I have read that retirees will be getting a nice cost-of-living increase in our Social Security benefits next year but what about Medicare? What will the Medicare Part B monthly premiums and other Medicare costs be in 2023?

From an entitlement program standpoint, 2023 is going to be a very good year for retirees! Not only will you receive a nice 8.7% cost-of-living increase in your Social Security retirement benefits – the largest since 1981 – the Centers for Medicare and Medicaid Services also recently announced that your Medicare Part B standard monthly premium will be lowered 3%, or $5.20, from the current rate of $170.10 per month, to $164.90 per month in 2023.

The reason for the reduction is a correction to last year's hefty Part B premium increase, which was larger than it needed to be. The 2022 premium hike of about 14.5% was announced amid uncertainty about the potential impact of a new Alzheimer's drug called Aduhelm, which threatened to cause a surge in Medicare costs. To curb costs, Medicare sharply limited coverage of the drug and the cost of the drug was cut roughly in half from an original cost of $56,000 a year. The price increase without an offsetting increase in costs created a large financial reserve for Part B, allowing the program to reduce next year's premium.

You will also be happy to know that in addition to the premium reduction, the annual deductible for Medicare Part B will also be lowered $7 from $233 in 2022, to $226 in 2023. If you have a Medicare Part D prescription drug plan, the average premium in 2023 will be about $31.50, which is a 1.8% decrease from $32.08 in 2022.

The deductible for Medicare Part A (hospital coverage) per benefit period (which generally starts upon admittance to the hospital) will be $1,600 in 2023, up $44 from this year's $1,556. That applies to the first 60 days of inpatient care. For the 61st through 90th day, the coinsurance will be $400 per day, up from $389 this year. For days 91 to 150, the charge will be $800 per day (up from $778 in 2022). Care in a skilled nursing facility coinsurance for days 21-100 will also increase to $200 per day, up from $194.50 in 2022.

Wealthy Beneficiary Impact

High earning Medicare beneficiaries, which makes up about 7% of all Medicare recipients, will also receive a break in 2023. Medicare surcharges for high earners are based on adjusted gross income (AGI) from two years earlier, which means that 2023 Part B premiums are determined by 2021 annual income.

If your 2021 income was from $97,000 to $123,000 as an individual filer, or between $194,000 to $246,000 for married couples filing jointly, your 2023 Part B monthly premium will be $230.80 in 2023, down from $238.10 in 2022.

Monthly premiums for individual filers with an income between $123,000 and $153,000, or from $246,000 to $306,000 for joint filers, will decrease to $329.70 in 2023, from $340.20 in 2022.

Individuals earning in excess of $153,000 to $183,000, or $306,000 to $366,000 for joint filers, will see their monthly premium decrease from $442.30 in 2022, to $428.60 in 2023.

Taxpayers with incomes from $183,000 to $500,000, or $366,000 to $750,000 for joint filers, will have premiums of $527.50 in 2023, down from $544.30 in 2022.

Single filers with income of $500,000 or more, or married filing jointly taxpayers with income of $750,000 or more, will pay $560.50 per month in 2023, down from premiums of $578.30 in 2022.

High-income beneficiaries with a Medicare Part D prescription drug plan will also pay a little less next year. If your income was over $97,000 as a single filer, or $194,000 for joint filers, there will be a surcharge ranging between $12.20 to $76.40 monthly, based on your income level.

For more information on Medicare's 2023 costs see Medicare.gov/basics/costs/medicare-costs.

Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living" book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization's official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.

November is an excellent month to consider plans for charitable gifts in 2022. These gifts could include an IRA charitable rollover, a gift of cash or a gift of appreciated land.

1. IRA Charitable Rollover — The IRS refers to the IRA charitable rollover as a qualified charitable distribution (QCD). An individual over age 70½ is permitted to make a transfer directly from his or her IRA custodian to a qualified charity. The transfer is not included in taxable income. If the IRA owner is over age 72, the distribution may fulfill part or all of the required minimum distribution (RMD).

