I just got IMRAA'd

[Souschef]

i just received a letter from SS. It stated I was going to get a1.6% increase due to COL.
However, because of IMRAA, my Part B goes up by 57.80 and Part D goes up by 12.20
The net effect is I will be getting $24 less a month.
However, DW will be impacted more, as her basic SS is less than mine. She will be getting $44 less per month

 

[athena53]

Welcome to the world of the not-so-filthy rich. It's even worse for singles since the thresholds for the various levels of surcharges are cut in half. Most people are blissfully unaware of it till they get hit with it.

 

[RobbieB]

Congratulations on your high income!

 

[W2R]

i just received a letter from SS. It stated I was going to get a1.6% increase due to COL.
However, because of IMRAA, my Part B goes up by 57.80 and Part D goes up by 12.20
The net effect is I will be getting $24 less a month.
However, DW will be impacted more, as her basic SS is less than mine. She will be getting $44 less per month

I got hit by it too, Souschef! I will be getting $38 less each month. In my case it was due to unusually high capital gains income. I am sure those capital gains were more than what I will lose in my 2020 monthly SS deposits due to higher Part B. But still, it is hard to be cheerful about it.

Hopefully all will be back to normal by 2021.

 

[Souschef]

Congratulations on your high income!

What really gripes me is that the 53K of SS benefits pushes me into IMRAA. and I already am paying tax on that money

 

[SecretlyFI]

Welcome to the world of the not-so-filthy rich. It's even worse for singles since the thresholds for the various levels of surcharges are cut in half. Most people are blissfully unaware of it till they get hit with it.

Yes. My widowed, 92 yr old MIL will be getting $82 less a month. Hit with IRMAA due to last December’s VG Wellington cap gains distribution. Adding insult to injury, we had to place her in a $90k a year memory care facility this year.
So life got real expensive real fast. I just keep saying... this is what money is for and why we save all our lives...just in case. At least the facility cost will count as a med expense deduction.

 

[RobbieB]

Hey the country is broke, someones gotta pay.

I swear, here is the only place people whine about making dough.

 

[Car-Guy]

I've been retired for almost 8 years now and I'm still in the 2nd from the top IRMMA bracket... When I was under 65 and had private insurance I got much much better coverage when I paid more. Not so with Medicare.



Call it what you like... IRMMA is simply Medicare's way to means test.

 

[walkinwood]

I'm new to this since I still have 6 years to go to be eligible for medicare, so I went to look at the income threshold.

Income limits are $85K for individuals and $170K for MFJ.

Are these thresholds indexed to inflation?
Edit : Just found the answer at investmentnews.com (Please verify that this is correct)
https://www.investmentnews.com/arti...rcharges-to-be-adjusted-for-inflation-in-2020

For the first time in a decade, the income brackets used to determine Medicare premium surcharges for high-income retirees will be indexed to inflation starting Jan. 1. As a result, some retirees may experience a reduction in their Medicare surcharge costs next year.


Beginning Jan. 1, the income related monthly adjustment amount brackets used to determine high-income surcharges for individuals and married couples will be indexed to the consumer price index based on the 12-month CPI change from September 2018 through August 2019.
In August, inflation increased 1.7% over the previous 12 months, according to the CPI data released last Thursday.
As a result, the income brackets used to determine Medicare surcharges in 2020 will increase by 1.7%, rounded to the nearest $1,000.

 

[audreyh1]

What really gripes me is that the 53K of SS benefits pushes me into IMRAA. and I already am paying tax on that money

SS benefits or the other income that's pushing you into IRMAA? - two ways to look at it.

We'll be paying IRMAA for one starting next year. At most I might be able to drop us a level in the future. I think this is supposed to be in the category of nice problem to have if you really can't reduce your MAGI income ahead of time.

 

[audreyh1]

I'm new to this since I still have 6 years to go to be eligible for medicare, so I went to look at the income threshold.

Income limits are $85K for individuals and $170K for MFJ.

Are these thresholds indexed to inflation?

They are starting next year (2020).

There are multiple income thresholds - several tiers above which you pay even more.

 

[audreyh1]

Yes. My widowed, 92 yr old MIL will be getting $82 less a month. Hit with IRMAA due to last December’s VG Wellington cap gains distribution. Adding insult to injury, we had to place her in a $90k a year memory care facility this year.
So life got real expensive real fast. I just keep saying... this is what money is for and why we save all our lives...just in case. At least the facility cost will count as a med expense deduction.

Hit by IRMAA which doesn't count deductions which is too bad, but other than that the memory care facility costs should lower her income taxes considerably.

