Can you beat Eddie at this week's quiz?
October 17, 2026
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Show Notes
Eddie and Betty's Conversation
Welcome to The American Retirement Advisor. I'm here with Eddie, as always, and Eddie, I have to tell you, when I read this week's piece by Ian Schaeffer, I thought, okay, we have to do this one as a quiz. Because that's exactly what it is.
I appreciate the warm welcome. And yes, I've been looking forward to this one all week, which probably tells you everything you need to know about me.
It really does. So here's the setup: Ian Schaeffer wrote a true-or-false quiz, nine questions, covering everything that came out of the American Retirement Advisors content this week. Big week, apparently. Medicare enrollment opened, Social Security announced its raise for 2027.
A lot landed at once. And the format is great because true-or-false sounds easy until you're staring at the question and you realize you're not actually sure.
Which is the whole point. So we are going to go through the ones that genuinely surprised us, and Eddie is going to explain the mechanics. Ready?
Buzzer's warm.
Oh, speaking of buzzers, I love the detail in this article. The advisors face a lightning round live at their Fiscal Fridays show in Scottsdale, timed on a pocket watch from 1878, with a spray bottle for anyone who runs long.
That is a tremendous combination of antique and chaos.
I would watch that show. Okay, question one. If you itemize in 2026, is every dollar you give to charity deductible?
False, and this one caught me off guard when I first read it.
Wait, so I thought charitable deductions were charitable deductions. What changed?
Starting in 2026, the first half a percent of your adjusted gross income in charitable gifts is not deductible, even if you itemize. So the deduction doesn't start at dollar one anymore.
How much does that actually cost someone?
Ian gives a specific example. A couple with three hundred thousand dollars of income gives ten thousand to charity, itemizes, and they can only deduct eighty-five hundred. That first fifteen hundred still helps the charity. It just isn't deductible.
That's real money, when you think about it. I can do that math.
It's not devastating, but nobody told you the rules changed, so you're sitting there thinking you got the full deduction and you didn't.
And I assume most people don't know this.
That would be my guess, yes.
Okay, question two is the one that I think is the real showstopper for this episode. Can you send up to a hundred and eleven thousand dollars directly from an IRA to charity, and have it not count as income?
True. That's a qualified charitable distribution, and the 2026 limit is a hundred and eleven thousand per person.
So together they could move double that out of an IRA, straight to a charity, and neither of them pays income tax on any of it?
That's the math. And it also counts toward your required minimum distribution for the year, which is a second win inside the same move.
Okay, explain that to someone who doesn't breathe spreadsheets the way you do.
So once you hit a certain age, the IRS requires you to take money out of a traditional IRA every year whether you want to or not, and you owe income tax on whatever comes out. A QCD satisfies that requirement, but the money goes directly to the charity, it never touches your hands, so it's never counted as your income.
So you're checking the required box and giving to charity at the same time, without the tax hit.
Right. You're doing two things with one move.
Why doesn't everyone know about this?
That is a good question. There are some catches, though. The money has to leave the IRA by December 31, and there's one particular vehicle that cannot receive a QCD.
Which is?
Donor-advised funds. The article is specific about that. So if your charitable giving runs through a donor-advised fund, a QCD won't work for that.
That's a real trap if you don't know it going in.
And the exact age rules, the mechanics of getting your IRA custodian to send the check directly, those are the specifics I'd bring to one of our advisors at American Retirement Advisors rather than guess at it here.
Good call. Now, question three is the one that made me say a bad word out loud when I read it. Does a zero-dollar premium drug plan mean you pay nothing extra for drug coverage?
False, and this is a great one because zero feels like zero.
Zero is supposed to mean zero!
Not in Medicare. If your income from two years ago was above a hundred and nine thousand single, or two hundred and eighteen thousand joint, you pay an income-based surcharge on top of whatever the plan's premium is. Including zero.
So someone picks what looks like the $0 option and then gets a bill anyway.
And it comes out of their Social Security check, which is the other surprise. You don't get an invoice. It just shows up as a smaller deposit.
That's a terrible way to find out. And it's based on income from two years ago, which connects to something else in the quiz.
Question four. Will the Medicare surcharges you pay in 2028 be calculated from your 2026 tax return?
True?
True. The two-year lookback is the whole engine here. Whatever you report on your tax return this year follows you into Medicare two years from now.
So the decisions you make before December 31 of this year could change what you pay in 2028.
Ian lists the specific moves: a Roth conversion, a large withdrawal, a charitable gift from an IRA. Each of those changes your income number, and your income number determines your Medicare surcharge two years out.
It's like a slow ripple. You toss something in the water now and you don't feel the wave until 2028.
That's a better analogy than anything I had.
I have my moments. Okay, question five. Do Medigap policies pay for long-term care in a nursing home?
False, and Ian pulls this directly from Medicare's own website, which I thought was smart. It's not an opinion.
So what does Medigap cover?
It fills gaps in Medicare, copays, deductibles, that kind of thing. But what Betty just described -- that kind of extended custodial care -- that's simply not a Medicare benefit to begin with. Medigap fills gaps in Medicare, so if the benefit doesn't exist, there's no gap to fill.
