[kbace6]

We are in the planning stages for some retirement income and watched a financial video on YT that alluded to an increase in the cost of medicare depending on your income.

The question I have for you more seasoned folks is, have any of you been on the edge of income where you paid a particular price for medicare one year and then more the next year due to a spike in your income, and then the cost of medicare went back down again the next year because the spike in your income may have been just a one-time thing?

I'm not talking about the government changing the costs, but rather where your individual situation was the catalyst.

Thank you in advance for your informed answers.

[retiredguy123]

For 2023, your Medicare premium is determined based on your MAGI (modified adjusted gross income) for 2021. For 2024, the premium will be based on your MAGI for 2022. So, your Medicare premium, IRMAA adjustment, can change every year if your income changes.

[Caymus]

At least for the first year you can file form SSA-44 (Life Changing Event). I just filed it, since this will be my first year on Medicare after retirement.

[MrFlorida]

They use your income from 2 years back. Depends on how much you made at that time.

[chrissy2231]

Originally Posted by kbace6

We are in the planning stages for some retirement income and watched a financial video on YT that alluded to an increase in the cost of medicare depending on your income.

The question I have for you more seasoned folks is, have any of you been on the edge of income where you paid a particular price for medicare one year and then more the next year due to a spike in your income, and then the cost of medicare went back down again the next year because the spike in your income may have been just a one-time thing?

I'm not talking about the government changing the costs, but rather where your individual situation was the catalyst.

Thank you in advance for your informed answers.

FL BL or UHC Med Advantage are the best plans!

[BrianL99]

Originally Posted by kbace6

We are in the planning stages for some retirement income and watched a financial video on YT that alluded to an increase in the cost of medicare depending on your income.

The question I have for you more seasoned folks is, have any of you been on the edge of income where you paid a particular price for medicare one year and then more the next year due to a spike in your income, and then the cost of medicare went back down again the next year because the spike in your income may have been just a one-time thing?

I'm not talking about the government changing the costs, but rather where your individual situation was the catalyst.

Thank you in advance for your informed answers.

When I got my letter this year, announcing the 8% increase in Social Security, it also contained an IRMMA determination, that my Medicare Part B increased to $560.50, because I sold some property last year. Capital Gains contribute towards your MAGI (Modified Adjusted Gross Income).

Medicare relies on the last 1040 you filed, to make the determination. When you have a "qualifying life event", you can request a modification and they're pretty good about that. I've had 2 modification in the last 3 years and it didn't take long to get an answer from them.

[Keefelane66]

If you filed individually and reported $97,000 or less in modified adjusted gross income (MAGI) on your 2021 tax return, you won't be charged higher rates for Medicare Part B (medical coverage) and Part D (prescription coverage) in 2023. For joint filers, the income limit is $194,000 or less.Oct 24, 2022

[Oldragbagger]

Originally Posted by kbace6

We are in the planning stages for some retirement income and watched a financial video on YT that alluded to an increase in the cost of medicare depending on your income.

The question I have for you more seasoned folks is, have any of you been on the edge of income where you paid a particular price for medicare one year and then more the next year due to a spike in your income, and then the cost of medicare went back down again the next year because the spike in your income may have been just a one-time thing?

I'm not talking about the government changing the costs, but rather where your individual situation was the catalyst.

Thank you in advance for your informed answers.

Yes, we did. The first year my husband was on Medicare he was still working. His employer required everyone of Medicare age to take Medicare and they provided a gap plan. His income was well above the threshold and he had to pay a higher premium to Medicare for his coverage. When he retired a year later his income dropped below the threshold and his Medicare premium dropped to the normal cost. We had to do some paperwork to show the reduction in income and that was it.

[Boomer]

Originally Posted by kbace6

We are in the planning stages for some retirement income and watched a financial video on YT that alluded to an increase in the cost of medicare depending on your income.

The question I have for you more seasoned folks is, have any of you been on the edge of income where you paid a particular price for medicare one year and then more the next year due to a spike in your income, and then the cost of medicare went back down again the next year because the spike in your income may have been just a one-time thing?

I'm not talking about the government changing the costs, but rather where your individual situation was the catalyst.