Because many individuals have invested their IRAs in stocks, bonds or other securities, it may be necessary to exchange the IRA stock or bond accounts for an IRA money market fund prior to the distribution. Most custodians require a QCD to be paid from a money market account or similar fund.

There are some limits for the IRA charitable rollover. The IRA owner must be at least age 70½ and the maximum transfer in one year is $100,000. The transfer must be to a qualified exempt charity and may be for a designated purpose or field of interest fund. However, the transfer may not be to a donor advised fund (DAF) or supporting organization (SO). Furthermore, it may not be for a charity dinner or other event that involves a partial benefit to the donor. In addition, the entire QCD must be for a qualified charitable purpose.

2. Gifts of Cash — Individuals who itemize deductions may deduct 2022 gifts of cash up to 60% of their contribution base, which is usually adjusted gross income (AGI). A couple with $100,000 in income may give and deduct up to $60,000 this year. While 60% of AGI limit is substantial, some generous individuals give more than this amount. For gifts that exceed the deduction limit, the IRS permits carry forward of the excess gift amounts over the next five years.

3. Gifts of Land — With substantial increases in value for real property, many donors will find a gift of appreciated property made in 2022 is attractive. A gift of appreciated land provides two benefits for the donor. First, the donor may receive a charitable contribution deduction based on the fair market value of the land. Second, the charity is tax-exempt and able to sell the asset tax free. Therefore, if the donor donates the asset, the donor can bypass tax on the capital gain. For example, if the donor purchased development land ten years ago for $50,000 and the land is now worth $250,000, the donor would pay capital gains tax on $200,000 if he or she sold the property on their own. By giving the land to charity, however, the donor may receive a deduction for the $250,000 in value and bypass the tax on the $200,000 of potential gain. Because the donor is receiving both the deduction and capital gain bypass benefits, this type of charitable deduction is permitted up to 30% of adjusted gross income (AGI). If the gift value exceeds this limit, it may be carried forward for an additional five years. For example, a donor with adjusted gross income of $100,000 this year makes a gift of appreciated land with a fair market value of $80,000. The donor can deduct $30,000 this year. The donor will carry forward and deduct the remaining $50,000 gift value for up to five additional years.

Editor's Note: Many donors make their largest gifts in November or December. This is a good time to plan ahead and consider options for gifts in 2022.

How do I find a 401(k) plan with a former employer? I contributed money to the account many years ago but forgot about it until recently.

If you think you may have lost track of a 401(k) retirement account, you are not alone. As Americans move from job to job, many leave company sponsored 401(k) plans behind, believing they will deal with it later, but never do.

According to a recent study, Americans have left behind approximately $1.35 trillion in retirement accounts that are connected to previous employers. To help find an old 401(k) account, here are some suggestions to help with your search.

Call Your Former Employer

If you need help tracking down your former employer because it may have moved, changed owners or merged with another firm, help is available from the Labor Department (AskEBSA.dol.gov) and the Pension Rights Center and Pension Action Center (PensionRights.org/find-help).

You may want to contact your former employer's human resources department regarding a forgotten 401(k) account. Ask to see if you ever participated in their 401(k) plan, and if so, how much it is worth. You may obtain the name of the financial institution that manages the 401(k) plan. The human resources department may be able to check for you if you provide them with your Social Security number and the dates you worked for them.

If more than $5,000 was left in your 401(k) account, the money is likely still in your workplace account. Your former employer can provide the forms necessary to roll over your retirement money to a different 401(k) or to an individual retirement account (IRA) through your employer or the financial institution. You may be directed to the contact information for any outside financial institution overseeing the plan on your employer's behalf. By following the appropriate instructions, you will be able to move your retirement money where you want.

