Podcast Episode - 10 Changes That Are New in 2022


401k, Health Insurance, Retirement, Roth, Roth IRA, Saving, Social Security, Stock Market


January 30, 2022

Listen to Podcast Episode:

Suze starts this episode with another recap of what happened in the stock market this week. Then, she gives us a deep dive on the new “No Surprises Act” and details 2022 changes to estate tax, Social Security increases, new amounts you can contribute to your retirement accounts and more.


Podcast Transcript:

January 30, 2022. Well, another week has passed in this crazy stock market that we have and so I just want to do a little recap, not spend a lot of time on it because really there's not a lot at this point in time that I can say that I haven't already said to you in the past few podcasts, but let me start here. So as you know, we went back this week to Florida and as we arrived in customs, we were going through with the customs agent and she said to me, she goes Suze, oh you'll be so proud of me, I sold everything in my retirement account and I went to cash. And I'm just looking at her like, oh no please because she was relatively young. She was probably in her late 30s, maybe early 40s. So, she had a lot of time on her side. So anyway, and I'm just looking at her and I said, when did you do that? She said I did it today when the markets went down finally, I woke up and they were down 1000 points. I did it. And now I feel so much better that same day, the market that was down 1000 points ended up being like 100 points plus it recovered all of that loss. Okay, so I'm looking at her and I say by any chance, do you listen to the women and money podcast that I have and she says, no, I didn't even know you had a podcast, which reminds me everybody, you should tell everybody you know about this podcast because they should all be listening to it. But okay, that's beside the point. And I go, oh, she says I'll try to listen in the future. And I'm thinking to myself, you should have been listening already but okay. And she was so proud of what she did. And now KT is standing next to me and she's kicking me because you know there's this counter, she can't see me like Suze Orman don't say anything. And she was right because there was nothing I could say at that point in time because it was already done. So, when things like that happen, when people start telling me that they sold, they couldn't stand it anymore. That's a sign that I take as we are closer to the bottom than we were. It's usually one. Everybody just can't stand it anymore. That really in the long run. That is a great sign. So, I am not saying that the markets are going to go straight up from here by any means, I think we absolutely could retest our bottoms. That would be really healthy. But in the long run we're doing pretty well now. Remember when I said to you maybe two years ago or so that the economy is not the stock market and the stock market is not the economy during the height of the pandemic. The economy was doing horrific. Nobody was buying anything. Everything was shut down yet. The stock market was doing great now the economy believe it or not is doing better than it's done in a long time. Don't ask me how that's possible. But it is the numbers have come in and it shows that the economy is really strong. But now the stock market is not so great. So, don't confuse those two. Okay, they're very different entities. But because the economy is doing so strong at the same time that the stock market has come down, we're just going to have to see what the Federal Reserve Committee does with the future of interest rates. This last meeting that they had, which was last Wednesday. They decided not to raise rates, but maybe they'll raise them next, you know, month or what in the next few months or whenever. Who knows? So, we'll just see what happens there because of that. You're not going to see this huge fluctuation in your bond portfolios, especially if they are bonds or ETFs, but still I will stick by what I believe, which is you shouldn't be in long term bond funds period. Enough said also because we don't know what's going to happen with inflation. I think it's really important that you don't lock your money up for a long period of time. Like I really think you're far better off just sticking in money market accounts or savings accounts or whatever it is and earning like at Alliant Credit Union .55% right now. Then going for an extra 0.5% or so and locking your money up for 1,2,3, or 4 years depending on the interest rate that you're locking in. Because you know, I do remember back all the way to 1980 when interest rates were so high. It wasn't even funny, and inflation was going up and up and up. And I remember drawing this little map for my clients back then saying you know inflation and interest rates are like railroad tracks, they go up and down together. So, it's possible that if inflation continues up and nobody out there can tell you if it is or it isn't going to continue to go up. They said it wasn't going to stay this high, wasn't going to go this high. I like to see what happens. I don't like to double guess people; I like to know what is actually happening. Its true inflation could continue up. Who knows? And if inflation does continue up, interest rates are going to have to go up if inflation goes down which hopefully that will happen then eventually interest rates will come down again as well. But we just have to wait and see. So, give yourself some flexibility there except when it comes to series I bonds again. I like series I bonds better than tips and that's where I would be going if I were you, okay there's that. Now with that said there are other things that are happening out there that you need to know about your life isn't all about the stock market. Although when the markets fluctuate like this, you feel like it's the only thing that matters. The only thing that matters and other things matter as well. Like you have other things going on. Like you have to know about medical bills, you have to know increase in Social Security limits. You need to know all of these things. So that's what we're going to really talk about today. Not one of the great things in my opinion that happened starting January 1st, 2022 is something called the No Surprises Act or the NSA and this is a new bell and act that was passed where there are new federal protections for all of you that will protect you against what's called surprise bills that you get from some medical services that sometimes you happen to need. Now let's start at the beginning. So, you understand what this really means. Now obviously a lot of you have private health insurance you're covered by insurance and obviously some of your health insurance policies require that you have to use an in network hospital or doctor for that policy to cover the service that you are getting. But sometimes you