What's My House Worth?

By Kimberly Lankford, Contributing Editor

From Kiplinger's Personal Finance magazine, June 2008

Reducing Medicare premiums.

I've been paying extra for Medicare Part B because my income exceeds the current limits. Can I get my Part B premiums reduced after I retire in August and my income goes down, or do I need to wait until 2009 for the premiums to be readjusted?
B.B., via e-mail

You can get your Part B premiums reduced as soon as you retire. In 2007, Medicare imposed premium surcharges for Part B coverage for higher-income beneficiaries. Now, joint filers who earned $164,000 or less in 2006 (including tax-exempt interest income) and single filers who earned $82,000 or less pay the current base rate of $96.40 each per month for the year (2008 premiums are based on 2006 income because those were the most recent tax returns on file with the IRS). Everyone who earned more pays more; joint filers who earned more than $410,000 and single filers who earned more than $205,000 pay the top monthly rate of $238.40.

But certain so-called life-changing events -- and retirement is one of them -- can qualify you for a premium adjustment (other events include death of a spouse, marriage, divorce, and a reduction in income due to the loss of income-producing property or the loss of certain forms of pension income).

Contact the Social Security Administration at 800-772-1213, or visit your local field office. You'll need to file Form SSA-44, which includes detailed instructions about the supporting information you'll need to submit. If retirement brings your 2008 income below the surcharge cutoff, your 2008 premiums will be recalculated and any excess you've already paid will be refunded.

For more information, see Medicare Part B Premiums: New Rules for Beneficiaries with Higher Incomes.

Fees for ADRs.

On my monthly statement from TD Ameritrade, I noticed a $6 ÒADR service feeÓ on 300 shares of Tata Motors. When I called TD Ameritrade, the representative told me that charge was showing up on some foreign stocks but couldn't give a reason for it. In the future, will I pay a fee on any ADRs I own?
Edward Wood; Raleigh, N.C.

You won't have to pay a fee for all American depositary receipts, but there's nothing you can do about the one TD Ameritrade is charging you. ADRs, which represent shares of ownership in a foreign company, trade in the U.S. in dollars. Some ADRs come with a contractual provision that allows the broker, in this case TD Ameritrade, to levy "depositary services fees."

The charges, commonly 2 cents per share, are intended to cover the cost of coordinating overseas investments. For ADRs that include this provision, the broker can levy the charge at any time, but no more than once a year. Your broker should be able to give you a list of ADRs with these fees. They're most likely to be tacked on to companies based in developing countries, where it's more expensive to operate.

Prepaid-tuition plans.

When our 15-month-old son was born, my wife and I opened a mutual fund account for him, where we put any gift money he receives. Because the success of the fund depends on the stock market, we're leaning toward enrolling him in the Florida prepaid-tuition program as well, which is guaranteed by the state. Is this a good idea?
T.T., Orlando

You're on the right track. Having some money invested in a strong prepaid-tuition plan and some in a mutual fund can be a good way to diversify college savings. Plus, you're lucky you live in Florida, which is one of the few states that still has a prepaid-tuition plan that has not been modified or scaled back, says Mari Adam, a certified financial planner in Boca Raton, Fla. As long as you or your child has been a Florida resident for at least 12 months, you're eligible to sign up.

The plan promises to cover the cost of tuition at a public college in Florida, but you can use the money at almost any accredited private or public college throughout the U.S. The downside is that the prepaid amount covers the entire cost only at public institutions in Florida, which have some of the lowest tuition charges in the U.S.

Because the plan might not cover the full bill for tuition, room and board -- especially at an out-of-state or private college -- you could supplement the prepaid plan with other investments. One good option is a state-sponsored 529 college-savings plan. Money in a 529 can be withdrawn tax-free for college costs, and about half the states offer a state income-tax deduction for 529 contri-butions. Because Florida isn't among them, Adam generally recommends that her clients go with Utah's plan, which has low fees and invests in a variety of Vanguard funds.

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