However, if your old 401(k) account was under $5,000, your former employer may have transferred the money to a default IRA. Your cash may have been moved to an interest-bearing, federally insured bank account or to your state's unclaimed property fund. If this is the case, you will need to track down the account yourself, because your employer will not have access to those records.

Searching Tools

While there is no federally run national database where you can look for all the retirement accounts that are associated with your name, a good place to start your search is with the Department of Labor's abandoned plan database (AskEBSA.dol.gov/AbandonedPlanSearch).

You can also search online for the National Registry of Unclaimed Retirement Benefits. Many companies register with the site to help facilitate a reunion between former employees and their retirement money.

To see if your 401(k) money was turned over to the state's unclaimed property fund, use the National Association of Unclaimed Property Administrators website to search. If you believe you were covered under a traditional pension plan that was disbanded, call the U.S. Pension Guaranty Corp. at 800-326-5678, or use the trusteed plan search tool at PBGC.gov/search-trusteed-plans.

Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living" book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization's official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.

Each year, IRAs and 401(k)s are subject to required minimum distributions (RMDs). Because the distributions start at just under 4% at age 72 and then slowly increase, many IRA and 401(k) plans earn more than those payouts and will continue to grow. While the distributions will become larger as the owner ages, most individuals will eventually pass away with an IRA or 401(k) balance reasonably close to the value of their plan at age 72.

For this reason, the eventual distribution options for an IRA or 401(k) are quite important. For many individuals, the IRA or 401(k) may be the largest asset in their estate.

IRAs and 401(k)s are transferred to a designated beneficiary that is selected on an IRA or 401(k) custodian's form. The five common choices for designated beneficiary are the surviving spouse, children, charity, a trust for children or a trust for spouse and children.

1. Spouse as Beneficiary

The most common choice for a married couple is to select the surviving spouse as the designated beneficiary of an IRA or 401(k). When the IRA or 401(k) owner passes away, the surviving spouse usually chooses to roll the decedent's IRA over into his or her IRA.

Assume that Harry Smith is the IRA owner and he passes away with Helen Smith as his designated beneficiary. Helen is age 68 when Harry passes away and she rolls over the IRA into her plan.

When Helen reaches age 72, she must start taking required minimum distributions. The initial minimum distribution must be taken by April 1 of the next year and is just under 4%. Her distribution will steadily increase as she becomes more senior.

Because Helen rolled over Harry's IRA into her IRA, she qualifies for the lower required minimum distributions under the uniform table. Helen often selects children or charities as designated beneficiaries.

If you are in a community property state and plan to leave your IRA to a trust or other beneficiary that is not your spouse, then it is essential to obtain a written consent from your spouse. In many states, attorneys who prepare estate plans will frequently use a waiver if the spouse is not the designated beneficiary of an IRA.

2. Children

For a surviving spouse or single person, an IRA or 401(k) may be transferred to children, nephews, nieces, other heirs or charity. Each child or other heir may take distributions for a period of up to ten years. With the exception of a spouse, a minor child, a child with a disability or chronic illness or an heir who is less than ten years younger than the IRA owner, the full IRA must be distributed within ten years of the death of the IRA owner.

Prior to 2020, a child was able to "stretch" the IRA payout over his or her life expectancy. A 60-year-old child of the IRA owner would have been able to start distributions at age 61 at approximately 4% and stretch those payouts over 26 years. Now, a child or other heir of the IRA owner must take all distributions within ten years. A child may choose to wait and take the full payout in the tenth year, but that may greatly increase the tax rate paid on the IRA.

Unfortunately, with many children the ten-year stretch plan will not be successful. CPAs report to the author that approximately one-half of children choose to take the traditional IRA distribution early, even though that means paying the income tax earlier and losing the benefit of the tax-free growth over the maximum distribution period.

3. Charity

For the IRA or 401(k) owner, the qualified plan is a wonderful benefit and a very good asset. However, when the owner passes away, a traditional IRA or 401(k) is often transferred to children with a large "you owe the IRS" tax bill attached (with the exception of a Roth IRA, which is income tax-free). For the vast majority of qualified plans, the child will pay income tax. Worse yet, the IRA or 401(k) distributions may even push the child into a higher tax bracket.

