IRMAA costs

[raaizin]

Question on IRMA costs .I am 63 and will be 64 in May 2025. It is my understanding my IRMA costs would be based on this years income. The 2025 income limits are 212k-266k for a married couple so I would imagine 2026 would at least be at the same levels. Currently we are pushing the upper limit of this bracket. If I were to go to the next higher bracket for one year then revert back to the lowered bracket will the IRMA rate be reset to the lower bracket or will I be in the higher bracket permanently.

 

[athena53]

It resets every year.

 

[Gumby]

IRMAA income thresholds are inflation adjusted every year. Where you stand in 2026 with respect to those levels will be determined by your MAGI from tax year 2024 (ie - the tax return you will file this coming April). If your income subsequently goes down and you slip below one of the thresholds, then your IRMAA amount will be adjusted downwards for that year. (or, I suppose, your MAGI could stay the same, but the threshold amount moves up due to inflation adjustment).

 

[raaizin]

Thanks!

 

[Car-Guy]

This link should help you understand IRMAA a bit better:

2025 2026 2027 Medicare Part B IRMAA Premium MAGI Brackets

You pay higher Medicare Part B and Part D premiums if your income exceeds certain thresholds. Here are the IRMAA income brackets for 2024, 2025, and 2026.

thefinancebuff.com

 

[Chuckanut]

One winner of an issue for any elected representative would be to drop the cliff like steps of IRMAA and instead figure out the IRMAA cost using gently rising brackets like the income tax.

 

[dak2018]

One winner of an issue for any elected representative would be to drop the cliff like steps of IRMAA and instead figure out the IRMAA cost using gently rising brackets like the income tax.

Higher income people are a small portion of the population, so doing things to benefit them does not make it a winning issue - except as regards to fundraising. Lower income people ( the vast majority of the population) are not affected by IRMAA. (About 7% of Medicare recipients are affected by IRMAA.)

 

[Car-Guy]

Higher income people are a small portion of the population, so doing things to benefit them does not make it a winning issue - except as regards to fundraising. Lower income people ( the vast majority of the population) are not affected by IRMAA. (About 7% of Medicare recipients are affected by IRMAA.)

It would be interesting to see what % of us (ER forum members on Medicare) are affected by IRMAA... Probably more than 7%. Maybe I'll start a poll, or not.

 

[Chuckanut]

Higher income people are a small portion of the population, so doing things to benefit them does not make it a winning issue - except as regards to fundraising.

And they vote!

WEP and GPO affect only a small part of the population, yet they are on the chopping block. The squeaky wheel gets the grease.

 

[mf15]

I am a small portion of the population. Cost me about 14K this year for the wife and me for medicare,be done in 1 1/2 months. Sold my rental in 2022. Just an average boomer, did not know this was going to happen 35 or so years ago. IRMAA is quite a mean lady.
Oldmike

 

[Car-Guy]

I am a small portion of the population. Cost me about 14K this year for the wife and me for medicare,be done in 1 1/2 months. Sold my rental in 2022. Just an average boomer, did not know this was going to happen 35 or so years ago. IRMAA is quite a mean lady.
Oldmike

Yes she is... Just think, if IRMAA is hitting you now, you probably paid much more than the average bear in Medicare withholding taxes during your working years too. And now that you are retired and getting Medicare, they are charging you more than the average bear with the IRMAA tax. All for the exact same level of medical insurance/coverage for those who paid far less.

The way I look at, since I have no choice, that is my charitable contribution to rest of the country.

 

[MichaelB]

Yes she is... Just think, if IRMAA is hitting you now, you probably paid much more than the average bear in Medicare withholding taxes during your working years too. And now that you are retired and getting Medicare, they are charging you more than the average bear with the IRMAA tax. All for the exact same level of medical insurance/coverage for those who paid far less.

The way I look at, since I have no choice, that is my charitable contribution to rest of the country.

Actually, the payroll tax is for Medicare Part A, which we do not pay for as users, so not being charged “more again”. IRMAA applies to Medicare parts B and D. Yes, we are paying more, and It’s still subsidized.

 

[Car-Guy]

Actually, the payroll tax is for Medicare Part A, which we do not pay for as users, so not being charged “more again”. IRMAA applies to Medicare parts B and D. Yes, we are paying more, and It’s still subsidized.

True, but, but, but, many of us paid a lot more for part A when we were working. There's no limit/cap on those deductions. And now that we are retired we are paying more for B and D because of IRMAA and there is basically no limit/cap, "unless you make the top tier", then you probably don't care about IRMAA with that level of income.

 

[zangbao]

The way I look at, since I have no choice, that is my charitable contribution to rest of the country.

Yea, if I'm going to be making that much, I have enough to pay for it. I'll just consider as a charity.

 

[marko]

(About 7% of Medicare recipients are affected by IRMAA.)

Been on the second level of IRMAA since the day I took Medicare 6 years ago. Stopped thinking about it. Actually, never really knew I was being IRMAA'D or understood it until I learned about it in this forum.

I try to think about taxes/income just one day a year: April 14, when I write the check.

 

[youbet]

True, but, but, but, many of us paid a lot more for part A when we were working. There's no limit/cap on those deductions. And now that we are retired we are paying more for B and D because of IRMAA and there is basically no limit/cap, "unless you make the top tier", then you probably don't care about IRMAA with that level of income.

