Your Insurance Agent, Financial Professional and Tax Preparer: Who Does What

Retirement decisions rarely stay in one lane. A choice about income can change your taxes, which can change your Medicare premiums, which can change which coverage makes sense. Most people end up with more than one professional in the picture.

This guide explains who usually does what, where the handoffs happen, and how to keep everyone working from the same facts without giving up control of the decisions.

Who does what on a retirement team?

Each professional answers a different kind of question, and each is licensed or overseen by a different body. FINRA, the organization that oversees brokerage firms, lists these roles side by side:

The IRS notes that tax return preparers include certified public accountants, enrolled agents, attorneys and many others who do not hold a professional credential. Paid federal tax return preparers generally need a preparer tax identification number. That number alone is not a professional credential, so ask about credentials and any applicable state requirements.

Where does insurance overlap with taxes and investments?

At a few predictable points: retirement income, health savings accounts, life insurance payouts and beneficiaries. These are the moments when it helps for your professionals to be working from the same facts.

Income and Medicare premiums. Higher earners pay an extra amount for Part B and Part D, called IRMAA. Social Security sets it from the income on your tax return from two years earlier. A large withdrawal or a one-time sale can push you over a bracket. IRMAA applies no matter which plan you choose, so it is an income and tax question first. If your income dropped because of a life-changing event like retirement, Social Security has a process to ask for a new decision. See how IRMAA works.

Health savings accounts. The IRS says your contribution limit drops to zero starting with the first month you are enrolled in Medicare. When to stop contributing is a timing question that touches your employer, your tax preparer and your Medicare start date. The HSAs and Medicare guide explains the details.

Life insurance payouts. The IRS says life insurance proceeds paid to a beneficiary because the insured person died generally are not counted as gross income, though interest on them is taxable. How a policy fits a trust or estate plan is a question for an attorney. The insurance side is covered in life insurance for retirees.

Beneficiaries. Life insurance policies and retirement accounts each have their own beneficiary forms. Review those designations with your attorney and the insurer or account custodian so they reflect your intentions and work with your estate plan. Do not assume a change to your will updates those forms.

What should you share, and with whom?

Share the documents each person needs for their part, and decide yourself what they may pass along to one another.

For a Medicare or health insurance review: your Medicare card, current plan cards, the Annual Notice of Change your plan mailed in the fall, a medication list with doses, your doctors, and any letters about IRMAA or Extra Help. The Medicare review checklist has the full list.

For a life insurance review: each policy or its latest statement, your employer's benefits summary and your beneficiaries' names.

For your tax professional: your recent returns, plus any question about how a retirement income choice might change your taxes or your Medicare premiums.

For your financial professional: how your insurance premiums fit your monthly income plan, and any policy with cash value you want them to know about.

What should you ask each professional?

Ask everyone the same four questions: What are you licensed to do? How are you paid? What will you not advise on? Who else should look at this?

The answers tell you where each person's part starts and stops. Insurance agents are usually paid by the insurance company when you buy a policy, which is why a Medicare agent's help typically costs you nothing; how Medicare agents get paid explains it. Other professionals may charge a fee, earn a commission, or both. Neither is automatically better. You just want to know.

FINRA calls checking a professional's registration "a vital step." Use BrokerCheck for securities brokers and the SEC Investment Adviser Public Disclosure database for investment advisers; your state securities regulator can also help. For insurance agents in Nebraska, use the Department of Insurance company and producer search.

The NAIC's life insurance buyer's guide says an insurance agent, financial advisor or insurance company representative can help you evaluate your insurance needs. In practice, that works best when each one knows what the others have already said.

How does Bill fit into this?

Bill handles the insurance part: Medicare plans and life and health coverage. Decisions about taxes, investments and legal documents stay with the professionals you choose for them.

Bill Jurey is an independent licensed insurance agent in Lincoln, licensed since 2017 and helping people with Medicare since 2020. He is not a financial planner, investment professional, tax preparer or attorney, and he does not give advice in those areas. If your financial or tax professional has raised an insurance question, you can bring it to the conversation, and you decide what gets shared with whom.

For Medicare questions, unbiased help is also available from Medicare.gov, from 1-800-MEDICARE (1-800-633-4227, available 24 hours a day, 7 days a week; TTY 1-877-486-2048) and from Nebraska SHIP, formerly SHIIP, at 1-800-234-7119. You can read more about working with Bill, or call Bill when you want to go through the insurance pieces.