With income tax on the traditional IRA or 401(k) and no income tax paid on the home, land or stocks, the IRA or 401(k) is a less desirable asset for children. In fact, many heirs consider this a "bad asset" because of the income tax on most IRA payouts to children.

For this reason, children would prefer to receive a home, land or stock because there is no income tax bill attached. The wise planning decision is to transfer the home, stocks or land (the good assets) to children and save all the IRA income tax by transferring it to charity.

Because charities are tax exempt, there is no payment of income tax or estate tax on a traditional IRA or 401(k). The charity receives the full value tax free. By transferring the IRA or 401(k) to charity, it is possible to turn a bad asset into a good asset.

4. "Give It Twice" Trust

What plan could protect children from spending the IRA amounts and paying maximum income tax? Could a plan combine the tax-saving benefits of a stretch IRA with a term-of-years or life payout to children or other heirs? Could this plan also have the tax-free growth benefit of a stretch IRA?

A wonderful solution is an IRA to testamentary unitrust plan, which includes all of these benefits. A single person or surviving spouse may create an unfunded lifetime unitrust or testamentary unitrust in a will or living trust. The IRA beneficiary designation is to the trustee of that unitrust.

When the IRA owner passes away, the unitrust is funded with the traditional IRA. Because the unitrust is tax-exempt, there is a bypass of the income tax on the traditional IRA and any future growth. The children or other heirs receive new taxable income from the trust investments. The 5% unitrust payouts may last for a term of 20 years or for their lifetimes.

A very good plan for parents who have made lifetime gifts to charity is to combine a benefit to children with a future benefit to charity. This plan is called a "Give It Twice" trust.

For example, Mary Smith had an $800,000 estate. She lived in a home worth $200,000, had a CD for $200,000 and $400,000 in her traditional IRA. Her IRA was substantial because when her husband Bill passed away, she rolled over his IRA into her IRA. The combined IRA is now half of her estate.

Mary has two children and decides to transfer the home and CDs to the children in equal shares when she passes away. They each receive $200,000 in value from the home and CDs with no income or estate tax.

After Mary passes away, the $400,000 IRA is transferred into a charitable remainder trust. It receives the IRA proceeds and invests the full $400,000. The trust pays 5%, which is divided between the two children for a term of 20 years. At the end of 20 years, the trust principal plus growth is given to charity.

Mary was pleased with her plan because she had achieved several goals. First, she provided both principal and income to her children. This is a very good plan because some children will benefit from a period of time to improve their money management skills. Second, she saved all of the income tax on the traditional IRA. Because the unitrust is tax exempt, it receives the entire IRA tax free. The trust earns income for the children for a term of 20 years and is then transferred tax free to charity.

Because the trust benefits the children with more than $400,000 in income and then is given to charity, it truly may be called a "Give It Twice" trust.

5. Trust for Spouse and Children

For individuals with larger estates, it may make good sense to create a trust for surviving spouse and then a term of years for children. After the first person passes away, the IRA is transferred into the trust for the surviving spouse. The trust will distribute income for his or her lifetime and then to the children for a term of 20 years. Following the life of the spouse plus 20 years for the children, the trust remainder is distributed to charity.

This trust has several benefits. First, it may save very large income taxes because the trust is tax exempt. Second, the trust can be a "net plus makeup" plan that allows the spouse to choose to save taxes by taking reduced income during life. This will allow the trust principal to continue to grow and build up the trust so there is greater income to the children.

This plan is an excellent way to benefit the surviving spouse, children and charity.

I recently came across information regarding home sharing programs for homeowners and would like to learn more. I am in my late 60's and interested in renting out a room in my house for extra income. What information can you share?

