2024 2025 2026 Medicare Part B IRMAA Premium MAGI Brackets

Comments

1. Diane B says

   December 7, 2024 at 11:47 am

   Please respect Harry Sit’s incredibly valuable contribution to our knowledge about IRMAA and closely related topics, and move your political opinions to another website. By posting them here, you will discourage many of Harry’s grateful readers who need his wisdom but resent being forced to weed through off-topic comments to get to “the good stuff.” Harry deserves much better than that.

   Reply

   • Teresa Durden says

     December 7, 2024 at 12:19 pm

     I totally agree!

   • Bev L says

     December 7, 2024 at 5:30 pm

     Is it safe to use the IRMAA income tiers from 2025 as a safeguard for 2026 IRMAA limits?
     I want to stay in the 2.0 tier. MFJ income was $334,000 for that tier in2023 and projected to be $338,000 for 2024 income. Comments appreciated.

   • Harry Sit says

     December 7, 2024 at 6:02 pm

     It’s safe to use the 2025 tiers for 2026. The current estimate of $338,000 is also quite safe.

2. Mike says

   December 7, 2024 at 12:51 pm

   I find myself at times caught up in off topic commenting and agree with the need to temper OT comments.

   Reply

3. Terry says

   December 7, 2024 at 5:43 pm

   Harry, When will you be putting out your first estimate of 2027 IRMAA based on 2025 income? Thanks for all your work on this. I am extremely glad that I found your site.

   Reply

   • Harry Sit says

     December 7, 2024 at 6:11 pm

     I’ll start covering 2027 based on 2025 income on January 15.

4. steve says

   December 8, 2024 at 10:58 am

   Thanks for this great resource. In the past I’ve been making a guesstimate, but with these “tripwire” IIRMA brackets that is quite hazardous.

   Reply

5. Jeff Enders says

   December 8, 2024 at 6:40 pm

   This article may make for a great discussion on the value of Roth Conversions… any math gurus here willing to state an opinion?

   https://www.financialplanningassociation.org/learning/publications/journal/SEP24-net-present-value-analysis-roth-conversions-OPEN

   appears the basic premise is that unless you expect tax rates go up during your lifetime and / or your heirs are expected to be in a higher tax bracket than you are during the 10 years they have to liquidate the inherited IRA, Roths conversions may not be an effective option….

   I am already of the belief that if you are going to consume your Trad IRA during your lifetime – either by spending it or donating it, then Roth Conversions don’t make a lot of sense… and that is 77% of taxpayers who have a Trad IRA.

   Anyone have a thought and can you shoot any holes in the author’s assumptions?

   Reply

   • Gary says

     December 9, 2024 at 7:00 am

     Jeff, love the article for being a different way of looking at the problem. However, It is difficult to generalize the article’s conclusions for personal use. Some examples:
     1) Starting Situations – we all come with varying ages, income levels, income streams, tax returns, asset allocations, taxable/tax deferred/Roth accounts, etc. We all need to model our own situation before starting to chart any financial strategy.
     2) Taxes not Tax Rates – I am seeing more folks are alluding to not just tax rates but to more general tax considerations in Roth analysis. IRMAA penalties, social security taxation, dividend rates, asset allocations over time, etc. are also needed.
     3) Mortality Assumptions – Wife and I model two extreme scenarios: jointly living to age 100 as well as one spouse dying next year. The article mostly relies on fixed mortality assumptions minimizing mortality risk considerations.
     4) Medical Care Expenses – Future, potentially large, medical expenses have both timing and cost risk, but also might be tax deductible. Thus, they can offset some future RMDs and lower effective taxes.
     So great article, but lots of detailed work to get a clear financial picture for yourself. And even then, all models seem to point to ROTH decisions as being decision making under great uncertainty. Good Luck Everyone!

   • Nancy Memmel says

     December 9, 2024 at 11:57 am

     Jeff;
     Interesting article.
     I agree with you that for someone intending to consume their t-IRA over their lifetime, conversions could be a high effort way to merely break even, or worse, or a high cost way to donate to charity. The initial attraction of the Roth was in the future tax flexibility it confers. Then the stretch feature of IRAs was eliminated and that change boosted it’s allure.
     The article does a first principal analysis of how long a current tax hit will take to be bested by future tax advantages, assuming a lot of things that have to be assumed to make projections. I don’t see any holes in their assumptions; we have to make decisions and take our chances in this as in the rest of life.
     If you are looking at the specifics of your own situation, you probably have a better than 50/50 chance of being right about your future situation ( but not 100%, surely) as for income and maybe mortality, especially if one of a couple has a current diagnosis.
     While I don’t know future rates, I doubt that we’ll go from a progressive tax structure to, say, a flat tax any time soon.
     Looking at the national debt, I would surmise that while tax rates might go down in certain windows of time the government is going to have to raise funds, by hook or by crook.
     A VAT-like tax could negate income tax advantages of conversion, (but for a proposal in the recent past that we have a VAT-like tax ALONG WITH the current income tax for a period of 7 years, at which time Congress would decide which one is better and end the other… Sure they would…)
     On the other hand, if I converted and subsequent rates were permanently lower I’d still have the solace of lower ongoing rates. I guess I could then agonize over how much more we would have had if we hadn’t converted , but if the changes happen when the original decision is in the rear view mirror, I probably wouldn’t.

   • RobI says

     December 9, 2024 at 12:42 pm

     Good article and useful in depth financial calculations which look sound. I’m inclined to follow their advice and not convert. However there is the non-financial factor of creating a simpler future financial life for my spouse so she does not hit higher IRMAA single filer breakpoints if/when that situation arises. I’m curious if others have views on that.

     The footnotes and references also provided some of the best insights.

     1. The companion paper by the same author entitled “IRMAA – Resistance is Futile” is directed at answering the question of ROTH conversions vs IRMAA using similar NPV methods. Paper can be found here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4700784.

     2. Note 12 indicates that the possible impact of Inheritance/Estate Taxes both Federal (but also state level taxes with lower thresholds of estate value) were not considered. This factor may matter to heirs as much as income taxes in some states.

