Ask Our Experts
By: Compiled by Carole Fleck; Source: AARP Bulletin Date Posted: 2007-02-08 12:53:00-05:00
The AARP Bulletin 's Ask Our Experts column provides answers to important questions affecting older Americans. Read below for this month's column, or review our archive of previously published questions and answers sorted by topic. (Note: Recent news or changes to regulations may affect the guidance offered in this previously published column.)
Submit your own question to the Ask Our Experts column via our easy-to-use online form.
Q. I retired and elected to enroll only in Medicare Part A because I am covered under my husband's employer plan. Will I be penalized when I enroll later in Medicare's prescription drug program? I don't need it right now.
A. You're OK as long as your husband's plan provides insurance that is comparable to Medicare Part D drug coverage. You need written notice from his employer or plan confirming this. You will not face a late penalty as long as you start receiving Part D coverage within 63 days of the end of the employer's coverage. (For a person without comparable coverage, the penalty starts three months after the month in which he or she becomes eligible for Medicare, typically at age 65.) For details on Part D, visit Medicareor call 1-800-633-4227, or go to AARP The Bulletin Online's Medicare channel. —Expertise provided by Keith Lind
Q. I plan to retire at 62. If I work part time, I understand that any earned income over $12,960 will result in my Social Security benefit being reduced $1 for every $2 earned. Are my Roth IRA distributions considered taxable income?
A. Social Security looks at earned income, not investments, so your IRA distributions won't reduce your benefits. Roth IRA distributions taken at age 59 ½or older are not considered taxable income if you've had the Roth IRA for at least five years. If you take the distribution before 59 ½, you'll have to pay a 10 percent tax, although certain exceptions apply. For more information on Social Securityand how earned income affects benefits, call 1-800-772-1213. —Expertise provided by John Turner
Q. I retired from my company with a "frozen" pension plan, but the amount in the plan differs from the amount the company said it had before the plan was frozen. The company has repeatedly ignored my requests for a copy of the frozen plan. Does any government agency have a copy?
A. Employers are required to file details of pension plans with the U.S. Department of Labor. Your employer also is legally obligated to give you that information, but since your requests have gone unheeded, contact the U.S. Department of Labor, EBSA, Public Disclosure Room N-1513, 200 Constitution Ave. N.W., Washington, DC 20210; include name, address and phone number. —Expertise provided by Sara Rix
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