Updated IRMAA estimates for 2025

[audreyh1]

That is my understanding. I don’t worry about accrued interest, just when it’s paid.

If a CD doesn’t pay out in a given year, you don’t owe taxes on income you didn’t yet receive.

If a CD is paying a coupon during a given year, that is income received even if reinvested in the CD.

I also have had some CDs >12 months (like 14, 15, 16, 18) that pay at maturity, but they also pay out YTD accrued interest in Dec.

 

[Car-Guy]

^^^^
Makes sense. Gives me a little more room.


Thanks

 

[RetMD21]

Since there's no way to accurately predict the 2025 (from tax year 2023) numbers, I'm probably gonna make a hard limit of the 2024 number of 206K. I'll maybe even stay a bit under that number as well - just to be sure I didn't miss some "gotcha." YMMV

So the 2025 numbers will be higher than 2024 even if inflation is 0% from now on. MFJ cutoff will be at least $210k. Harry explains it in the first link in the thread. He explains it better than I could. Doesn't this seem to be unnecessarily complicated?

 

[braumeister]

Doesn't this seem to be unnecessarily complicated?

Sheesh! Next thing you know, people will be complaining about pointless bureaucracy!

The Finance Dude's website estimates have always been good ones AFAIK, so I just go by that as my source. He says the 2025 numbers are likely to be $106K single, $212K MFJ to stay under the first IRMAA tier, assuming 3% inflation between now and this time next year, so I think that's reasonably safe. I would still want to be under the limit by a good margin though.

 

[Koolau]

So the 2025 numbers will be higher than 2024 even if inflation is 0% from now on. MFJ cutoff will be at least $210k. Harry explains it in the first link in the thread. He explains it better than I could. Doesn't this seem to be unnecessarily complicated?

It's the gummint. It's supposed to be complicated.

 

[Bigdawg]

Surprised that IRMAA affects 7-8%. Thought it would be much lower. Apparently, I don't make enough $$. Thought I was special. Guess not. LOL

 

[Koolau]

Surprised that IRMAA affects 7-8%. Thought it would be much lower. Apparently, I don't make enough $$. Thought I was special. Guess not. LOL

Well, it's complicated. RMDs can be a big issue and, in our case, we are also trying to "give with a warm hand" and thus we are using our 401(k) money for that.

I do agree that $210k (plus or minus) is a number I would have never guessed I'd be throwing around as "income" (well, MAGI, anyway.) Now, it's becoming "old hat" to me. Heh, heh, financial creep, I guess. As far as
"making that kind of money", we certainly never did - nor do we now. BUT, the "rules" say it's income when we take from the 401(k) so YMMV.

 

[Jenna]

So if you don't want to pay attention to the IRMAA stuff-how much are we talking about as far as total fees for 2 people?

 

[Car-Guy]

^^^^^^
Depends on what tier you are in.

 

[audreyh1]

So if you don't want to pay attention to the IRMAA stuff-how much are we talking about as far as total fees for 2 people?

Unless your joint taxable income + tax exempt interest exceeds $206,000 don't worry about it.

If it does, here are the 2024 tiers and corresponding additional Medicare premiums. This is based on your 2022 income. https://www.cms.gov/newsroom/fact-sheets/2024-medicare-parts-b-premiums-and-deductibles?mod=anlink/

 

[GrayHare]

if you don't pay attention to how much your IRMAA surcharge is, in 2024 it can range from $0 to $11836 per year for a couple

 

[ERhoosier]

Unless your joint taxable income + tax exempt interest exceeds $260,000 don't worry about it.

If it does, here are the 2024 tiers and corresponding additional Medicare premiums. This is based on your 2022 income. https://www.cms.gov/newsroom/fact-sheets/2024-medicare-parts-b-premiums-and-deductibles?mod=anlink%2F

For married filing jointly, IRMAA kicks in for 2024 that kicks in above a 2022 MAGI of $206,000 (not $260,000) from that CMS link.

 

[audreyh1]

For married filing jointly, IRMAA kicks in for 2024 that kicks in above a 2022 MAGI of $206,000 (not $260,000) from that CMS link.

Oops, sorry, I was thinking of the next tier.

 

[Koolau]

I notice my tax return does not specify what my MAGI was for any given year. Just AGI. How do they know MAGI (to deal with IRMAA) if they don't calculate it? IF they calculate it, why don't they show it?