   • Nancy Memmel says

     December 10, 2024 at 11:44 am

     Robl;
     The abstract of the IRMAA-now -or- later paper is available, but the paper itself is not openable or downloadable ( at least not by me..)
     At the point that you retire (or cut hours or have another Life Changing Event as enumerated by the SSA) there is a possibility of reducing IRMAA based on your 2-years -go income because of the event.
     I assume the paper didn’t consider that as it would be kind of a one -off where all the stars must align to make it a go, but it could remove some IRMAA cost if planned for.
     For example, if you are doing a glide into full retirement over a number of years, progressively reducing wage income, I think you could file multiple reconsiderations based on declining wages year over year. We haven’t done this, so there maybe a gotcha limiting the reconsideration requests, but it appears to merely depend on the IRMAA MAGI being lower than 2 years prior and the fact that income due to the parameter sited in the request ( reduced wages, ending work, pension collapsing, etc) in fact decreases.

   • Liftlock says

     December 15, 2024 at 11:27 pm

     Jeff Enders:
     Thanks for the link to the article which uses a discounted cash flow analysis to evaluate Roth IRA Conversions. I agree with many of the author’s conclusions, especially about the potential risk of making incorrect assumptions about future tax conditions. The author appears to suggest avoiding that risk unless the breakeven period the discounted cash flow is compelling. I argue that Roth IRA conversions can also make sense as way to hedge the risk of there being less favorable future financial conditions, even if the cash flow break even time is not compelling. There is simply no way to know ahead of time what future financial conditions will be.
     The authors analysis appears to focus on the cash flow statement without considering the impact of Roth IRA conversions on the taxpayer’s balance sheet. It is my observation that Roth IRA conversions can appear to be unattractive unless the impact on the taxpayers balance sheet is also considered.
     The popular IRA speaker Ed Slot makes the point that taxpayers should consider their T-IRA to be a Jointly held account – with Uncle Sam being the joint account owner. The pre-tax value of T-IRA can be shown as an asset on the taxpayer’s balance sheet. The taxpayer’s accrued tax obligation for income taxes owed upon subsequent distribution of the T-IRA can also be shown as a liability on the balance sheet. The difference between the two values reflects the after-tax value of the T-IRA. When a Roth IRA conversion takes place there is direct reduction in the pre-tax value of the T-IRA on the balance sheet, along with a corresponding reduction of the taxpayer’s accrued income tax obligation, assuming taxes are paid. There is also an increase in the after-tax value of the Roth IRA. I did not see the impact of these changes addressed in the author’s discounted cash flow analysis.
     One challenge in evaluating the cost benefit of Roth IRA Conversions lies in estimating the taxpayer’s accrued income tax obligation on the un-distributed pre-tax value of their T-IRA. A taxpayer needs to consider when T-IRA funds are likely to be withdrawn based on need or as required by law, how much tax will be owed, and who will pay the taxes (T-IRA owner, surviving spouse, or their other heirs.) As the author points out this can depend on a seemingly endless variety of factors: What tax rates will apply when funds are eventually distributed as required by current law? Might funds be withdrawn when the market value of the T-IRA assets are down potentially lowering the effective income tax rate on the distribution? Might T-IRA funds be withdrawn at a reduced tax cost if they are used to pay for large tax-deductible health care costs? How long might a surviving spouse pay income taxes at higher single rates? Will heirs decide to retire earlier than planned if they are the beneficiary of a large T-IRA that must be distributed within 10 years? All of these factors involve making judgements about uncertain future conditions. So one potential benefit of doing Roth IRA conversion is to provide an informed hedge or bet regarding probable or possible future financial conditions.
     I developed a Roth Conversion Analyzer Excel spreadsheet for my use in evaluating the potential cost benefit of doing lump sum Roth IRA Conversions. My spreadsheet considers the impact on the balance sheet as described above. It does not use a discounted cash flow analysis. It simply calculates and compares the annual future value of holding a lump sum in a T-IRA versus distributing that same lump sum to a Roth IRA, based on user controllable assumptions such as tax rates and investment returns.
     I have read internet posts suggesting that Roth IRA conversions in the 24 % bracket or higher are not a good idea. I developed my spreadsheet to help me evaluate whether that is sound advice. Using my spreadsheet I conclude that Roth IRA conversions can provide a benefit if tax rate paid for converting a lump sum to a Roth IRA is not greater than the tax rates that would apply if that lump were retained in a T-IRA and distributed at a future date. There appears to be clear benefits for doing Roth IRA conversions when the conversion tax rate is lower than the long tax rate that would apply if funds are retained in a T-IRA and distributed at at future date. The cost benefit of doing Roth IRA Conversions appears to be negative when the conversion tax rate is higher than the taxpayers long term accrued tax rate obligation on their T-IRA. Interestingly, Roth Conversions at tax rates that are not higher or lower than long term future tax rates appear to be economically neutral. This allows a taxpayer to move funds from T-IRA to a Roth IRA without a negative tax cost, and can provide taxpayers with a flexible source of after-tax Roth IRA funds to consume without incurring an additional tax liability or causing a spike in marginal tax rates when funds are withdrawn. Roth IRA conversion will appear to be favorable if the expected investment returns for a Roth IRA are greater than the T-IRA. Compounding of higher investment returns for Roth IRAs will enhance the benefits of Roth IRA conversions over time.
     Here is a link to my Roth IRA Conversion Analyzer:
     https://1drv.ms/x/c/6a10efb2d76e24d2/EUPcdSXKFnVMitUiHcRVUtEB3zDBJR9-wI21l52tHy6fnQ?e=XKcK7p
     I have also developed an Excel spreadsheet which calculates the tax rates for IRMAA surcharges as a percentage of the income within each IRMAA bracket. I did this for use in my Roth IRA conversion analyzer. The tax rates shown in the spreadsheet assume that each IRMAA bracket is filled with income. Taxpayers may not fill an IRMAA bracket with income if they are managing income to be a safe amount below a target bracket ceiling. So taxpayer rates for any target IRMAA bracket may be a bit higher than what is calculated in the spreadsheet. If a taxpayer only fills 50% of a bracket with income, the tax rates will be double the values calculated by the spreadsheet .
     Here is a link to my IRMAA Tax Rates Excel File:
     https://1drv.ms/x/c/6a10efb2d76e24d2/EcaElKA1kn9MkGXVZdwU8v4BuuJmp4UR6GoqD1R7QHKN8A?e=cXnYMy
     Comments invited and are especially welcome if one discovers spreadsheet logic flaws or calculation errors.

