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At the risk of red down arrows, enough complaining about IRMAA and writing about strategies to lower or avoid those premiums.
The median income for retirees age 65+ is $47,000 – $55,000 annually.
The median HOUSEHOLD income at all ages is about $84,000
IRMAA premiums start at a single person income of $109,000.
If you are retired and required to pay IRMAA premiums, you are doing quite well. As the saying goes, pay your fair share and be grateful you are in that income category.
If you are retired and paying IRMAA premiums affects you financial security in retirement, you didn’t plan well. 🥵
Call this a rant if you like, but let’s be real.
My 98-year-old aunt, who is a retired schoolteacher and for whom I am POA, had to pay an additional $4883 in 2025 because I sold her house in 2023. She did not complain a bit, since she is unaware of the house sale or IRMAA. I forgot about IRMAA when I sold the house, but it was still the right thing to do. When the house sale pushes you well into IRMAA even after the $250,000 exclusion (for a single person), you have made a bundle.
Same here w my mother. Has little recurring income but her house sale in 2024 hurt. Fortunately only into the first IRMAA up-charge. I also forgot about IRMAA when calculating the gain on the house or I might have been a little more aggressive w the capital improvements calculation. Just a one year hit for an extra $100 or so per/month. She’ll enjoy the big raise in 2027 when IRMAA drops off. 🙂
I get it being a first world issue. I.agree we should be grateful and not let the tax given heartburn. The alternative is an income which is so low as to make retirement more financially difficult. That’s the point I think you’re making. Not all agree based on the comments posted. Starting trouble again Mr. Quinn.
Seems so. I’m pretty sure if I wrote and didn’t do that it would be pretty boring, although the only goal is discussion to learn from.
😘😘 Those are for you and Connie – I don’t want to make her jealous and besides, what would your stories be without her presence?
I pay IRMAA because of RMDs – I don’t need the distribution but am required to take it. I was already retired when IRMAA went into effect, and almost retired when Roth IRAs became available, and would have had to do significant Roth conversions to avoid IRMAA. By the time I figured that out I was taking SS on my ex-husband’s account and would have been looking at a current tax bill instead of future IRMAAs. So yes, I consider IRMAA unfair: The ground rules were changed. (And don’t tell me to do large QCDs – I don’t need the money today, but with no COLA on my pension and a possible SS reduction I may well need it in the future.)
The exception I’ve seen are Mom and Pop who realize a nice gain on their home and, because the exclusion didn’t cover the entire gain, end up on the wrong side of IRMAA. The exception are those folks for whom much of their net worth is tied to the home. They’ll come in the following year and complain their Social Security income went down…
Fourth attempt to comment here 🙁. Some days the website or my phone just doesn’t want to cooperate so I’m just gonna say, thanks, Dick, for your opinion and thanks to everyone who has commented so far. Everyone here has contributed greatly both to my financial knowledge and to my opinions about how to best share what I have. IRMAA and MAGI are two things I’m still trying to educate myself about, as my IRA withdrawals have brought me close to having to pay the increased Medicare premiums. With your articles and comments, plus my own research, I hope that I will get it right. Thanks again and Happy New Year to all.
Linda, if your IRA withdrawals are RMDs (Required Minimum Distributions), you can use enough of those for QCDs (Qualified Charitable Distributions) to bring your MAGI below the first IRMAA bracket. Of course you also get the satisfaction of helping your favorite good causes.
If you’re making the IRA withdrawals sooner than your RMD age, can’t you just scale those back to reduce your income below the IRMAA triggering amount?
Yes, Andrew, I am in the RMD age group but have actually been taking more than RMDs even before required because my income covers only necessities, including a mortgage payment. Thanks to HD advice, I began making QCDs this year rather than itemizing each donation as before (I will still fill out the IRS form for my tax preparer). What you suggest is exactly what I want to do: enjoy the IRA money we saved, give generously, including to family members, but not incur a higher than necessary Medicare premium
Never fear, Social Security will send you a letter in November of the year before any IRMAA premiums go into effect with every amount used in the calculation including how they arrived at your MAGI from your tax forms. Nothing for you to do.
Thanks, Dick. My tax prep person advised me earlier this year not to withdraw an amount from my IRA this year for a desirable but unnecessary home improvement. What I want to do is plan so I know how much I can withdraw for the optionals like travel, home improvements and non-deductible gifts without going too far into IRMAA territory.
I honestly think Quinn trots out a similar posting every few months just to show engagement with his tired rants. Yawn…..
And you have no opinion on the subject?
With each IRMAA premium, I remind myself of the bargain that Medicare is compared to individual health insurance. I pay less now, despite being in a high IRMAA tier, than I did for private insurance in the first two years of retirement without Medicare. Even adding in premiums for supplemental, Medicare Part D, dental, and long term care insurance, my annual costs are still less than I would have had for individual health insurance alone.