Actually the level where you probably don’t care about IRMAA is the level you’re at Car-Guy.

 

[AbbA]

We are more than a few years to MC, but I'm trying to wrap my head around this IRMAA thingy and planning for it.
If I understand it correctly you cannot predict in advance whether you will be part of the IRMAA crowd or not...?
Let's say a couple reports MAGI of $220,001 when they file their 1040 for 2024. However, they will not know if they will need to pay more for MC until SSA announces 2026 IRMAA brackets sometime late in 2025. Is this correct?

Speaking of IRMAA brackets being inflation adjusted like regular tax brackets, I'm wondering how the math will shake out in a few years when they reach $250k level when the NIIT 3.8% gets into the mix and which is not inflation adjusted. Any thoughts?

 

[Outdoor1]

Question on IRMA costs .I am 63 and will be 64 in May 2025. It is my understanding my IRMA costs would be based on this years income. The 2025 income limits are 212k-266k for a married couple so I would imagine 2026 would at least be at the same levels. Currently we are pushing the upper limit of this bracket. If I were to go to the next higher bracket for one year then revert back to the lowered bracket will the IRMA rate be reset to the lower bracket or will I be in the higher bracket permanently.

Are you going to retire a before or shortly after 65? If so, you can do what I did and file an appeal. They wanted to hit me with about $450 a month in Irmaa surcharges, but accepted my appeal based on”work stoppage”.

 

[Gumby]

We are more than a few years to MC, but I'm trying to wrap my head around this IRMAA thingy and planning for it.
If I understand it correctly you cannot predict in advance whether you will be part of the IRMAA crowd or not...?
Let's say a couple reports MAGI of $220,001 when they file their 1040 for 2024. However, they will not know if they will need to pay more for MC until SSA announces 2026 IRMAA brackets sometime late in 2025. Is this correct?

Speaking of IRMAA brackets being inflation adjusted like regular tax brackets, I'm wondering how the math will shake out in a few years when they reach $250k level when the NIIT 3.8% gets into the mix and which is not inflation adjusted. Any thoughts?

Yes. The IRMAA thresholds for 2025 were determined in October 2024. The latest information available as to your MAGI, which is what determines whether will be over the threshold is the information in the tax return you filed this past April (i.e. - your 2023 income). It will be the same process next year and the year after that - it is always the MAGI from two years prior that determines if you must pay IRMAA. It can be no other way.

In my opinion, too many people make a mountain out of a molehill about this two year lag. I have known for almost two months what the 2025 IRMAA levels will be. Since we very rarely have deflation in this country, I can assume that the 2026 levels will be higher after they are inflation adjusted. So if I take steps to control my MAGI this year (2024) and keep it under the 2025 IRMAA threshold levels, I will almost certainly be under the 2026 IRMAA threshold levels when they are finalized next October. Will I leave a few thousand dollars of potential Roth conversion unused? Yes, but missing the threshold by a little under beats taking the chance of going over. In the grand scheme of things, it's peanuts.

As the years progress, NIIT will affect more and more people, but it will only increase their taxes, it won't do anything to the IRMAA brackets.

 

[euro]

Yes. The IRMAA thresholds for 2025 were determined in October 2024. The latest information available as to your MAGI, which is what determines whether will be over the threshold is the information in the tax return you filed this past April (i.e. - your 2023 income). It will be the same process next year and the year after that - it is always the MAGI from two years prior that determines if you must pay IRMAA. It can be no other way.

In my opinion, too many people make a mountain out of a molehill about this two year lag. I have known for almost two months what the 2025 IRMAA levels will be. Since we very rarely have deflation in this country, I can assume that the 2026 levels will be higher after they are inflation adjusted. So if I take steps to control my MAGI this year (2024) and keep it under the 2025 levels, I will almost certainly be under the 2026 levels when they are finalized next October. Will I leave a few thousand dollars of potential Roth conversion unused? Yes, but missing the threshold by a little under beats taking the chance of going over. In the grand scheme of things, it's peanuts.

As the years progress, NIIT will affect more and more people, but it will only increase their taxes, it won't do anything to the IRMAA brackets.

Completely agree with all points!

 

[davidfin]

Higher income people are a small portion of the population, so doing things to benefit them does not make it a winning issue - except as regards to fundraising. Lower income people ( the vast majority of the population) are not affected by IRMAA. (About 7% of Medicare recipients are affected by IRMAA.)

As long as congress people are coin operated the small number of super rich will rule the day.

 

[jet757f]

I'm still paying and we are not rich. I retired March 2023. It takes 2 yrs of tax returns before it goes away. I might try to waiver this year.

 

[marko]

As the years progress, NIIT will affect more and more people, but it will only increase their taxes, it won't do anything to the IRMAA brackets.

But an increase in taxes will drive increased IRA withdrawals leading to an entry into a higher IRMAA bracket, leading to increased IRA withdrawals, leading too.......

 

[Safe Harbour]

Just watch out for ROTH conversions. They can bite you in a hurry.

 

[Car-Guy]

I'm still paying and we are not rich. I retired March 2023. It takes 2 yrs of tax returns before it goes away. I might try to waiver this year.

Why does it take two years? The IRMAA tax penalty "looks back" at your tax return from two years ago, but it only penalizes you for one year per tax return.