   • RobI says

     December 16, 2024 at 3:07 pm

     Liftlock
     What a holiday gift of your Roth IRA Conversion Analyzer spreadsheet. Very easy to follow. Thanks so much.

     I had to work around one issue in that cells G43 and G44 were both locked while other input cells were not. Unprotecting the workbook fixed it.

     I also used your worksheet as a template to help model a few other scenarios.
     1. I added future annual taxable Trad IRA withdrawals from age 73 to simulate RMD’s in both C1 and C2 cases. I didn’t try to be too precise about exact annual RM , instead using rounded $ values per year with steps every 10 years. It still it helped me make a good estimate of likely residual tax accrual being left to heirs.
     2. A second modification was to show the impact of repeating the fixed Roth conversion over say a 10 year period and seeing its impact on residual balances and tax accrual.

     What this clearly confirmed was the indirect benefits of converting from a Trad IRA (which in my case is weighted towards bonds and dividend payouts), to a Roth IRA (invested in stock funds with capital gains). This increase, due to higher rates of return, was a big win for my total portfolio balance, while also reducing tax liabilities for heirs. This is not uniquely a Roth conversion issue, but investment mix differences across investment types can matter a lot in this planning.

   • LIftlock says

     December 16, 2024 at 3:29 pm

     Robl,
     Thanks for catching my spreadsheet locking error. I unlocked cells G43 and G44.

6. The Wizard says

   December 9, 2024 at 12:47 pm

   McQ, the author of that paper, is well known on the BH forum.
   One goal of Roth converting is to develop a flexible pile of free money for infrequent large expenses.

   Roth conversion is not a binary choice; neither 0% nor 100% is the right answer.
   The right answer is closer to what I did while defending SS to age 70: levelizing your AGI with an inflation adjustment each year.

   This means Roth converting a sum approximately equal to your age 70 SS + your projected RMD while still in your 60s.
   I’m 74 now with ruffly $50k SS and $40k RMD. So if I was ten years younger, I’d be aiming for ruffly a $90k Roth conversion this year.

   But I’m finished with larger Roth conversions now that those other streams are on…

   Reply

   • The Wizard says

     December 9, 2024 at 12:48 pm

     DEFERRING, not defending!!

7. Robert Hoppe says

   December 9, 2024 at 2:33 pm

   Wizard. My wife and I are both 71 and I have been doing Roth IRA conversions for us since 2022, and will continue to do so through 2025. Since we are required to start RMDs in 2026 which is the year we turn 73, we will be limited in terms of the extent of Roth IRA conversions we can do from 2026 onward, since we have to continue maintaining our MAGI level each year under the IRMAA threshold to avoid the 1.4x premiums factor two years henceforth. I have supported the Roth IRA conversions idea to date in order to reduce the tax liability for our sons when they inherit. I believe that Congress will vote to increase tax rates in the future in order to partially offset the huge federal deficits. Lets face it. Our kids generation has it a lot tougher than we did when considering the current cost of living, especially housing, insurance, and food. Therefore, minimizing their tax liability by inheriting Roth IRA money vs traditional IRA money, is a great way to help them out.

   Reply

8. Free says

   December 9, 2024 at 5:07 pm

   Love this article and the projections for the future it provides based on the data available.

   I have tried for months, to no avail, to see if anyone done similar forecast for the INCOME LEVELS that will comprise each Tax Bracket in the future.
   For example, in 2021 the 24% tax bracket topped up at $329,850. In 2024 the 24% income bracket moved up to $393,900. That is a big change. What is it based on, (CPI? this is 19% in three years!). Can that be use to forecast future years?
   I basically would like to know if a 500k RMD in 2030 will be in the %22, 24% or 33% bracket.

   Thx.

   Reply

   • Jeff Enders says

     December 9, 2024 at 6:48 pm

     Free – the tax brackets, assuming no change in tax law are adjusted for inflation every year.
     the numbers you quoted was over 4 years, not 3 years, as the 2024 24% tax bracket ends at $383,900 and that will be $394,600 in 2025.

     For my own assumptions, I just use a 2.5% adjustment each year, so if I assume that TJCA is extended, then 2030 is ~$446,000. If TJCA is not extended, then I am using $332,00 for 2030. it is a BIG difference.

     it’s hard to answer your question which tax bracket $500k RMD will land you in 2030 – it depends on what Congress and Trump do with the expiration of TCJA by the end of 2025.

   • Nancy Memmel says

     December 9, 2024 at 11:35 pm

     Free;
     The TCJA brackets inflate based on the chained CPI. Pre 2018 they inflated based on the unchained CPI. Coming up with income brackets requires you to assume an inflation rate for each year.
     That 500 K RMD would be added to any other income you have and deductions ( and exemptions if the tax regime reverts ) dependent on your filing status would apply to get to the marginal bracket. Assuming no other income, single, standard deduction , I’d expect you’re looking at 32% if the TCJA regime is extended or 31% IF NOT.
     If you have a couple 100K of income before the RMD you would be in the 33% or 35% bracket. (Remember, the rates revert, too, if the TCJA sunsets, so you’d have 10%, 15%, 25%, 28%, 31% and 33% instead of the current 10%, 12%, 22%, 24%, 32%, and 35%, but by 2030 who knows what the brackets would be.)

9. The Wizard says

   December 9, 2024 at 6:31 pm

   A $500k RMD is large.
   So you have around $10,000,000 in tax deferred. Neato!
   It’s fun being rich; welcome to the club…

   Reply

   • Free says

     December 9, 2024 at 7:13 pm

     Thanks, Jeff.
     I understand it’s difficult to predict what Congress will do, so I was trying to focus on a few fixed assumptions and concentrate on the most probable tax bracket for me.

     Where does the 2.5% come from? Is it based on a government index or target CPI?