Because of inflation and rising housing costs, a growing number of homeowners are opting to rent out a spare room in their house as a way to generate some extra income and increase companionship. To find a good fit, homeowners often turn to "home sharing programs" that will match them with someone needing affordable housing.

Be aware that home sharing is not for everyone. Carefully consider the pros and cons of renting out a spare room in your house and make a list of what you want and do not want in a housemate.

You may want to search for information on the internet to help develop your understanding of the home sharing concept. Many websites offer various articles, online lessons and books that can help determine if this is a good option for you.

Home Sharing Tools

If you decide to proceed in finding a renter, a good first step is to seek out a home sharing program in your area.

Home sharing programs, usually nonprofits, screen both homeowners and renters. They check references, handle background checks and consider lifestyle criteria when making matches. They can also help with the leasing agreement that the renter would sign which covers detailed issues such as smoking, pets, chores, overnight guests, use of common rooms and quiet hours.

Most home sharing programs are free to use, and some may charge the homeowner and potential renter a fee to use their services. Use your preferred search engine to locate home sharing programs in your area.

If you do not find a program that serves your area, you can also search for housemates through online home sharing services. Some of the house sharing websites cater to specific age demographics. You may want to find a program that matches young renters with older adults looking to supplement their incomes and share their space.

If you do not have any luck with home sharing sites, contact your Area Agency on Aging. Your local Agency may be able to offer assistance or refer you to local agencies or nonprofit organizations that offer shared housing help.

You can also check with your local community center or place of worship to see if you can post an ad on their bulletin board or in their newsletter. You may want to advertise in your local newspaper or in online rental sites.

If you find someone on your own that you are interested in renting to, have the prospective renter fill out a rental application and ask for references. You can find free rental applications online. It is recommended to run a tenant screening and background check and call the references prior to deciding.

Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living" book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization's official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.

While Social Security will provide approximately 40% of the average person's retirement income, an Individual Retirement Account (IRA) is an essential addition for a successful retirement. Your IRA has two main benefits—contributions to a regular IRA are from pre-tax income and there is tax-free growth. There is another version of an IRA called a Roth IRA, which is funded with after-tax income.

Linda is in her middle working years and anticipates receiving Social Security when she retires. But she has several questions about whether she should also start funding an IRA.

• How should I fund my IRA?
• Is it a good idea to do an IRA rollover?
• At what age should I start taking IRA distributions?
• Should I take the minimum required distribution or a larger amount?

Funding the IRA

If you are not actively participating in another type of qualified retirement plan and are within an adjusted gross income limit, you may qualify to transfer a substantial sum each year into an IRA. The IRA contribution amount is $6,000 this year. If you are over age 50, you may also make an additional $1,000 "catch-up" contribution. The maximum IRA contribution amounts are indexed for inflation in increments of $500. In future years, the contribution amount will increase.

Because Linda is over age 50, she is able to contribute $6,000 and her catch-up amount of $1,000, for a total of $7,000 to her IRA this year.

Linda considers the options to create a regular IRA or a Roth IRA. Because she wants to receive the income tax deduction, she transfers the funds into a regular IRA and deducts the $7,000 on her federal tax returns.

IRA Rollovers

The majority of larger IRAs are funded through rollovers from retirement plans through your employer. If you have a qualified plan through your employment, upon separation from service or reaching a specific age, such as 70, you will usually have an option to rollover to a self-directed IRA.

Normally, your qualified plan through a business has been funded with pretax income. The IRA account also benefits from tax free growth. Therefore, the rollover will be from the other qualified plan into a regular IRA. Your IRA will continue to grow tax free, but future distributions to you will be taxable.

IRAs may be rolled over to a new custodian. The preferred method is to have a custodian-to-custodian transfer. If the funds are transferred directly from one IRA custodian to the new custodian, there is no tax.

While it is permissible for your custodian to transfer funds to you and then for you to make the rollover, your IRA custodian will withhold 20%. Because of the 20% withholding requirement, virtually all IRA rollovers are completed with the custodian-to-custodian method.

