The Social Security cost of living adjustment (COLA) increased 2% for 2018. However, some recepients will be surprised to find that this COLA was actually offset by higher Medicare Part B premiums, which are deducted directly from benefit payments. Higher income retirees can see their Part B premiums increase due to a surcharge known as Income Related Monthly Adjustment Amount. Depending on one's income, the Medicare B surcharge may exceed the COLA.
We review our clients tax returns and potential tax changes each year for these type of traps and to help you keep more of your money.