     I suppose I can just create a table that extends the current dollar ranges to 2030 and beyond.

   • Jeff Enders says

     December 10, 2024 at 10:31 am

     Free – as stated, the 2.5% is my own, personal assumption of inflation over time.

10. Free says

    December 10, 2024 at 10:16 am

    Thank you, Nancy, for the detailed response. This is exactly the answer I was looking for: “The TCJA brackets inflate based on the chained CPI.”

    I’m aware that all other income will factor into determining tax liability and the potential impact of the TCJA. With that in mind, I’m planning to max out the 24% bracket for Roth conversions to stay in the 24% marginal rate by 2030.

    I see this as a win, even without knowing future tax rates, since my 401(k) accumulation phase occurred with income taxed at the 33% marginal rate for most years.

    Cheers!

    Reply

11. Harry Sit says

    December 11, 2024 at 7:05 am

    This is the last update in 2024. November CPI was slightly lower than the previous month. The drop wasn’t enough to affect the projected 2026 brackets except the 3.2x tier, which went down a notch. It’ll go back up if the CPI goes back up.

    Reply

    • Craig says

      December 11, 2024 at 5:04 pm

      Clearly I don’t know how this works despite all the info you have provided. For the 2026 brackets forecast last month assuming future months at zero inflation, then replacing the zero November 2024 inflation forecast with the actual number near 3%, how does the 3.2x tier go down, again assuming zero inflation the remaining months. Replacing a zero with a positive value would increase the average even if all future months assumed 0% inflation. I don’t get it.

    • Tom P says

      December 11, 2024 at 7:31 pm

      Craig, the reason the 3.2 could drop after the November data was posted is because Harry’s “zero inflation” estimate assumes the CPI never changes and stays at the last known value. For the November data point the CPI index dropped from 315.664 to 315.493 (but was still 2.7% on an annual basis). Using 315.664 for all remaining months yielded $406,000 for MFJ, but 315.493 for all the remaining months yields $404,000.

      However, if you assume year over year inflation is 2% for all the remaining months the value will actually be $408,000. So, if you assume $404,000 you should be safe.

    • Craig says

      December 12, 2024 at 7:08 pm

      Thanks Tom,
      I get it a little better. So, this small downward change was just enough (and only in the 2.6x) to drive the calc down enough to then have to round down (vs up) to the nearest $1,000 and then get multiplied by 2 for the MFG bracket. True? Still don’t really know why the index went down a smidge.

      This is my first MAGI two year look-back tax year so don’t want to bust through….even if the next bracket is not that much, it is only for 5 months (August B-Day), and it is just me and not my wife, yet. Thanks again.

    • Harry Sit says

      December 12, 2024 at 9:32 pm

      That’s right. $202,498 rounds down to $202,000, which doubles to $404,000. Previously $202,5xx rounded up to $203,000, which doubled to $406,000. Because it’s right at the edge, as you see from GeezerGeek’s data and Liftlock’s presentation, 0.02% inflation will push it back up to $406,000, and 1.58% inflation will push it to $408,000.

12. RobI says

    December 11, 2024 at 7:21 am

    A bit of an academic question. How can month over month price increase but CPI itself fall slightly?

    Reply

    • Harry Sit says

      December 11, 2024 at 7:34 am

      News headlines usually report seasonally adjusted inflation. We only care about the unadjusted index here. The month over month price didn’t increase for our purpose.

13. RobI says

    December 11, 2024 at 7:43 am

    Thanks, as I suspected. Interestingly, looking back over several years, Nov and Dec unadjusted CPI typically falls vs October. This makes it harder to predict annual IRMAA change until we see Jan-Mar data. But it also means this months 0% inflation bracket forecast is likely conservative.

    Reply

14. Vince says

    December 11, 2024 at 8:57 am

    Does the December CPI change the amount of negative inflation required to reduce the 2026 joint $216,000 to $214,000. I’m guessing that with inflation not under control, the disaster required to reduce the 0% figure is not probable and we can safely use the $216k.
    Thanks to any smart person that can run the figures if Harry is busy. I’m sure I’m worrying for nothing but these Roth conversions are frustrating.

    Reply

    • RobI says

      December 11, 2024 at 9:35 am

      I calculated the unrounded single person number as $107,577. That is very close to where it drops to $107,000 and $214,000 MFJ. About -0.1% annual inflation would make it drop down to that level. My personal take is if you are even slightly stressing about it, use the lower $214k number, as the possible long run difference is minor.

15. Robert Hoppe says

    December 11, 2024 at 9:46 am

    Robi. I’m personally aiming for not exceeding $210K for the 2024 IRMAA MAGI bracket for MFJ (which relates to Medicare premiums in 2026), since we really don’t know the level of 2024 year-end dividends and capital gain distributions will be until we receive the 1099-DIV statements in the mail towards the end of Jan 2025. Brokerage firms may post estimated year-end dividends and capital gain distributions to their websites around mid-Dec, but that doesn’t give us much time to react in terms of determining any Roth IRA conversions during the 2nd half of Dec 2024. I’m estimating 2024 dividends and capital gain distributions for 2024 based on our 2023 amounts plus 10%, since we have virtually the same taxable account investments in 2024 that we had in 2023.

    Reply

    • RobI says

      December 11, 2024 at 10:20 am

      Robert Hoppe – Good point. I’m doing the same exercise myself and also leave a buffer.

      Vanguard just published estimated fund dividends and cap gains per share amounts yesterday. https://advisors.vanguard.com/content/dam/fas/pdfs/FYEEST.pdf

      Other brokers may be doing similar. I came across this useful link on Bogleheads forum.
      https://www.mutualfundobserver.com/discuss/discussion/62752/2024-capital-gains-distribution-estimates

    • GeezerGeek says

      December 11, 2024 at 7:54 pm

      RobI, Thanks for the Vanguard info. Last year Vanguard had a payout that I did not expect and it ended up moving my income to the other side of the IRMAA bracket. Fortunutely, I had some bond funds that I was able to sell for a capital loss, which moved me back below the bracket limit. I always leave some room for unanticipated income but the Vanguard payment was totally unexpected. This year I’m leaving even more room for unanticipated income.