An IRA to Roth IRA rollover may also be permissible for you. Generally speaking, people with any adjusted gross income are permitted to transfer a regular IRA to a Roth IRA. The value of the IRA will be included in your taxable income, so you may owe a substantial income tax for the conversion.

The primary benefit of the conversion to the Roth is that a Roth IRA does not have a mandatory distribution requirement at age 72. The funds may be permitted to grow tax free and, at the discretion of the owner, may be withdrawn tax free during retirement years. If the owner of a Roth IRA does not make withdrawals, then the Roth may be transferred to children, who may make tax-free withdrawals over their life expectancy.

IRA Distributions

For a regular IRA, there are specific rules on both contributions and withdrawals. Withdrawals for distributions are generally not taken before age 59½. With limited exceptions, such as uniform distributions over a lifetime, disability, separation from employment after age 55, or other exceptions there is a 10% excise tax in addition to the regular ordinary income tax on withdrawals before age 59½. Therefore, very few individuals take early withdrawals before age 59½.

Between ages 59½ and 72, there is an optional period for withdrawals. The withdrawals are not required, but you may take withdrawal of any amount. Of course, for a regular IRA the amount withdrawn is taxable to you and no longer grows tax free in the fund. Therefore, you may not want to take withdrawals unless you actually need the funds for living expenses.

After you reach age 72, there are required minimum distributions (RMDs). The distributions start at approximately 3.7% at age 72 but increase with age each year. The distribution is calculated using your balance on December 31 multiplied by the appropriate percentage, and must be taken by the end of the next year. If you fail to take your distribution, there is a 50% penalty, so an error or an intentional disregard of the RMD rules is quite rare.

Do you know of any car gadgets that help drivers with mobility issues? I have arthritis in my neck, back and knees which makes it difficult to get in and out of my car and look over my shoulder to backup.

There are a number of inexpensive products you can purchase for your vehicle to help with issues that come with limited mobility. Here are some popular auto aids to consider.

Entry and Exit Aids

For those who have a difficult time entering and exiting a vehicle, there are a variety of support handles and special seat cushions that can help.

One option is a portable support grab bar that inserts into the U-shaped striker plate on the doorframe to make entering and exiting a little easier. Another option is a support handle that straps around the top of the door window frame. A rotating or swiveling seat cushion may also help to pivot more easily in and out of vehicles.

Rear Vision Improvements

To help those with neck and back range of motion problems, which make looking over the shoulder to back-up or merge into traffic difficult, there are special mirrors and back-up cameras available for installation.

To widen rear visibility and eliminate blind spots, additional safety mirrors can clip on to existing rearview mirrors. You may find multiple types of mirrors, ranging from larger panoramic views to smaller mirrors meant to minimize blind spots by adding a small mirror in a corner of the sideview mirrors.

Many drivers find it helpful to add a backup camera. Finding a backup camera with features such as night vision is especially helpful. You may want to look for features such as night vision. The backup camera attaches to a rear license plate and comes with a small monitor that mounts to the dash or windshield. When the vehicle is in reverse, it sends live images wirelessly to the monitor so you can see what is behind you.

Seat Belt Extenders

Seat belt extension products can also make buckling up a little easier. You may need to find a specific extender for the make and model of your vehicle to ensure compatibility. Typically, the extender will fit into the seat belt buckle receiver to add a few inches of length, making it easier to fasten. Another option for seatbelt accessibility is adding an extension handle that attaches to the seat belt strap to make it easier to reach.

Gripping Devices

If you have hand arthritis that makes gripping difficult or painful, consider finding a steering wheel cover that fits over the steering wheel to make it larger, softer and easier to grip. For help twisting open gas caps, you may benefit from the use of a tool that works like a wrench to loosen and tighten caps.