don't have a choice as to what doctor or hospital you're going to go to, especially if it's in an emergency situation because sometimes you end up in an accident, maybe you're walking down the street and you slip and you hit your head, anything can happen. You're somewhere you have a heart attack; okay things can happen everybody and now you are taken to a hospital. You can't talk, you can't show them your health insurance. They just simply take you to a hospital and possibly in an emergency situation like that. You are taken to a hospital that is out of your network. The doctors that are working on you are out of your network and here maybe they've cured you. You're fine. You come home you think that you're covered. And all of a sudden you get what they label a surprise medical bill saying you owe this much money because you had services that were out of network. Well guess what not Anymore. And by the way about 10 million people a year were getting those kinds of bills just so you know. But now because of the NSA the No Surprise Act, they cannot do that anymore. So now the good news is that the NSA now makes it so your private health insurance company listen closely to me, everybody has to cover these out of network claims, and they have to apply in network cost sharing to your bills. So that is a big deal. Now a few other things that I just want to say about this is that sometimes you go to uh in network hospital and let's say that's true and for whatever reason somebody on the team is an out of network doctor. Like sometimes an anesthesiologist for instance you don't get to choose your anesthesiologist. So you're doing everything like you think you're supposed to do and then all of a sudden you get a bill saying you owe this much more money because your anesthesiologist was out of network again, that is changing. They cannot do that to you anymore, especially in an emergency situation. So, what does this NSA really cover? So that you're not going to get surprise bills. So just again let's be clear about this. It's going to cover you for services in a hospital or a freestanding emergency room. Got that everybody it will cover you if you go to an urgent care center that also is licensed to provide emergency care, it will provide for you air ambulance transportation believe it or not, even if it's a non-emergency. What it does not cover however is it doesn't cover ground ambulances. So those are just a few of the things that you need to know also let's just say you end up in an out of network hospital and you're there and you go into an emergency room or something and now they admit you into the hospital and then there comes a time where really you're healthy enough to be transferred okay if you're healthy enough to be transferred then they will transfer you to an in network hospital at that time. But they have got to cover your expenses with cost sharing with your insurance company up until that point. So, these are things that you really really need to know. All right now let's say something happens and all these things went like this and yet you still get a bill and you know because you've listened to this podcast. The chances are you don't owe that much money. The very first thing you do is you call your insurance agency and you complain you file a complaint saying I do not. owe this because the sad part about most of these things and this is also why I don't like Medicare advantage by the way is that a lot of your claims are denied And you just say okay and you pay the bill if you can or you don't pay the bill and then you get into financial trouble a lot of time. So, you are to not pay it if you think you don't owe it and you are to file a claim against that. You are to call them. Now if their arguing with you and you really believe that you are protected under the NSA then you can call for it. Remember the NSA is the No Surprises Act you can then call the no surprises helpline which is 1-800-985-3059. And they will help you. So, there's so much more really that I could tell you about it. But those are the highlights because especially now with illness and all these kinds of things going on and a lot of us getting older things can happen where an emergency really occurs. And that is when this new NSA act will absolutely protect you especially if you go to an out of network hospital or use an out of network Doctor because it's an emergency next. It's really important that you know that starting in 2022 a lot of the annual contribution limits to retirement accounts to HSA on the amount of Social Security. The increase on it. The increase on your Medicare B premiums are going up. So, some things are going up. Some things are going down, but you need to know about all of them. So, this is a quick rundown on the ones that I think most likely will pertain to you Now starting in 2022. So here we are already. I hope this this applies to all of you. Maybe. Yes, probably no but you should know about it anyway. Is that the estate tax limit per person? How much you can leave to somebody estate tax free or to a lot of people has increased from $11,700,000 to $12,060,000. Now, a lot of you right me and you say Suze, I'm afraid that my family is going to owe estate tax. What can I do to get around it? A lot of people are saying I need to do this, I need to do that. No. If you're estate is under right now, $12,060,000 per person. You don't have to do anything. You just need to know that. And I hope you're in that situation. And if not, maybe one day you will be, you never know however many of you to reduce your estate tax or just because you want to, you give annual gifts every year, to individuals in your family or individuals that you know, they don't have to be related to you. In 2022, the annual gift amount has increased from $15,000 per person to $16,000 per person. So, you can give to as many people as you want $16,000 a year. Obviously, they don't have to pay income tax on it. You don't get to write it off, but that's how much you are allowed to legally give. If you give more than $16,000 to a person, let's say you give somebody $56,000 in one lump sum this year, which is $40,000 above the $16,000 that you can give to people, no matter what. That $40,000 then comes off your annual gift lifetime credit which is the exact same amount as your estate tax limit, which is $12 million and $60,000. So, you would only be able to leave somebody in this case $12,020,000 estate tax free. So, I know ridiculous numbers, but you should just understand how that works. But now you can give people $16,000 a year. Okay next what you also need to know is that your Social Security is going to increase and it's going to increase by 5.9%. So, for those of us who gets Social Security we will see an increase of 5.9%. And probably you've already noticed it in your social security check by the ways in so many of you write and ask