16. Robert Hoppe says

    December 11, 2024 at 10:44 am

    Thanks Robl. The Vanguard link shows the expected 2024 dividends and capital gain distributions. However, both the Primecap Odyssey Funds link (estimate as of 9/30/2024) and the Schwab link show only capital gain distributions for 2024.

    Reply

17. GeezerGeek says

    December 11, 2024 at 11:55 am

    There is more of a risk in assuming a specific inflation rate if the inflation rate you assume is near an IRMAA breakpoint. I define a breakpoint as the rate of inflation rate that will change a bracket. If you assume an inflation rate of 2.5% and the breakpoint is 2.4%, then your assumption is more at risk than if the breakpoint is 1.5%.

    I’ve created a table that shows the breakpoints for the brackets. I’m only showing the brackets for singles so multiply by two to get the married filing jointly brackets. This table was calculated using the CPI for September, October, and November and assuming the stated inflation rate for the rest of the year.

    ‘1.4 ‘2.0 ‘2.6 ‘3.2
    0.00% ‘108,000 ‘135,000 ‘169,000 ‘202,000
    0.02% ‘ ‘ ‘ ‘1,000
    0.19% ‘ ‘1,000
    1.02% ‘ ‘ ‘1,000
    1.58% ‘ ‘ ‘ ‘1,000
    2.55% ‘ ‘1,000
    2.73% ‘1,000
    2.90% ‘ ‘ ‘1,000
    3.15% ‘ ‘ ‘ ‘1,000
    4.69% ‘ ‘ ‘ ‘1,000
    4.77% ‘ ‘ ‘1,000
    4.87% ‘ ‘1,000
    5.66% ‘1,000
    6.25% ‘ ‘ ‘ ‘1,000
    (Tables are not supported in comments so this may not post as I have tried to format it. I added the ‘ marks as a delimiter if anyone wants to paste it in Excel)

    Note that the brackets do not move in sync, so you only need to focus on the bracket that you are targeting and ignore the breakpoints in the other brackets.

    You can use the above table to calculate the brackets for any inflation rate between 0% to 6.5% by adding the increases of breakpoints above that inflation rate to the 0% bracket. So, if you want to calculate the brackets for a 3% rate of inflation, the 1.4 bracket would be 108,000 + 1,000 = 109,000; 2.0 bracket is 135,000 + 1,000 +1,000 = 137,000; 2.6 bracket is 169,000 + 1,000 + 1,000 = 171,000; and 3.2 bracket is 202,000 + 1,000 + 1,000 = 204,000. Those numbers agree with Harry’s 3% projection.

    Note that the 3% rate is near the breakpoints for the 2.6 (0.1 % higher) and 3.2 (0.15% lower) brackets.

    I think my math is correct, but it would be good for someone to validate it.

    Thanks!

    Reply

    • GeezerGeek says

      December 11, 2024 at 11:58 am

      Yep, comments destroyed my table formating so you will have to paste the table in Excel using the ‘ mark as a delimiter to see it.

    • GeezerGeek says

      December 11, 2024 at 12:05 pm

      Here is another copy of the table that uses tabs for formating. It will look out of line here but if you copy and paste it in Note Pad, it will format correctly.

      1.4 2.0 2.6 3.2
      0.00% 108,000 135,000 169,000 202,000
      0.02% 1,000
      0.19% 1,000
      1.02% 1,000
      1.58% 1,000
      2.55% 1,000
      2.73% 1,000
      2.90% 1,000
      3.15% 1,000
      4.69% 1,000
      4.77% 1,000
      4.87% 1,000
      5.66% 1,000
      6.25% 1,000

    • GeezerGeek says

      December 11, 2024 at 12:08 pm

      Sorry, but Comments stripped out all of my tabs so you can’t post the note in Note Pad to see the table.

18. Vince says

    December 11, 2024 at 3:59 pm

    Robi,
    Thanks for the info. I think it makes sense for me to just do the $214k and not try to maximize fully. This may be the last year for me to be able to Roth convert to keep under the first level.

    Reply

19. Liftlock says

    December 11, 2024 at 8:29 pm

    GeezerGeek – Thanks for your inflation bracket analysis.
    I copied your data into an excel file and created a .jpg file from it. I hope I interpreted your data correctly.
    https://1drv.ms/i/c/6a10efb2d76e24d2/EWAwTnm57jJCpXmzEsKh8i0Bn8QNpdwkk9DoH8xxVHhIAA?e=J3l3oA
    https://1drv.ms/x/c/6a10efb2d76e24d2/EddMfYQP5QhNtc8xokTYu2cBVylxW8rbNqp3C5pm3_cXpA?e=FGjrh8

    Reply

    • GeezerGeek says

      December 12, 2024 at 8:04 am

      Thanks Liftlock. That’s a much better visual presentation of the breakpoint data than what I provided.

    • Jim M says

      December 12, 2024 at 8:36 am

      Liftlock and GeezerGeek,
      I believe that IMRAA brackets for MFJ are always twice the value of “Single.” So for MFJ at the 1.4 bracket there should only be brackets $216K, $218K and $220K. It will always be an even number. There should not be a $217 bracket from inflation 2.73% to 4.87%. Correct?
      Jim M

    • GeezerGeek says

      December 12, 2024 at 10:51 am

      Jim M, you are right. I only looked at the Single tables to compare it to the original table I issued. The increments in the Joint tables should be $2,000, not $1,000. Thanks for catching that.

    • Harry Sit says

      December 12, 2024 at 9:44 pm

      GeezerGeek and Liftlock – You labeled $108,000 for single as [the bottom of] 1.4x tier, which is also the top of the standard tier. Because most people care about the top as a not-to-exceed number, I think it’s better to shift the tiers down to reflect the top, i.e. make them 1.0, 1.4, 2.0, and 2.6. The top of the 3.2x tier is fixed at $500,000/$750,000 in 2026.

    • GeezerGeek says

      December 13, 2024 at 9:42 am

      Harry, I agree. First bracket should be called “No IRMAA”. Thanks!