What does it cover for skilled nursing then?
It covers short-term care after a qualifying hospital stay. And after day one hundred, you pay all costs yourself.
That's not very long if something serious happens.
It's not. And this is one of those things where people go into retirement assuming they're covered and they're not. The confusion between skilled nursing and long-term care is enormous.
Okay, question six made me laugh a little because of how the answer is phrased. If your doctor leaves your plan's network in 2027, does a new rule let you switch plans?
False, and the wording in Ian's article is wonderful. Medicare proposed that rule, but the final rule published April 6th of this year says it, quote, is not finalizing the proposal.
That is the most bureaucratic way to say no.
Truly. They proposed it, got everyone's hopes up, and then the final rule just quietly did not include it.
So the practical takeaway is what? You can't wait and see?
You check your doctors now, during Annual Enrollment, which is open right now. Because if your doctor drops out of network in February, you don't have a safety valve that lets you switch.
That's the kind of thing that would ruin someone's January.
Or their whole year, depending on the doctor.
Question seven. The out-of-pocket cap on Part D drug costs for 2027, is it twenty-four hundred dollars?
True. And I love how Ian laid out the history here. It started at two thousand in 2025, went a little higher in 2026, and it's sitting right at that cap for 2027.
Wait, it went up? People are capping out at more?
Yes. The cap itself is increasing each year, which is the opposite of what most folks assumed when they heard there was a new out-of-pocket cap.
They thought cap and thought protection.
Which it is, compared to what used to exist. But the number isn't fixed, it moves. And your monthly premium is not part of that cap, so what you pay in premiums is separate.
So someone budgeting for drug costs in 2027 needs to think about both of those as two different buckets.
That's exactly it, yes.
Okay, the big one. Question eight. Social Security announced its 2027 cost-of-living raise this week. Is it 3.6%?
True. About seventy-five dollars a month more for the average retiree.
That's not nothing, is it.
It does, until you ask the next question.
Which is how much of it do you get to keep.
And that answer is not known yet. The 2027 Part B premium hasn't been announced. Social Security gives you the raise number first, and then Medicare tells you later what it's going to cost you. The timing is a little cruel.
So you're celebrating seventy-five dollars and you don't know what you're celebrating yet.
the situation. You see the gross, not the net.
That is very relatable to anyone who's ever gotten a raise and then looked at their paycheck.
The federal government has mastered that tradition.
Now, the bonus question. If you're happy with your Medicare plan, do you have to re-enroll by December 7 to keep it?
False, and Ian quotes Medicare's own language on this. If you've reviewed your options and you're happy with your current coverage, you don't need to do anything, coverage continues automatically.
Okay but there's a catch in that sentence.
You heard it.
Reviewed. The reviewing part has to happen.
Ian makes the same point. You don't have to re-enroll, but you do have to look. Because your plan may have changed its formulary, its network, its premiums. If you reviewed it and you're fine, great. If you just skipped it and assumed, that's different.
I think a lot of people hear automatic renewal and stop reading.
Which is why it's in the quiz.
Stepping back, if I had to pick the two or three things from this whole episode that I want people to remember, the QCD is one of them. That number Eddie mentioned earlier, that ceiling on what you can give directly to charity, no income tax, and it satisfies your RMD on top of it. That's a big deal.
That lookback mechanism is the part that really gets me. What you just described -- those year-end choices rippling forward two full years -- most people never feel that connection. The 2028 cost is sitting there quietly, waiting, while someone's making financial moves without any sense that Medicare is watching.
And the zero-dollar plan that isn't zero. Because that one just feels like a trap.
It is a trap. A legal, technically-disclosed trap, but a trap.
If any of these questions made you stop and go, wait, I'm not sure how I stand on that, that's the signal. And Ian says that in the article. Any question that made you think about your own situation is a good one to bring to someone who can look at your actual numbers.
And the Fiscal Fridays event in Scottsdale on October 23 is specifically designed for that. The advisors take questions from the room after the show. Live, in person, with the pocket watch.
And presumably the spray bottle.
I assume it comes to all events.
There's a number in Ian's article to call if you want to save your seat, and our team at American Retirement Advisors can point you to that. The specifics of how any of today's topics apply to your situation, the QCD rules at your particular IRA custodian, where your income falls relative to those Medicare thresholds, those are questions for one of the advisors, not something to estimate on your own.
And the good news is Ian's piece is right there to read. All eight of them, with the full explanations, are in the article. It's a really useful thing to send to a sibling or a parent who's in Medicare or getting close.
Forward it to someone who needs it. And go back and check your own answers. Eddie, what did you get?
I'm going to plead the fifth on the charitable deduction one. Let's say I'm in the good shape category.
Five to seven. Noted. Thanks for being here with me today, everyone. Read Ian Schaeffer's article, take the quiz seriously, and if a question hits close to home, sit down with an advisor who can look at your situation and give you a real answer. That's what they're there for.