the maximum social security check this year can only be and I say only with a smile $3,345 per month. And that's up really from $3,143 a month a year ago. So that's good. But what's bad is that your Medicare premiums part B are also going up now. Here's what's interesting your increase on your Medicare premiums part B depends on what your 2020 tax returns happen to be. Don't ask me why they do it that way. They take it on your income of two years before right now. But in 2020 many of you may be because of COVID you weren't working. Maybe you made less money that year. So, we'll see if your premiums are really going to go up or not. But possibly they are. So let's talk a little bit more about social security for those of you out there who are thinking about collecting social security before your full retirement age, which for most of you will probably be 66 or 67 If you want to collect, let's say at 62 now they have increased the amount of money that you can make while still collecting Social Security before your full retirement age to $19,560 a year. Once you make more than that, they will deduct $1 for every $2 that you make above that amount for those of you who are going to reach full retirement age, let's say you're going to reach full retirement age this year, but in December You can still work and make up to $51,960 before they're going to deduct $1 for every $3 you make above that. So, you just need to know that. But you also need to know once you reach full retirement age you do start to get that money back. So not that big of a deal. All of you should also know now if you're working that they have increased the maximum income that you can make before they stop subtracting Social Security to $147,000. So, we're gonna now for those of you making up to 147,000 verses by the way it was 142,800 last year you're going to have to continue to pay into Social Security for others via taxes. Okay so those are things that you need to know when it comes to Social Security and things like that. But here's other things now in regard to your retirement accounts that you need to know in 2022 which is the year that we're in. You now can contribute more if you want to a 401K, a 403B, a TSP an employer sponsored plan you now can contribute up to $20,500. That's up $1,000 from last year and you can do so if you want If you're under 50 once you are 50 or older you now can contribute up to $27,000 per year versus $26,000 last year. So, there's more money now if you want to save more money you can contribute into your retirement accounts with your employers also. What's interesting. Oh, by the way I just want to say if you want to take advantage of that make sure you go in and see your HR person and adjust your contribution levels. So, some good news is for those of you for individual Roth IRAs now all of you know that I love Roth IRAs whether it's a 401K, 403B, TSP more than any kind of retirement account regardless of your tax bracket. So, a lot of you also have individual Roth IRAs now to qualify for a Roth IRA you can only have a specific amount of modified adjusted gross income and this year that income limit has increased. So if you are single, you file single Then you can make $129,000 a year or less obviously of modified adjusted gross income to qualify for a full contribution to your Roth IRA that would be $6,000 if you are under $57,000 if you are 50 or older. Now as you make over $129,000 modified adjusted gross income. The amount of money you can put into a Roth IRA decreases and it goes down to zero where you're no longer eligible for a Roth IRA, once you make over $144,000 a year, a modified adjusted gross income, if you are married. Finally, jointly, those amounts have increased to $204,000. A modified adjusted gross income for a full contribution to your Roth and it goes away totally when you make over $214,000 a year, a modified adjusted gross income. So that's good because a lot of you now may really qualify for a Roth when you didn't before. Please remember if you are married filing separately, you're living together, you can't make over $10,000 a year and qualify for a Roth. So, think twice before you do that. One last thing that I want to update you on really is a health savings account because a lot of you have health savings accounts and if you don't know what they are. Again, I explained them in great detail in past podcasts, but your annual contribution levels are increasing for an HSA which means how much you can put into it. If, you are an individual and under 55 years of age you can put up to $3,650. If you are 55 or older you can put a max of $4,650. Remember you have that $1,000 catch up because you're older now if you have a family and you are under 55 you can put up to $7,300 a year into your HSA. However, if you are 55 or older you can put up to $8,300. So that's good because really all of you might want to look into HSA accounts. I don't have time to really explain them again right now because they really are if used correctly. One of the best tax savings vehicles out their bar none. So those are a few things that I wanted to tell you about today because these are things that you need to know. You need to know that you can save more money in a retirement account. You need to know estate tax limits. You need to know that you can gift $16,000 a year away to anybody that you want. You need to know about the no surprise act because so many of you do get medical bills and you don't know what to do with it. You need to know that you should be getting an increase in your social security and all those kinds of things. So, this may not have been the most exciting podcast, but it may be one of the most important because there are more things in your life than just the stock market. Yes, how your money is invested. But really again there's not much you can do about it, especially at this point in time and if you are invested properly, you're going to love that this had happened believe it or not, especially if you have cash to take advantage of some of these things or you are continuing to dollar cost average here. So, there's nothing you can do about that right now. But you need to make sure that other things are in place. You have to make sure that you have an emergency savings account, a will, a trust and advanced directive, a durable power of attorney for healthcare. You have to know that you have the right type of insurance in place. You have to not be making mistakes by having whole life universal or variable life insurance policies in most cases. So, there's more to life than the stock market and crypto currencies. Alright, everybody. So, until next Thursday when Miss Travis will join us, there's really only one thing that I want for all of you and that is for you to be safe, strong, and most importantly, secure. See you then. Bye bye.


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