    • LiftLock says

      December 13, 2024 at 10:47 am

      I updated my files to reflect the IRMAA Bracket labels suggested by Harry Sit and the modified $2,000 MFJ Inflation Increment indicated by GeezerGeek.
      Links unchanged:

      https://1drv.ms/i/c/6a10efb2d76e24d2/EWAwTnm57jJCpXmzEsKh8i0Bn8QNpdwkk9DoH8xxVHhIAA?e=J3l3oA

      https://1drv.ms/x/c/6a10efb2d76e24d2/EddMfYQP5QhNtc8xokTYu2cBVylxW8rbNqp3C5pm3_cXpA?e=FGjrh8

20. Robert Hoppe says

    December 12, 2024 at 5:38 am

    GeezerGeek. I also noticed a significant increase from 2023 to 2024 in capital gain distributions from Vanguard as well. Therefore, I had to decrease my Roth IRA conversion amount to be done this month in order to keep within the IRMAA MAGI threshold for this year. Over the past couple of years, I have been striving (within MAGI limits) to move investments from mutual funds to ETFs in order to minimize capital gain distributions. I’m not a fan of capital gain distributions.

    Reply

21. Liftlock says

    December 12, 2024 at 9:35 am

    Jim M,
    I believe your are correct. I updated my files to include an additional set of columns to reflect the Married Filing Jointly IRMAA brackets at 2X the inflation adjusted brackets for Single Filing status.

    Reply

22. Randy says

    December 14, 2024 at 11:08 am

    I have been under the impression that my Irmaa premiums paid for 2024 (based on 2022 MAGI) will be adjusted once SS sees my actual MAGI for 2024. So if my MAGI is much higher in 2024 vs 2022, MC will conclude that I underpaid for 2024 and do a subsequent lump sum adjustment against my SS benefits to recoup my underpayment for 2024 IRMAA premiums. I also assumed that this would work in reverse and MC would refund if I overpaid. I have researched this and cannot find this question addressed anywhere. I came to this assumption because a couple years back SS hit me with a lump sum adjustment that I assumed must be a prior year IRMAA premium adjustment. I am beginning to think that I am wrong and IRMAA premiums are “one and done” – they are not subsequently adjusted based on actual amounts from the tax return for the premium year. Please clarify. Thank you.

    Reply

    • Jeff Enders says

      December 14, 2024 at 11:47 am

      Randy – IRMAA is “once and done”.

      Your 2022 MAGI impacts the IRMAA you paid in 2024. Once and Done
      Your 2024 MAGI will impact the IRMAA you will pay in 2026. Once and Done.

      You didn’t mention 2023 MAGI or 2025 IRMAA, but you should have received a letter by now (look on the SS website) confirming your IRMAA premium (if any) for 2025, based on your 2023 MAGI. That premium will be deducted from your January SS payment or if you are not yet taking SS, you should have received the Medicare invoice, including the new IRMAA charges by now for January, 2025 premium payments.

    • Liftlock says

      December 14, 2024 at 2:28 pm

      Randy,
      Your IRRMA for any given year (e.g. 2024) is always going to be based on your MAGI Income 2 years prior (e.g. 2022). As to whether it is “once and done” may be another matter. For example, your 2022 MAGI and 2024 IRMAA might change if you were to file an amended tax return for 2022 in 2024 or later. That could mean Uncle Sam or you is owed more than the IRMAA deducted on your Social Security check.
      When I retired, I filed for an IRMMA reduction exception based on the prospect of having reduced retirement income. At that time I was told that Social Security has a true up process to prevent people from claiming lower income than actually occurs.
      It seems to me that Social Security might periodically review one’s income retroactively to ascertain whether IRMAA was correctly calculated and charged. If not, it might result in a subsequent adjustment to Social Security benefits.

    • Nancy Memmel says

      December 14, 2024 at 3:07 pm

      If you ask for a “reconsideration” of your assessment for IRMAA (like if you retired and your income is going to drop) they will take an estimate you make for your income, but then check it to see that the income did, in fact, drop and if it did not, then bill you in arears for what you didn’t pay due to your erroneous lower estimate.
      They will not check / adjust prior years payments unless you disputed their assessment based on 2-year prior income. (If they did they’d be looking multiple times at the income of everyone on Medicare. ) Also, if you are a couple, then each of you would have to file to dispute your own assessment . (Otherwise the SSA would have to know who was married to whom and enrolled in Medicare; if you want special consideration you have to present the case.)

23. Randy says

    December 14, 2024 at 12:32 pm

    Wow. Thank you for the quick reply! I have been assuming that the IRMAA premiums are similar to estimated tax payments. They will later be adjusted to actual. Not sure why they do not do this, or why they do not use graduated income-based rates. The use of cliff brackets makes no sense to me either. In any event, I am now clear on this issue and thank you very much.

    Reply

    • Jeff Enders says

      December 15, 2024 at 6:44 am

      Randy – why do they do it this way? because that is the way Congress passed the law 🙂

24. Gary says

    December 16, 2024 at 6:47 am

    Harry, I am loving this blog and the discussion forum (although I wish it would not use a sequential listing for each entry).
    However, I wanted to step back and give you a shout out on projecting the brackets. You have helped me immensely. I have developed my own spreadsheet that does projections from monthly CPI releases, which I then confirm with your numbers (personally, I use a 2.5% long term CPI rate).

    You provide a great service. Thank you!

    Reply

    • Harry Sit says

      December 16, 2024 at 7:14 am

      Thank you for the compliments, Gary. I’m limited by how the blog software handles comments, which doesn’t do as well as discussion forum software. Speaking of projections for 2025 income, should we stay with 0% and 3%, or lower the upper estimates to 2% or 2.5%? I don’t think it matters that much as most people are looking at the 0% estimates. The upper estimates show how much leeway there is.

    • GeezerGeek says

      December 16, 2024 at 9:08 am

      Harry,
      My two cents on what rate to use.
      Like Gary, I’m also using 2.5% for this year but back when inflation was raging in 2022-23, I used a higher rate. I don’t remember what rates I used during those years but it was a lucky guess because my income was about $1,000 below the targeted bracket for both of those years so I guessed right.
      If you look back over the last 12 years that we have complete CPI data for, the average is 2.6%. That average is skewed by the 7.7% & 5.5% rates from 2021 & 2022 but is dampened by the 0.5% & 0.8% rates from 2014 & 2015.
      I think I also heard that 2.5% is the Feds targeted rate for inflation.
      Still, I think the breakpoints are important if they are near the projected inflation rate. I put an Excel spin button (Form control under Developer tab) so that I can increase/decrease the inflation rate calculation just by clicking on a button. That doesn’t require a macro or any code. That made it easy to find the breakpoints.

