When are 2022/2020 IRMAA tables published?

[Midpack]

I’ve just added consideration of IRMAA to my tax planning, but I can’t find the 2022 (2020 income) table! Am I just missing it? If not, it seems a little unfair that we don’t have the MAGI thresholds for 2020 income at least before year end to have a chance to keep income below the applicable threshold. What little I’ve read suggests the thresholds aren’t guaranteed to go up with inflation or even stay the same one year to the next - they could even go down?

 

[fosterscik]

According to https://thefinancebuff.com/medicare-irmaa-income-brackets.html

It’s too early to project the income brackets for 2022 coverage. As of December 2020, we only have three data points out of 12 to calculate the brackets for 2022. If inflation in the upcoming months is negative enough, the brackets can go down. I don’t think it’s likely but it’s always a possibility. If I must guess, the range for the first tier will be between $88,000/$176,000 (no change from 2021) and $90,000/$180,000, with the most likely scenario in the middle, i.e. $89,000/$178,000.

It seems the data used to set IRMAA levels are not yet available. I admit its a problem for planning but I'll use the 2021 data which is likely to be conservative.
That quote implies data won't be available until 9 months have elapsed in 2021.

 

[audreyh1]

I think you have to use current year levels until Nov/Dec when the 2022 levels are published.

They can’t be published farther ahead as they are dependent on inflation which can’t be forecast.

The thresholds might also depend on Medicare funding as each threshold is paying some fixed% of their Medicare costs, and those can’t be determined until late in the prior year.

 

[Midpack]

I think you have to use current year levels until Nov/Dec when the 2022 levels are published.

They can’t be published farther ahead as they are dependent on inflation which can’t be forecast.

The thresholds might also depend on Medicare funding as each threshold is paying some fixed% of their Medicare costs, and those can’t be determined until late in the prior year.

So it's as I thought, you can't plan to stay inside IRMAA thresholds as you won't know until the determining year is over - e.g. the 2022 IRMAA thresholds aren't published until Nov/Dec 2021, long after our 2020 MAGI is cast in stone. Seems unfair, but that's life. I'm just surprised as most tax tables, deductions etc. are published before the end of that year so you can at least plan.

 

[JDARNELL]

This has been a projection concern of mine as well. Until last week as I was getting some CFP advice which I try and do every 4 or 5 years. Anyway after our discussion it’s like a lightbulb came on. He said JDARNELL it’s only a marginal change of $XX. Your jumping over mouse hills. I was like Duh as I have an underlying challenge I’d paying more that I have to. Yep it’s a mental block.

 

[audreyh1]

So it's as I thought, you can't plan to stay inside IRMAA thresholds as you won't know until the determining year is over - e.g. the 2022 IRMAA thresholds aren't published until Nov/Dec 2021, long after our 2020 MAGI is cast in stone. Seems unfair, but that's life. I'm just surprised as most tax tables, deductions etc. are published before the end of that year so you can at least plan.

Fairness - well the problem is that they are based on income 2 years earlier due to the delays in tax filing. It’s not set up to use current year income numbers because they are unknown, and The IRS won’t know prior year income numbers either until taxes are filed during the current year, so they are stuck with a 2 year lookback.

Sounds like by mid November, IRMAA thresholds for the next year are announced.

Since you can’t know 2023 thresholds until Nov 2022, there is no way to know exactly what it will be during 2021 even though it’s the 2021 income that determines your 2023 IRMAA.

Well, you can plan based on the 2021 IRMAA thresholds, and then late in 2021, adjust if desired based on the newly announced 2022 thresholds. With cliffs like this you’ve gotta give yourself a little wiggle room anyway.

The year to year IRMAA threshold changes are going to be small, and unlikely to go down since a full year of deflation is so rare.

To correct an earlier post - the IRMAA brackets (what I’ve been calling thresholds) are only inflation indexed AFAIK. And it might be through Sept CPI of the prior year (annual Sept to Sept). It’s the amounts (base plus IRMAA) that are based on Medicare funding as to how much each bracket must cover including the base amount everyone pays.

 

[nwsteve]

Here is a link discussing IRMMA setting mechanics as well 2022 values
https://thefinancebuff.com/medicare-irmaa-income-brackets.html

 

[Midpack]

Here is a link discussing IRMMA setting mechanics as well 2022 values
https://thefinancebuff.com/medicare-irmaa-income-brackets.html

Thanks. That was the only decent article I found too.

 

[chasrome]

These are excellent comments. I have been struggling with IRMAA since it was introduced during the Bush Administration. The difficulty, of course is predicting the levels two years ahead. I understand why this is so and have no problem with the mechanics. The penalty for ever going over each tier limit (until, if and when, you get to the top but few of us will face that happy situation) is truly drastic when considering the marginal effect on your reported earnings. I manage my IRA withdrawals to get as close to the tier limits as I dare but now that the tiers are being increased every year there is always going to be a miss where I get to declare less earnings than I might have wished. Still it is far better to underestimate than ever to overestimate. It will be tough if the tiers are ever reduced from one year to another forcing a miss.