Professional Help

If you need more assistance or specialized recommendations, consider contacting a driver rehabilitation specialist trained to evaluate drivers and provide safety and driving equipment suggestions.

In addition to the types of aids mentioned in this column, there is also a range of adaptive driving equipment that can be professionally installed on a vehicle – like swing-out swivel seats, pedal extenders, hand controls and more – to help people with various abilities. Search online for "driver rehabilitation specialist" to locate one in your area.

Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living" book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization's official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.

The 401(k) is rapidly becoming the most popular qualified retirement plan. More than 90% of large companies now offer a 401(k). With a 401(k), each employee has an individual account and is permitted to transfer a portion of his or her salary directly into the account each year.

Most 401(k) plans qualify for excluding the contribution from your taxable income each year. However, some employers have created a "Roth 401(k)" plan in which after-tax contributions are made.

To encourage employees to fund a 401(k), some employers also create a matching fund. The employer determines the amount of the match and the maximum. While many different plans are selected by employers, a fairly typical employer match is $1 for $2 of contribution up to 6% of the employee's salary. With this plan, an employee who contributes the full 6% would receive a 3% employer match. Therefore, the total 401(k) contribution that year would be equal to 9% of the employee's income.

Contribution Limits

There are several potential contribution limits for employees. In 2022, the voluntary contribution by the employee is limited to $20,500. However, employees over age 50 during the year are permitted to add a "catch up" contribution of $6,500. The total annual employee contribution for those over age 50 is $27,000 this year. Both limits are indexed for inflation and increase in $500 increments. Some companies also will add a match or other company contribution to that amount.

Most companies have highly compensated employees (HCE) who are subject to specific rules. To make certain that the contributions are fair, the employees with income above a certain threshold and owners of more than 5% of a business are limited in their contributions. There are various "safe harbor" provisions that allow the HCEs to contribute without worrying about the annual contribution tests. For example, if there is a non-elective contribution by the company of 3% or more for all employees, then the plan does not have to meet specific standards for highly compensated employees.

401(k) Investments

The employer will select a custodian of the 401(k) and typically there will be a group of mutual funds for the 401(k) investments. The employee will have opportunity to select from the various mutual funds. These mutual funds are usually in four general categories.

The first category is stock mutual funds. Stocks have a long-term return of approximately 10%. For investments of 20 years or more, a percentage of the 401(k) in stocks will usually be a good decision. Stock funds generally include large cap, medium cap and small capitalization companies. Some funds may favor domestic companies and some foreign.

Stock funds should be fairly diversified to minimize the risk of loss if a company were to fail. A portfolio of large, midsized and small company mutual funds may own shares in 1,000 or more companies.

Bonds are the second type of investment fund. Mid-term and long-term bonds have returned approximately 5.5% during the past 75 years. Because bond values change much more slowly than stock values, the bonds are a more stable investment than stocks and are appropriate for shorter timeframes before retirement. As 401(k) owners move into their 50s, 60s and 70s, the percentage of bonds normally increases and that of stocks decreases. Some advisors suggest that the percentage of bonds should match your age. For example, a person age 60 may choose to hold 60% in bonds and 40% in stocks.

Cash is the third investment option. Most 401(k) plans permit a money market fund or similar option. Returns on cash funds are frequently 1% to 3%, but these cash options preserve principal in a downturn.

Real estate is the fourth investment type. Some 401(k) plans permit real estate investment trust (REIT) investments. Real estate may be a good long-term investment, but also involves substantial potential risk.

401(k) Distributions

There are three general periods of time of importance to traditional 401(k) owners. Prior to age 59½, there is a 10% excise tax on distributions. For a regular 401(k), the owner who takes early distributions would pay both income tax plus the additional 10% excise tax. There are exceptions for disability, substantially equal payments over a lifetime or economic hardship, but most individuals attempt to avoid early withdrawals if possible.