This is, I think, very out of character for this forum. The fact is, people like me, who were very successful in our careers, virtually all pay IRRMA. If you have a decent retirement income it is nearly impossible to keep most of it out of your MAGI. And sure, its pocket change, but it reads like sour grapes to tell us to just pay up and be grateful. We earned our retirement incomes, they were not a gift. But as you say, its an opinion piece and everyone is entitled to their own.
Where does sour grapes come into it? Don’t see how earned it or not is relevant. I suspect nearly everyone here earned their retirement income.
Right, I’m not near an IRMMA cliff but I’ll bet no one is jumping up and giving “high fives” because they went over a cliff by a few bucks just because they were good savers. Is it a nuisance tax, yes. Is it a fair tax, I’m not sure. Why the cliff? Why punish good savers? Good savers in retirement = less retirees dependent on government. Imagine down the road they institute a tax on unrealized gains. Would they say we should be grateful because we “did well?”
Not a tax in any way. It is a deductible medical expense because it is an insurance premium.
Technically you’re right, but it functions as a tax.
Saving on taxes legally is an American sport and way of life. The code is so complex, it’s a constant battle.
I think most here see IRMAA as fair. But it can easily sneak up on you and that is when it is an unpleasant surprise.
It is another dynamic to our taxes that needs to be planned for.
Yes. In my case getting very close to that unpleasant surprise due to what would have been a large IRA withdrawal to pay for a desirable but unnecessary home improvement. I still want to do it, but need to be careful about the amount and the timing. I had also cashed in matured bonds without realizing how 30 years of interest would affect my income and taxes. I’m still learning. Nothing seriously bad has happened, and I feel privileged, as many here do, to be in a position to pay taxes.
”In my case getting very close to that unpleasant surprise due to what would have been a large IRA withdrawal to pay for a desirable but unnecessary home improvement. I still want to do it, but need to be careful about the amount and the timing. I had also cashed in matured bonds.”
I have read this is why financial advisors recommend having a fair amount in a brokerage account. Presently I have a fair amount in short term taxable bond account which I will use a significant portion of to turn our deck into a three season porch in two years, and why I will use a HELOC for the balance rather than taking it out of my traditional retirement account.
Another alternative would be a withdrawl from my Roth account, but I consider that untouchable last funds to expend, but hopefully a tax free inheritance for my children.
Also for a couple filing jointly, the first income level that triggers an extra IRMAA charge for Medicare Part B & D in 2026 starts when your combined income is above $218,000 up to $274,000, using your 2024 tax return.
I have posted before that only on a few occasions at the end of working years did our COMBINED earnings exceed that of a SINGLE taxpayer earnings in retirement who is required to pay IRMAA. We would be thrilled to have income exceeding $200K IN RETIREMENT, and would gladly pay IRMAA.
Without disagreeing with anything you’ve said here about IRMAA, also acknowledge that the way it’s applied – with a two year look back and the cliffs – is ridiculous.
How could it possibly use a one year look back that isn’t understood until 4/15 or later?
Good point. One way would be to require beneficiaries to estimate their current year income. I understand the Affordable Care Act marketplace works like this. Not perfect as it would likely require some reconciliation.
Perhaps more importantly, if there were a graduated scale rather than a cliff, then the two year look back wouldn’t be such a problem.
I think it is a matter of practical administration rather than policy. It would be better if it were current though.
This site was created to share useful information regarding financial issues and has been very useful for years. Articles like this, and many others lately, provide zero advice. Some people are treating HD as if it is their “personal” blog. It has become littered with useless opinion pieces. Please enlighten me how this article provides useful financial advice. Thanks.
I did not know IRMAA can be used as a deductible medical expense until I read one of Dick’s previous posts.
I have written for HD since April 2018 and many articles of mine and others were related to personal experiences with money-spending it, saving it, making mistakes with it. HD was never, in my opinion, just about “financial advice” It was about financial journeys.
IMO this piece relates to much financial planning and retirement planning, but as you say it is opinion. Sometimes opinion that generated new thinking can be other than useless-I hope.
I believe “financial journey” were words used by Jonathan in a post asking for new writers to come forward. I responded with my first article about my journey, it was well received, and encouraged me to keep writing. I hope some of my off-the-beaten-path articles helped a person or two.
As for the rehashing of certain subjects, perhaps we have new readers who might benefit from fresh discussions of older topics.
At any rate, if I don’t like a post, I can just ignore it.
Thank you, Dick. This is the truth, I agree with you. Chris
The numbers you included in your post should illustrate for all that those who have to pay the extra IRMAA amount are financially in a position to do so without complaint!
IRMAA is a bit like the 37% tax bracket; I wish I made enough money to pay both. However, it would be dumb for someone to let themselves slip over the cliff due to Roth conversions or by using the wrong filing status.
I guess we could say it is foolish to not take advantage of any legal way to avoid taxes and that’s true for billionaires and mere mortals. But the fact remains we still need to pay for everything we want which eventually must lead to higher taxes for everyone.
It may be a rant, but it states a truth: paying IRMAA is a sign of success and affluence.
It’s okay to try to avoid the next IRMAA tier, eg. $1000 less of Roth conversion to avoid a cliff.