Thank you in advance for your informed answers.

IRMAA's two-year lookback at your MAGI can cause the income threshold to sneak up on you. Cross it big or cross it by only a tiny amount -- no difference -- IRMAA is lurking there to get you -- two years later.

(I recently read an article that explained IRMAA pretty well. I will see if I can locate it and link it in here later.)

We reach Medicare age at 65, but the age when the RMD kicks in is now 72. (They keep raising the age, so that is good thing for you if you have IRAs.)

There are a couple of things that might help you dodge IRMAA:

If you have IRAs, you might want to look into converting them to Roth IRAs, especially while you are in the years between Medicare and the RMD and have retired to a lower income for a while, with other taxable sources of income outside your tax-deferred accounts.......

It could make sense to take a tax hit earlier in retirement, ahead of the RMD age. If you don't need the income, the conversion to Roth allows your money to continue to grow but withdrawals will not be taxed. If you decide to do this, get the advice of a tax accountant, so you take the steps perfectly. (I did conversions for a while. I regret not doing more of them.)

Once you get to RMD age and find that the RMD is going to cause you to get hit with IRMAA -- and if you are charitably inclined and/or maybe would rather give money away than give it to the government -- you can take your RMD as a QCD (Qualified Charitable Distribution). A QCD has certain steps that must be taken, but when done correctly, the donated amount is not included at all in the AGI. (A QCD must go directly to a qualified charity. It cannot go to a donor-advised fund.)

Disclosure: Take this as a starting point and get advice from a qualified accountant before you do anything. What I am giving you here can be used as a starting point with enough vocabulary and basic info to prepare for a discussion with a professional. For all you know, I could be your old high school English teacher.

Boomer

PS: Later, I will try to find that article I mentioned.

[retiredguy123]

Note that the RMD starting age is now 73 for those turning 73 in 2023.

[Boomer]

Originally Posted by retiredguy123

Note that the RMD starting age is now 73 for those turning 73 in 2023.

Thanks for the correction, rt123. I was a year behind in the age I put in my post.

Boomer

[retiredguy123]

If you have a good employer health insurance plan in retirement, and you are not required to have Medicare Part B, I would suggest that you do the math to see if Medicare is worth the cost, especially if you are subject to IRMAA. In my case, as a retired Federal employee, Medicare has never been worth cost, so I have never signed up for it. Most of the Medicare Part B benefits are redundant with my Federal insurance plan.

[villagetinker]

Originally Posted by kbace6

We are in the planning stages for some retirement income and watched a financial video on YT that alluded to an increase in the cost of medicare depending on your income.

The question I have for you more seasoned folks is, have any of you been on the edge of income where you paid a particular price for medicare one year and then more the next year due to a spike in your income, and then the cost of medicare went back down again the next year because the spike in your income may have been just a one-time thing?

I'm not talking about the government changing the costs, but rather where your individual situation was the catalyst.

Thank you in advance for your informed answers.

The short answer is yes. Previous replies provide a lot of additional info. Since you are exploring this topic, be sure to go to the SHINE website: SHINE - Home they will give you UNBIASED information on the various healthcare options. Be aware that Villages Health (PCP doctor) ONLY accepts 3 or 4 ADVANTAGE PLANS, to make things very confusing, Villages SPECIALISTS and the local hospitals accept Medicare.
Send me a PM with your phone number if you would like to discuss in detail.

We were in BOTH for a while, had problems with the Villages Health system advantage plans, and had to drop out, get back the regular Medicare and find new Primary Care Physician.

[Boomer]

This morning when I pitched in here with a few things I have learned about IRMAA, I said I would look for an article I had read recently, and I would come back and bring it for you.

Here it is:

What Is the Medicare IRMAA, and When Does It Apply? - NerdWallet

Boomer

[#1bulldog]

My AGI hit a higher income bracket for 2019, so my Medicare premium was raised after filing my taxes in 2020. The higher premium was charged all through 2021 even though my AGI went back down to the lowest bracket for 2020 and 2021. The premium didn’t go back to the lowest possible until January 2022. So I wound up paying the higher premium for about a year and a half.