There continue to be efforts in congress and by interested groups to make this even more onerous. The last time that a run was made on it we were saved by no one other than Barack Obama himself. The most dangerous folk in Washington are the technocrats. It behooves all of us to stay on top of this.

 

[Car-Guy]

Seems like this was recently discussed in another thread but this is a bit of a different twist... Anyway, a lot of unfairness with IRMMA IMO. But like so many things, they make the rules, we just have to live/play by them no matter how unfair they are!



In my case I am currently in the second tier from the top based on my 2019 return. However though tax planning, I was able to get my 2020 taxes under the bottom IRMMA tier. That of course will determine my 2022 medicare payments. I actually had to adjust some of my activities (read - lifestyle change) to get under the limits... I worked it all year, but my final "adjustment" was made in a tIRA withdrawal in late December. Cut it as close as I could... (made it by ~2k) Always concerned with them changing the rules/rates which makes it pretty hard to do a lot of planning.

 

[TheWizard]

I'm in the middle of the IRMAA tiers and now make the decision in early December on how much to Roth convert based on the present tier levels along with TFB's projections.
I'm also assuming the tiers will never decrease in value even if inflation is negative for a year. This assumption is based on how SS COLA works and may not be correct for IRMAA...

 

[friar1610]

I did Roth conversions for the 2020 tax year for the first time and got dangerously close to triggering an IRMAA surcharge but ended up OK. Yesterday I was playing with my spreadsheet trying to figure out how to:
1. Do another Roth conversion in tax year 2021 so our two kids can each inherit a roughly equal Roth IRA while
2. Rebalancing out of stocks in taxable to get my AA back to where I want it without incurring more than 1 additional IRMAA tier.

Whatever I do will be a suboptimal compromise. It’s crazy that trying make sensible adjustments to one’s portfolio composition causes an increase in medical costs. But I suppose that falls under First World problems and I’m thankful nobody’s dropping bombs on or shooting rockets at us.

 

[chasrome]

Yet.
If you cans still say that in December, I will help celebrate.

 

[LizaBBBB]

Your IRMAA question

You probably already know, but IRMAA is a chalenge. Howver, I find a free column called the Finance Buff most helpful. In that column, the writer says no IRMAA for singe if MAGI below $91000 (182000 for married). IRMAA applies to both Part B Medicare and Part D. Not yet announced for 2022. Keep an eye on Social Security's announcement of the 2022 costs for Part B/D, coming, eh, soon.

 

[Gumby]

Look here:

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

 

[Midpack]

Look here:

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

Thanks, I was sweating 2022 (2020 MAGI) so if those are right (and every reason to believe they are), I dodged the next highest MFJ bracket. Would have been a painful $ mistake.

 

[thefinancebuff]

Announced yesterday. Projections matched official numbers 100%.

https://www.cms.gov/newsroom/fact-s...care-part-d-income-related-monthly-adjustment

 

[Gumby]

I was confident that they would.

 

[JDARNELL]

So what about 2023 Income Numbers based on 2021 income? When do you think we will see them?

 

[Gumby]

Next November, although you can make a pretty good prediction in October once the inflation rate through September is known.

 

[JDARNELL]

Next November, although you can make a pretty good prediction in October once the inflation rate through September is known.

So the reality of it is people don’t know the income cutoff limit that will dictate 2 years from now until one year from now? If this is correct how do people make sure they fill up or stay under a IRMAA threshold?

 

[Gumby]

My plan is to use this year's limits for this year's withdrawals. In my observation the IRMAA limits always go up, so if you stick with this year, you'll have a safety margin. With cliff-type things like IRMAA or ACA, I'll give up a few dollars of tax maximization to ensure I don't go over the limit.

 

[JDARNELL]

My plan is to use this year's limits for this year's withdrawals. In my observation the IRMAA limits always go up, so if you stick with this year, you'll have a safety margin. With cliff-type things like IRMAA or ACA, I'll give up a few dollars of tax maximization to ensure I don't go over the limit.

Agree. So you are gonna use the new 2022 numbers? I have about made the decision to purposely go up a level this year but not totally sold yet. It’s like I am jumping over mouse hills.

 

[Midpack]

So the reality of it is people don’t know the income cutoff limit that will dictate 2 years from now until one year from now? If this is correct how do people make sure they fill up or stay under a IRMAA threshold?

You can’t know absolutely, so I fill to the prior year 1.4 limit. In 2021 I will bring our MAGI in at just under $228K (the just announced 2020-2022 limit), even though the 2021-2023 limit is projected at $238K? Getting it wrong is pretty costly…

 

[Gumby]

Agree. So you are gonna use the new 2022 numbers? I have about made the decision to purposely go up a level this year but not totally sold yet. It’s like I am jumping over mouse hills.

Sorry I was unclear. I meant that when I Roth convert in 2022, I will use the newly announced 2022 IRMAA numbers, which actually are for 2020 income because I know that the 2024 IRMAA number (and the one that will affect me, since I turn 65 in 2024) will likely be higher by two inflation adjustments.