Tax Planning and Medicare | Your FERS Federal Retirement | #shorts | Christy Capital Management

There are a couple of decisions that you have to make at retirement that go hand in hand. I’m talking about tax planning and what you're going to do about Medicare.

Both of these decisions come from our new book, and they can collide if you’re not careful. The way Medicare premiums work is that at age 65, let’s say you turn on Medicare. They look back at age 63 to see what your income was because your premiums are based on your income.

Let’s say you want to do some of the tax planning, and you’re doing Roth conversions each year, which is causing your income to go up. You’ll have a window of time from 59 1/2 when you can access your TSP up until age 62 that you can convert based on your tax bracket with no Medicare consequences.

Medicare premium increases may start at age 63 if your income is higher than the threshold limits. Now, are the benefits of tax planning worth the extra premiums? Possibly. This is an example where unintended consequences can backfire on you, so let’s work out the proper planning for your situation.

Reach out to us at christycapital.com and check out the new book to read more about all the decisions you have to make at retirement.

The information provided is not intended as tax or legal advice. Figures shown are for illustrative purposes only. Furthermore, the information or the illustrations provided may not be used to avoid any tax penalties. This content represents the general views of Christy Capital Management and should not be regarded as personalized investment advice. Nothing herein is intended to be a recommendation. The opinions expressed are subject to change without notice. Retirement Benefits Institute, Inc., and a portion of its contents merged with Christy Capital Management Inc. Brandon Christy, former President of Retirement Benefits Institute, is also the current President of Christy Capital Management, Inc., a registered investment adviser.

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