Between age 59½ and age 72, there is a voluntary distribution option. As a 401(k) owner, you may choose to take distributions to cover living expenses. The distributions may be any amount from the regular 401(k), but will be reported by you as taxable income.

After age 72 (by April 1 of the following year), the plan owner must take at least the required minimum distribution (RMD). The required minimum distribution starts at approximately 3.7% at age 72 and increases to 8.3% by age 90. With one exception, the distributions by a 401(k) owner are governed by this schedule under the IRS Uniform Table. There is an exception when one spouse is more than 10 years younger than the other. A special table applies in that case.

401(k) Loans

A 401(k) plan document may permit the owner to take a loan from the account. Loans are limited to the lesser of 50% of your plan or $50,000, and must be repaid within five years (except for purchase of a primary residence). A reasonable rate of interest is charged. While the loan is repaid with after-tax dollars, your 401(k) account will grow by the amount of the loan interest.

401(k) Balances

Because the required initial withdrawal amount at age 72 is approximately 3.7%, many individuals with 401(k)s will find that their total fund balance increases until their early to mid-80s. Even with some reduction in balance between ages 85 and 95 because the withdrawal percentages continue to increase, many 401(k) owners will pass away with substantial balances.

Because there is likely to be a significant balance in your 401(k) when you pass away, careful selection of your designated beneficiaries is important. If you pass away with a substantial 401(k) balance, then a significant amount will be distributed to your designated primary or contingent beneficiary. In most cases, your designated beneficiary will have the option of taking distribution of your 401(k) over a term of ten years.

Can you recommend any good online hearing tests? My spouse has hearing loss, but I cannot get them to go in and get their hearing checked, so I thought a simple online test could help show there might be a problem. What are some suggestions?

Online and app-based hearing tests are available to allow individuals to check their hearing. These tests are a quick and convenient option for the millions of Americans that have mild to moderate hearing loss but often ignore it. While the best option is to visit an audiologist for a hearing exam, many individuals may be hesitant.

Who Should Test?

For most people, hearing loss develops gradually over many years, which is the reason many people do not realize they have a hearing problem.

Anyone who has difficulty hearing or understanding what people say, especially in noisier environments or over the phone should get tested. Additionally, those who need a higher volume of music or TV compared to others should take a few minutes to test their hearing.

Self-Hearing Tests

Online and app-based hearing tests can serve as an at home screening tool. They are not meant to be a diagnosis, but rather to give a rough idea if hearing loss exists. For most do-it-yourself hearing tests, wearing headphones or earbuds and sitting in a quiet spot is recommended.

There are two different types of at-home hearing tests available. The first is known as pure-tone testing, where tones are played in decreasing volumes to determine your specific level of hearing loss. The second type is known as speech-in-noise or digits-in-noise (DIN), which requires the individual to identify words, numbers, or phrases amid background noise.

Where to Test

For those who use a smartphone or tablet, your app store may provide options for at-home screening. The World Health Organization has its HearWHO app available and is based on validated digits-in-noise technology.

HearWHO allows users to check their hearing status and monitor it over time using a DIN test. Other apps may use pure-tone and masked threshold tests to give you a detailed picture of your hearing abilities. Look for the free HearWHO app or others available through your app store for your smartphone or tablet.

You can also search for a wide variety of online hearing tests using your preferred search engine. Many of the online hearing tests are completely free to use and take less than five minutes to complete.

What to do with Results

If the tests indicate hearing loss, it is best to think of that as a starting point. Results should be taken to your primary healthcare professional or an audiologist for further evaluation. Many insurance providers and Medicare Advantage plans cover routine hearing exams, however original Medicare does not.

If hearing loss is mild to moderate, over-the-counter (OTC) hearing aids can be a great solution. They can be found online and at popular retail stores near you. OTC hearing aids do not require a prescription or medical examination for purchase and are more affordable than the traditional hearing aids purchased through an audiologist or a licensed hearing instrument specialist, but are often less effective.

Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living" book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization's official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.