 

[Souschef]

And then, when you hit 70 and 1/2, the RMD's jack up your income. But you are right, it is sort of a nice problem to have.

 

[audreyh1]

And then, when you hit 70 and 1/2, the RMD's jack up your income. But you are right, it is sort of a nice problem to have.

Absolutely - that's what we're expecting. We plan to wait until 70 to draw SS, so it will be a double whammy.

I'm doing what I can to make our taxable investments more tax efficient before SS and RMDs start.

But I'm pretty sure we are always going to be paying some level of IRMAA. And we get to pay it for many years without getting any SS to cover it at first. We're just hoping that ultimately SS will cover the various Medicare parts, IRMAA, and extra taxes.

 

[Car-Guy]

And then, when you hit 70 and 1/2, the RMD's jack up your income. But you are right, it is sort of a nice problem to have.

Still doesn't make it fair!

 

[audreyh1]

Still doesn't make it fair!

Fair compared to what?

You remember what your mom or dad told you about life, right?

 

[Ian S]

I got IRMAAed too! I goofed last December and misestimated a Roth conversion. Wound up going over the lowest MAGI level for singles by $100. That results in an IRMAA cost for a year of over $700! Luckily for me, I got married this year and so will file form SSA-44 along with marriage certificate to appeal the IRMAA. Our MAGI for married filing jointly will be well below the lowest IRMAA bracket. And because my new husband is 16 years my junior, when I hit RMD age in a couple of years, those RMDs will be significantly lower than if I had married someone closer to my own age. Life is good

 

[audreyh1]

I myself was reviewing the estimated 2019 income earlier today looking at IRMAAs specifically, and decided that since we pretty much crossed a new threshold I might as well take a few more tax hits hoping it will reduce future taxable income.

Having these discrete steps is the worst thing about it.

Our taxable income didn’t use to be that high. I even thought we’d stay below NIIT thresholds - hah! But since 2013 all hell has broken loose in terms of cap gains distributions.

 

[athena53]

Call it what you like... IRMAA is simply Medicare's way to means test.

And it's collected from those who likely already paid multiples of the average in Medicare payroll taxes over their careers because they were high earners.

 

[nwsteve]

If you are anywhere near IRMMA thresholds, get use to estimating and tracking AGI as a regular part of your annual financial activities. We are getting RMA's now and pretty much guaranteed to cross the first threshold for the rest of our lives. I still have a couple mutual funds with too much LTCG preventing rapid redeployment to an ETF. These mutual funds add an element of uncertainty since forecasting year-end distributions is an inexact exercise at best. Since IRMMA impacts are cliff triggered even $1 will push you over the line.

 

[Sunset]

If you are anywhere near IRMMA thresholds, get use to estimating and tracking AGI as a regular part of your annual financial activities. We are getting RMA's now and pretty much guaranteed to cross the first threshold for the rest of our lives. I still have a couple mutual funds with too much LTCG preventing rapid redeployment to an ETF. These mutual funds add an element of uncertainty since forecasting year-end distributions is an inexact exercise at best. Since IRMMA impacts are cliff triggered even $1 will push you over the line.

I had been whining to DW about these stupid things for years to no effect. Until one year, she phoned me in shock to tell me her statement was $70K distribution! Of course you don't actually get that $$ in your pocket.

 

[Badger]

My wife just received her SS letter telling her about the COL increase while at the same time letting her know the Medicare payments will double. I'm still waiting for my letter with the same info. We have been living on SS and small pensions but have to take RMD which resulted in the increase as well as higher taxes and loss of some other tax benefits when placed in a higher tax bracket. They get you coming and going. When I die and my wife is on her own with my additional IRA money she will really be shelling out even more tax money.


Cheers!

 

[Golden sunsets]

2019 is the year of the tax torpedo for us, as I turned 70.5 this year, thus RMD's start and I deferred taking SS until turning 70 this past January. We will crash through not one but 2 IRMAA thresholds for both DH and I, and start the new payment level on 1/1/2021 as well as jump into the 24% tax bracket for 2019.

We have been anticipating this situation for several years. There is very little if anything we can do about this. We realize this is a first world problem. On a plus note I estimate that we will not enter the next higher tax bracket or IRMAA brackets until one of us becomes a widower, which hopefully won't happen for many years.

 

[KB]

I got the IRMAA letter too; it was the first I had heard of it.

I inherited a nice chunk of money last year which is invested and generating a larger income. I guess this is a good problem to have.

 

[MichaelB]

I try to keep in mind Medicare is heavily subsidized. IRMAA means the subsidy is lower, but it is still there.