A couple in their seventies who rely on Social Security benefits are expressing concern about the sufficiency of their income in light of rising healthcare costs. They reported receiving a 2.8% cost-of-living adjustment (COLA) for 2026, which they hoped would help them cope with inflation. However, the increase in their Medicare premiums, including the Income-Related Monthly Adjustment Amount (IRMAA), has left them with a mere $20 monthly increase for the wife and $80 for the husband. This situation has prompted questions about whether the COLA effectively addresses the rising cost of living and health care expenses.
Experts clarify that while Medicare costs have not surged as rapidly as those of private insurance, the premiums can still rise steeply enough to negate any benefits from the COLA. The IRMAA surcharge applies to couples whose modified adjusted gross income exceeds $218,000, and it is based on their tax returns from two years prior. This means that the financial burden from higher premiums can often feel more acute for seniors, even with what appears to be a nominal increase in Social Security payments.
In a separate inquiry, a reader commended a recent response regarding the misconceptions surrounding the closing of credit accounts. The reader recounted personal experiences with credit cards, emphasizing that the closure of accounts, whether by the individual or the issuer, has had a minimal impact on their credit score over the years. The prevalent misinformation can confuse those new to credit management, prompting a need for clear understanding.
Financial experts outline that current credit scoring systems do not penalize individuals for accounts closed by the issuer. The impact of closing an account largely depends on the individual’s overall credit history. For people managing multiple accounts responsibly, closing a credit card seldom results in significant or enduring damage to their scores. However, the closing of high-limit cards can potentially affect scores more than closing those with lower limits.
As seniors continue to navigate financial realities amidst rising costs and as individuals manage their credit health, the importance of access to accurate information and timely adjustments in benefits remains paramount.
