The Foreward to the New Edition
Robert Powell, CFP
Retirement Daily, thestreet.com
Plenty of experts know the A, B, C and Ds of Medicare.
But not everyone can help you understand the interaction between Medicare and
your retirement plan.
And that’s what’s different about Jae Oh.
In a world where health care expenses for older American represent on average 15%
of their expenses, Jae understands that Medicare is the “single most valuable
component of retirement planning in the
U.S.” And he knows that understanding Medicare’s rules is the difference between
reaping and optimizing all the benefits Medicare has to offer or getting stuck with
worse benefits and higher costs.
That’s one reason why I started recording video interviews with Jae for TheStreet’s
Retirement Daily a few years ago. In my role as a personal finance journalist focused
on retirement, I talk to hundreds of financial experts. And I’m in a constant state of
searching for subject matter experts who I can quote in my articles. I can’t remember
the exact date, but I recall searching one day for Medicare experts and chancing upon
Jae’s book, Maximize Your Medicare. I reached out to Jae and asked him to
comment on an article.
Now, sometimes, when I ask experts questions – quite frankly – all I get back is
pablum. I get worthless or oversimplified ideas that do nothing to help me inform
and educate my readers. I get nothing that I didn’t already know and certainly
nothing worth quoting.
But that wasn’t the case with Jae.
Jae was the real deal. Yes, he knew how Medicare works, how/when/why to enroll,
what options are available, and how to choose the best Medicare configuration for
you and your family. But, as a CERTIFIED FINANCIAL PLANNER™
professional, Jae also understood – in ways that most Medicare experts don’t – the
connection between your financial/retirement plan and Medicare.
Consider: In one video, we discussed how Roth IRA conversions could adversely affect Medicare Part B
and Part D premiums. And that’s not something every Medicare expert might know.
What is the relationship between Medicare Part B and Part D premiums and Roth IRA conversions? Well, as
you’ll learn in Jae’s book, the standard Part B premium amount was $148.50 in 2021 and was projected to
be $158.50 in 2022 as of this writing. And most people (about 95% of Medicare beneficiaries) pay that
But if your modified adjusted gross income (MAGI) as reported on your IRS tax return from two years ago
is above certain threshold amounts, you’ll pay the standard premium amount for your Part B and Part D
premiums plus something called an Income Related Monthly Adjustment Amount or IRMAA.
And as Jae explained in our video, taxpayers who convert their traditional IRA into a Roth IRA may create
additional income that pushes their MAGI above certain threshold amounts which results in higher-thanstandard
Part B and Part D premiums – at least for one year. And that premium isn’t insignificant. For the
highest income earners Medicare Part B premiums could rise to $504.90 per month (in 2021) because of the
taxable income created by Roth IRA conversions.
Now, in some cases, a Roth IRA account owner might be aware of the
consequences a Roth IRA conversion has on their Medicare Part B and Part D
premiums. But imagine how surprised and perhaps unprepared a Roth IRA
account owner might be if they weren’t forewarned about potentially higher
Medicare Part B and Part D premiums. That’s the kind of knowledge and wisdom
that Jae has to offer. Not just the fact that IRMAA exists. But how one action could
result in budget-busting consequences.
Or consider how we discussed in another video the potentially adverse effect Roth
IRA conversions could have on someone’s advanced premium tax credit or APTC.
When you apply for coverage in the Health Insurance Marketplace, you estimate
your expected income for the year. And if you qualify for a premium tax credit
based on your estimate, you can use any amount of the credit in advance to lower
your premium. Then, at the end of the year, if you’ve taken more premium tax
credit in advance than you’re due based on your final income, you’ll have to pay
back the excess when you file your federal tax return. And that’s what might
happen if you do a Roth IRA conversion without understanding its impact on your
APTC. The Roth IRA conversion could create higher income than what you
estimated whey applying for an APTC.
That’s the knowledge and wisdom Jae has to offer in this book, and equally
important – given the constant barrage of changes — on the
MaximizeYourMedicare.com website, the Maximize Your Medicare Facebook
page, the Maximize Your Medicare podcast, the Maximize Your Medicare YouTube
channel, and Maximize Your Medicare Newsletter.
And make no mistake: Those changes are many and the need for you to stay
informed is critical. In our videos, for instance, Jae and I have discussed many
other topics (most of which are covered in this book), including Medicare’s Annual
Notice of Change (ANOC), Medicare’s Annual Election Period which runs from Oct.
15 to Dec. 7 each year, Medicare’s Plan Finder, what beneficiaries can expect with
respect to Medigap premiums, the interplay between HSAs and Medicare, how to
pick a Medicare Advantage plan, how to switch from a Medicare Advantage plan
to original Medicare with a Medigap plan and vice versa, proposed changes to
Medicare such as adding coverage for hearing, dental and vision, and actual
changes to health insurance laws because of the American Rescue Plan Act or
Yes, in this book, you’ll learn about why it’s so important to become a student of
the subject, especially with respect to topics not covered in the government’s
Medicare & You handbook. For instance, Jae writes about working beyond 65,
retiree benefit plans, special group coverage for veterans, and long-term care
And last, it’s worth noting that Jae’s approach to Medicare is a bit different from
other so-called Medicare experts. Jae, who holds and MBA from the University of
Chicago, also provides an addendum that will satisfy those who want to take a
deeper dive into the world of probabilities (the Black-Scholes formula) and health
insurance. Once again, it’s a chance for Jae to put on display not just his
knowledge of Medicare but his knowledge of the connection between finance and
your retirement plan.
I hope you enjoy this book as much as I do and as much as I enjoy doing video
interviews with Jae.