Just wondering, so YMMV.

 

[GrayHare]

because the IRS likes gold, frankincense, and myrrh, that is, there are many MAGIs

 

[audreyh1]

I notice my tax return does not specify what my MAGI was for any given year. Just AGI. How do they know MAGI (to deal with IRMAA) if they don't calculate it? IF they calculate it, why don't they show it?


Just wondering, so YMMV.

The tax return doesn’t spell it out but the SS Administration calculates it from your tax return and shows you the numbers in your IRMAA letter of you are subject to it in the following year. For most people it’s the AGI plus the tax exempt interest that is on your 1040. So it’s easy to calculate.

You don’t pay tax on your MAGI, but rather on your AGI that’s probably why it’s not spelled out on your tax return. Notice it’s the SS Administration that needs the info, not the IRS.

 

[N02L84ER]

Does the MAGI include the nontaxable Social Security benefits?

 

[SevenUp]

because the IRS likes gold, frankincense, and myrrh, that is, there are many MAGIs

^This.

Modified Adjusted Gross Income - Bogleheads can get you to the one you want.

 

[audreyh1]

Does the MAGI include the nontaxable Social Security benefits?

No, according to the link given above. Only the taxable portion counts towards MAGI.
https://www.bogleheads.org/wiki/Modified_Adjusted_Gross_Income

 

[Dtail]

Does the MAGI include the nontaxable Social Security benefits?

Perhaps you are thinking of the MAGI rules for the ACA.

 

[Koolau]

because the IRS likes gold, frankincense, and myrrh, that is, there are many MAGIs

Very good! I see what you did there.

 

[JoeWras]

Pedantic question about IRMAA

The time has come for me to start worrying about IRMAA. We don't make anything close to the MFJ number for IRMAA, but we are doing Roth conversions, so it is easy to fall into the trap. We don't even do big Roth conversions except during years we bunch our charitable contributions.

So the pedantic scenario and question:

1) My birthday is mid January (NOT Jan 1). I turn 65 in 2028. DW is just a bit younger.
2) Medicare will start for me on January 1, 2028. Correct?
3) I can apply for Medicare in late 2027, right?
4) My IRMAA will apply from the 2026 tax return, correct?

I'm nervous because of January. Key is I am not a Jan 1 baby. Mom is probably happy about that too.

In 2026, I'll plan to stay at least $40k below IRMAA. I want no surprises.

The plan would be to do our last big Roth conversion in 2025 tax year. That should be safe, correct?

 

[Gumby]

1. Mine too, but 4 years older. So mid-January 2024
2. 1/1/2024 is the start date on Medicare card I received. But I received a letter from Social Security saying they will take $174.70 (standard Part B charge) out of the check I receive in January (which is actually the payment for December 2023 - payment is a month in arrears).
3. If you are already receiving social security, you do not separately need to apply for Medicare. If not, I believe you apply 3 months in advance.
4. Sadly, I do not know. I have never exceeded the IRMAA threshold, so I never bothered to find out. But, yes, the IRMAA is applied for two tax years prior to the current year.

 

[TheWizard]

The time has come for me to start worrying about IRMAA. We don't make anything close to the MFJ number for IRMAA, but we are doing Roth conversions, so it is easy to fall into the trap. We don't even do big Roth conversions except during years we bunch our charitable contributions.

So the pedantic scenario and question:

1) My birthday is mid January (NOT Jan 1). I turn 65 in 2028. DW is just a bit younger.
2) Medicare will start for me on January 1, 2028. Correct?
3) I can apply for Medicare in late 2027, right?
4) My IRMAA will apply from the 2026 tax return, correct?

I'm nervous because of January. Key is I am not a Jan 1 baby. Mom is probably happy about that too.

In 2026, I'll plan to stay at least $40k below IRMAA. I want no surprises.

The plan would be to do our last big Roth conversion in 2025 tax year. That should be safe, correct?

You can do as you please, but a $40k margin is excessive.
I typically Roth convert to get my MAGI within $2k of the next higher projected IRMAA threshold.

Practice predicting your MAGI for the year in early December the next few years and write down your prediction.
Then when you file your 1040 a few months later, see how close you were...

 

[Car-Guy]

4) My IRMAA will apply from the 2026 tax return, correct?

Correct - 2028 IRMAA will be based on your 2026 return/income that you'll file in 2027.