerns and offers advice on managing Medicare expenses effectively.

The cost-of-living adjustment (COLA) for 2024 is set at 3.2%, increasing the average monthly retirement benefit by approximately $59, reaching $1,906. Recipients of Social Security benefits should expect notification of this increase through their online accounts by December’s end, with the new rates effective from January. Although this increase is less than the 8.7% rise seen in 2023, it remains above the 20-year average of 2.6%.

A critical question is whether this COLA will be sufficient to balance rising Medicare costs. Medicare Parts B and D, which cover medical services and prescription drugs, respectively, often experience annual cost fluctuations. Social Security typically offsets Medicare Part B premiums against its benefits, which could diminish the impact of any increase in Social Security benefits. For 2024, the standard premium for Part B is expected to rise by $9.80 to $174.70.

Moreover, increased Social Security benefits could inadvertently hike your Medicare costs if your income crosses certain thresholds, affecting premiums for both Part B and D. The determination of these premiums considers your income from two years prior.

To keep Medicare costs in check, it’s advisable to consult financial professionals for strategic tax planning, including considerations for income-related monthly adjustment amounts (IRMAA). Regular reviews of your Part D plan are recommended to ensure it aligns with your needs. Recent legislative changes, such as those introduced by the Inflation Reduction Act of 2022, are set to reduce healthcare costs for Medicare beneficiaries. These include capping Medicare Part D costs and limiting insulin-related expenses.

Considering these factors, consulting a financial advisor becomes crucial. They can offer tailored strategies to balance your Social Security benefits and Medicare costs effectively. If you’re not currently working with a financial advisor, the team at Omni360 is ready to assist. We encourage you to reach out for a comprehensive discussion of your financial situation and explore optimal strategies for your needs.

For more detailed information, please refer to the original article at Buckingham Strategic Partners.


Practice Areas:



Schedule your free Exploratory phone call

Click here to see how we
can be of assistance.

Careers/Open Positions

Explore all available job
listings and become a part of an amazing team.

Payment Portal
for Tax and Accounting invoice

This link offers a secure, quick way to complete your payment with Omni360 Advisors LLC.

Our Social Media

Connect with us on Social Media using the following buttons:

Visit our Podcasts

Listen in, Join the Conversation!

Recent Posts

Smart Tax Planning Strategies for a Wealthier Retirement and Legacy

As families transition into retirement or navigate life post-business sale, the tax implications of their decisions become more complex—and more consequential. Smart tax planning is not about loopholes or short-term tricks; it’s about crafting a lifetime strategy to ...

<p>The post Smart Tax Planning Strategies for a Wealthier Retirement and Legacy first appeared on Integrated Tax Planning, Legal Planning & Financial Planning.</p>

New Estate Tax Bill Spurs Important Review—But No Need to Panic

A proposed bill to permanently raise the estate‑tax exemption offers planning clarity—but it’s not law yet. Here’s why any major tax change should prompt a ...

<p>The post New Estate Tax Bill Spurs Important Review—But No Need to Panic first appeared on Integrated Tax Planning, Legal Planning & Financial Planning.</p>

How Strategic Financial Guidance Turns Market Volatility into Opportunity

Navigate market uncertainty with confidence. Learn how strategic financial advice can transform volatility into long-term growth opportunities. Market fluctuations often stir anxiety, even among experienced investors. For business owners, multigenerational families, and individuals navigating post-liquidity ...

<p>The post How Strategic Financial Guidance Turns Market Volatility into Opportunity first appeared on Integrated Tax Planning, Legal Planning & Financial Planning.</p>