    • Jeff Enders says

      December 16, 2024 at 9:52 am

      Harry – my two cents is leave it at 3%….

      inflation is running at 2.6% currently and while the goal is to get it to 2%, the Trump economic plans create uncertainly on when or if we get it there.

      if you change the forecasts to 2% or 2.5% there is a risk (a small one but it could occur) and inflation does remain in the 2.6% – 3.0% range, that the upper end of the ranges are underestimating what occurs after the 12 months is over.

      Because of the rounding used in IRMAA, there are only small differences between using 2% (or 2.5%) and 3%, but my preference is always be conservative (i.e. use 3%).

    • Vince says

      December 21, 2024 at 8:59 am

      Harry,
      It would still be nice to know what inflation would trigger the joint bracket to go from
      $216,000 to $218,000. Maybe it’s 1%, 2%, or 3%.

    • Paul says

      December 21, 2024 at 9:14 am

      It’s 2.77%.

    • GeezerGeek says

      December 21, 2024 at 9:23 am

      Vince, All the bracket “triggers”, which I called breakpoints were listed in LiftLocks documents at the following links:

      https://1drv.ms/i/c/6a10efb2d76e24d2/EWAwTnm57jJCpXmzEsKh8i0Bn8QNpdwkk9DoH8xxVHhIAA?e=J3l3oA

      https://1drv.ms/x/c/6a10efb2d76e24d2/EddMfYQP5QhNtc8xokTYu2cBVylxW8rbNqp3C5pm3_cXpA?e=FGjrh8

    • Tom P says

      December 21, 2024 at 9:43 am

      Vince, year over year inflation of 2.3% for the remaining 9 months will push the 2026 first bracket from $216,000 to $218,000.

    • Nancy Memmel says

      December 21, 2024 at 3:09 pm

      Vince;
      I’m calculating 2.73% inflation for January thru August inflation to nudge the MFJ threshold for IRMAA charges up to to 218 K.

25. Teresa Durden says

    December 16, 2024 at 7:28 am

    Can someone walk me through how to pay pre taxes during the year to the federal government for money that has been rolled over to a Roth? How do I sign up for an account to pay into?

    Reply

    • Harry Sit says

      December 16, 2024 at 7:41 am

      See Paying Estimated Taxes: Amount, Timing, and Mechanics. Use Direct Pay if it’s a one-off. Sign up for an account with EFTPS if you’ll start doing it regularly. Also find the similar arrangement for your state.

26. Robert Hoppe says

    December 16, 2024 at 8:32 am

    Teresa. Since it’s difficult at best to determine the overall tax impact for all income (incl. interest, dividends, capital gain distributions, T-IRA distributions, Roth IRA conversions) for the year until the annual tax return is prepared sometime after Jan 31st, I have been paying quarterly estimated income taxes (both federal and state) based on 110% of the previous year’s total tax liability and then dividing that amount by 4. The IRS determines the required quarterly estimated tax payments based on the current year’s total tax liability divided by 4. If the estimated tax payment made in any quarter is less than that amount, the IRS will charge an underpayment penalty. Basing the estimated tax payments for the current year based on 110% of last year’s tax liability, and then dividing that amount by 4, is a safeguard against the penalty.

    Reply

    • Teresa Durden says

      December 17, 2024 at 7:38 am

      Thanks so much, Robert and Harry!

27. Allan says

    December 16, 2024 at 12:27 pm

    Wouldn’t it be nice if the upper limits of IRMAA tiers lined up with the upper ends of the 15%, 22%, 24%, 32% and 35% tax brackets?

    That of course would be too logical for our government.

    Reply

    • The Wizard says

      December 16, 2024 at 12:33 pm

      Well, one is based on AGI plus tax-exempt income and the other is based on Taxable Income after deductions so that’s not really feasible.
      It’s fine the way it is…

    • JoeTaxpayer says

      December 17, 2024 at 8:54 am

      We need both things to happen. Lineup with marginal tax rates. But also based on the same taxable income.

      I don’t really have any issue with the level being based on income from two years prior. But how they calculate it should be adjusted as I commented above.

    • Travis says

      January 7, 2025 at 11:27 am

      10% and 12% not 15%

28. Allan says

    December 16, 2024 at 4:10 pm

    It’s not fine the way it is. Why does it have to be based on AGI? Why can’t it be based on taxable income after deductions. It’s all so arbitrary. This is why our tax system is so f…king complicated. No one in there right might would come up with a tax system like ours. Eliminate the social engineering and make it simple.

    Reply

    • The Wizard says

      December 16, 2024 at 5:02 pm

      Ok, I’ll do that next chance I get…

    • Nancy Memmel says

      December 17, 2024 at 9:25 am

      T
      IRMAA values are multiples of the basic Part B premium and the Part D premium reflects the actual costs of the Medicare program, not some inflation measure, so for IRMAA to fall, I guess the cost of medical care itself would have to fall…. if that was what you were getting at.

    • Nancy Memmel says

      December 17, 2024 at 9:30 am

      Allan;
      It doesn’t HAVE to be based on AGI but it is. And MAGI defined differently for various applications. Tax system is complicated because it is composed of myriad pieces of legislation passed at various times to address the issues du jure at the time of passage. There was no grand master plan from the very beginning; its evolutionary.

29. T says

    December 17, 2024 at 8:11 am

    What happens to the IRMAA when there is deflation for the year that drives the numbers instead of inflation?

    Reply

    • Harry Sit says

      December 17, 2024 at 9:16 am

      This hasn’t happened in the 20+ years since IRMAA started. My literal reading of the law says the brackets should go down with deflation but I don’t know whether they’ll actually do that. Maybe they will freeze the brackets and wait for inflation to catch up. It’s only theoretical when inflation continues to be positive.

