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Retiree Medical Trust 2022 Update: Frequently Asked Questions
CREATING A RETIREE MEDICAL TRUST: A Fresh Look at a Proven Solution
How Employers and Employees Can Use Pre-Tax Dollars to Fund Their Retiree Medical Expenses2022 Edition
Frequently Asked Questions about RMT
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Frequently Asked Questions


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• out-of-pocket healthcare-related costs
• health insurance premiums (including Medicare, Medigap, and long-term care insurance)
• costs of dental care, vision care, or hearing aids
• prescription drug expenses.
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• the amount of contributions
• the length of time in which contributions are made
• investment income
• administrative expenses.
Once the trustees define these factors, they can assign benefit levels. Currently, RMTs provide monthly benefits up to $1,300 per month, for life, to career employees (20 years of service).
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• Employee contributions are made with pre-tax money, which means it will not count as taxable income
• The RMT itself accrues earnings on a non-taxable basis
• The RMT benefits are tax-free to the retiree (unlike pension benefits, which are taxable)
This means that the money contributed to an RMT is never taxed. It is a tax avoidance program, not tax deferred like a pension plan. Retirees generally pay taxes on their pension benefits, but RMT are not taxable income.
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For more information about Creating a Retiree Medical Trust: A Fresh Look at a Proven Solution, read the full report.
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