I received my IRMAA increase, Arrgh!

[Time2]

In 2022 I made a big mistake and made a large withdrawal at the beginning of the years and then another one at the end of the year, not realizing I had made the first withdrawal. I had been taking next years income at the end of each year, still haven't made sense of what I did.

I just received notice from SSA about my IRMMA increase. The form says,


"If you have medicare part B, the total 2024 premium includes:
-- $174.70 for the standard Medicare premium, plus
-- any surcharges you may owe for late enrollment, plus
--$279.50 for the Medicare Part B IRMAA based on you 2022 income tax return."


Does that really mean I owe $174.70 + $279.50 = $454.20 every month for the next 12 months?
Shoot me now!

 

[Winemaker]

Welcome to IRMAA!

 

[SecondCor521]

I didn't check your math, but yeah, that's how IRMAA works.

If it helps, it does go year by year, so if your 2023 MAGI was lower, you might only pay IRMAA for 2024 and not in 2025 and beyond.

There's an IRMAA appeal process on an SSA-44 or some such form you could look into, but it doesn't sound like you qualify. You might, though.

 

[braumeister]

Does that really mean I owe $174.70 + $279.50 = $454.20 every month for the next 12 months?

Yes, that would be Tier 3, which is 2.6 times the base rate for Part B.

The details:
https://thefinancebuff.com/medicare-irmaa-income-brackets.html

 

[COcheesehead]

It’s not what you make, it’s what you keep.
There are some gotcha’s as your income rises.

 

[MichaelB]

So, no Plan D? That too would be subject to IRMAA


I look at IRMAA as a reduction in Medicare subsidy, which is what it really is.

 

[Midpack]

And if you have a Part D plan, you get that penalty too, another $53.80/mo on top of that premium, but paid to Medicare. I’ll be thrilled when we don’t have to pay IRMAA anymore in a couple years.

 

[Time2]

And if you have a Part D plan, you get that penalty too, another $53.80/mo on top of that premium, but paid to Medicare. I’ll be thrilled when we don’t have to pay IRMAA anymore in a couple years.

Are you pouring sand on my wound?



Yes, I do have $53.80 to pay on my Part D.

 

[audreyh1]

DH was paying that level for 2023 based on our 2021 income where we got hit with some extra large capital gains distributions. We had made some sizeable charitable donations that year so our taxes weren’t that high, but that didn’t help our MAGI.

Fortunately for next year we expect to drop to that first level of IRMAA which will be the lowest for a while.

I’m actually planning to take some gains to increase our income this year in order to hit that first level of IRMAA for 2025. Trying to smooth this out and reduce future capital gains distributions.

But yeah, every Nov/Dec I’m working hard to manage our MAGI levels for the year after next.

 

[Time2]

My wife will be 65 in June 2025, she will then start Medicare, will her premium also be hit with IRMAA?

 

[braumeister]

My wife will be 65 in June 2025, she will then start Medicare, will her premium also be hit with IRMAA?

Depends on your 2023 income.

 

[audreyh1]

My wife will be 65 in June 2025, she will then start Medicare, will her premium also be hit with IRMAA?

If your joint income this year pushes you into IRMAA for 2025 then yes, it will affect her premiums too.

The 2022 income does not affect 2025. This year 2023 does.

 

[TheWizard]

Are you pouring sand on my wound?



Yes, I do have $53.80 to pay on my Part D.

Salt.
He's pouring SALT on your wound...

 

[Surewhitey]

Nice to learn about this prior to the need. Probably won't affect us, but we can hope.

Stinks after likely paying in the max over the years...

 

[TheWizard]

For whatever little consolation it is, I've been in the middle IRMAA tiers since I started Medicare in 2015.
And I always will be, based on my projections.
I do a small Roth conversion each December now, to reduce my tax-deferred account a bit further but calculated not to get me into the next higher IRMAA tier...

 

[Time2]

Sorry, made a date error in my previous post, it should have said,
My wife will be 65 in June 2024, she will then start Medicare, will her premium also be hit with IRMAA?

 

[MichaelB]

Sorry, made a date error in my previous post, it should have said,
My wife will be 65 in June 2024, she will then start Medicare, will her premium also be hit with IRMAA?

Yup.

 

[pacergal]

One way to look at it, be thankful you have the income you do!
Enjoy life!

 

[Car-Guy]

But, but, but, you should feel good about contributing more and knowing you are helping keep the cost down for others less fortunate. I'm sure that's where that extra money is going.

 

[MichaelB]

But, but, but, you should feel good about contributing more and knowing you are helping keep the cost down for others less fortunate. I'm sure that's where that extra money is going.

Actually, Medicare Part B is subsidized, so the IRMAA payment means taxpayers don’t have to chip in so much subsidy and those of us that pay IRMAA are paying a greater share of our own health care premium.

 

[Car-Guy]

Actually, Medicare Part B is subsidized, so the IRMAA payment means taxpayers don’t have to chip in so much subsidy and those of us that pay IRMAA are paying a greater share of our own health care premium.

After all is said and done, it comes out to about the same thing from my POV. It's simply a success tax.

 

[socca]

... Does that really mean I owe $174.70 + $279.50 = $454.20 every month for the next 12 months?
Shoot me now!

Well, the [A]CA wants over $900 / month from me (no subsidy), so that looks like a bargain! I'm going with a non-[A]CA policy for 2024, as I have for many years past.

 

[audreyh1]

Sorry, made a date error in my previous post, it should have said,
My wife will be 65 in June 2024, she will then start Medicare, will her premium also be hit with IRMAA?

Tough break. At least she only pays it for 7 months.

 

[braumeister]

And it's important to remember that this calculation happens every year, so it's not like you're locked into a higher tier forever. It can go down as automatically as it goes up.

 

[skyking1]

One way to look at it, be thankful you have the income you do!
Enjoy life!

So much this.