30. Dave says

    December 20, 2024 at 11:18 am

    Based on current inflation as of 12/20/24,what do you see the IRRMA brackets being for 2026.Thank you.

    Reply

31. Hoppy says

    December 20, 2024 at 2:36 pm

    I have used Harry’s method and the actual CPI’s to confirm the IRMAA numbers for the years 2022-2024. For the 2025 2.0X Standard Joint Bracket I am getting $332,000 rather than the $334,000 amount shown by Harry and CMS
    The average of the not seasonally adjusted CPI for All Urban Consumers (CPI-U) Series ID CUUR0000SA0 for 9/1/22-8/1/23 is 301.374 and 9/1/23-8/1/24 is 310.955. Dividing the numbers results in an increase of 1.032. Multiplying the Single 2024 Bracket of $161,000 by 1.032 results in $166,152. Rounding to thousands and doubling results in $332,000.
    What am I doing wrong?

    Reply

    • Harry Sit says

      December 20, 2024 at 2:45 pm

      The single 2024 bracket of $161,000 is already rounded. You’re supposed to multiply against the pre-rounded number if you do it one year at a time against the previous year. An easier and correct method is linked in the body of the main post.

    • Jeff Enders says

      December 20, 2024 at 8:04 pm

      Hoppy – technically, you have to take the average CPI and divide by the base year of 2017-2018, which was 249.280.

      Take the average 310.955 / 249.280 = 1.24741.
      Take the base from 2019 of $133,500 * 1.24741 = $166,529
      Round $166, 529 to the nearest $1000, which is $167,00 0.
      Double $167,000 yields $334,000 for “Joint”. 🙂

32. Milan says

    December 21, 2024 at 3:08 pm

    This month I am losing my job and may or may not work in 2025 depending on what comes my way. My wife is 60 and continues in her job which by itself exceeds the IRMA 2nd bracket. I am 65 and considering filing for Medicare (or stay on my wife’s plan). IRMA would make the latter much cheaper.
    Our 2023 joint filing was way into a higher bracket of 2.6x.
    – So can I claim reconsideration that I have lost job and estimate a low income filing separately?
    – Or is there no way around considering the wife’s income for IRMA purposes?

    Reply

    • The Wizard says

      December 21, 2024 at 3:42 pm

      IRMAA, not IRMA…

    • Jeff Enders says

      December 21, 2024 at 5:57 pm

      Milan – take your 2023 tax return (line 11 plus line 2a) and remove your EARNED income from the total. what IRMAA bracket does the result put you in? THAT is what would be the consideration.

      are you stating that the Medicare premiums plus IRMAA plus any out-of-pocket costs is still a better deal than your spouse’s employer’s plan?

      Be sure to discuss Medicare vs. Medicare Advantage with the SHiP representative in your state. They are funded by the federal government and are ‘Switzerland’ – they are not trying to sell you anything – just give information and education.

    • Tom P says

      December 21, 2024 at 7:37 pm

      Milan, you should get on your wife’s healthcare plan and also file for Medicare Part A. As I recall, you can file for Medicare 3 months before, and 3 months after you turn 65. As long as you are on your wife’s plan you shouldn’t be subject to IRMAA charges. For a loss of job I think you may have up to 8 months to join Mediare. Download the Medicare & You booklet for more into.

      I turned 65 in 2012 and filed for Medicare Part A at that time. But I didn’t stop working (voluntary layoff) until I was 73 in 2020. I had 3 months of company paid Cobra so didn’t go on Mediare Part B until November 2020. Since our income was high in 2018 I ended up paying IRMAA for November and December of 2020. And due to the layoff and drop in income, I filed the SSA-44 form and didn’t have to pay IRMAA in 2021 or 2022 eventhough our income was well above the limits in 2019 and 2020.

      I also agree that traditional Medicare is best if you can afford it. We pay $215/mo for Plan G, and next year our PDP is $0.00/mo.

    • Nancy Memmel says

      December 21, 2024 at 7:53 pm

      Milan;
      If you are not on Medicare in 2025, then IRMAA is not an issue for you , nor would the basic Medicare premium and Drug coverage apply. Eventually you’ll have to deal with it , but not right now. And you will have time to plan for it.
      Only if you file separately would your wife’s income not figure in, but you should consider if you wouldn’t be better off just using her employer sponsored health insurance.
      If you are married but file separately (MFS) , then your wife, in turn, cannot file Joint, and if her income puts you over the line for 2.6 X basic IRMAA as MFJ, then her income MFS is going to “enjoy” an increased regular income tax rate . You each will have to use the standard deduction or you each will have to itemize. There are other restrictions.
      Its complicated.
      You should check out in advance how the downstream ripples of filing separately will affect the deductions you are used to claiming MFJ, to make sure you don’t wind up saving on IRMAA only to wind up paying more on regular taxes.
      If you apply for a reconsideration, the SSA will check to see your actual income and filing status when it gets 2025 tax data.
      If your estimate is erroneous, they will bill you in arrears.
      Good luck to you.

    • GeezerGeek says

      December 21, 2024 at 8:39 pm

      As to which is better, traditional Medicare or Medicare Avantage, the answer is very circumstanial. There are some Medicare Avantage programs that are not good but there are some very good ones too, many of which are non-profit. It’s not just a matter of cost either. Sometimes it can be difffcult to find a practicioner that will accept new traditional Medicare patients. There are many pros and cons of both traditional and Advantage programs, which I will make no attempt to list them all here. I’m a happy Advantage customer, not just because of the cost savings but also because of the network of practicioners that I have access to. Plus, my plan allows me to go out of network without much incremental costs. My wife is on traditional Medicare with a Plan G supplemental so I’m familar that as well. Advantage programs may be a poor choice in the area you live but do the research first to check Medicare ratings, coverage, costs, and practicioners in network. There are many very happy Advantage customers, as you can see by the Medicare ratings.

    • Milan says

      December 22, 2024 at 7:19 am

      Thanks all for the very useful info. It seems that there are too many moving parts IRMAA being just one in the tax situation. If we file separately, wife will pay in higher taxes. IRS and SSA are setup to get you one way or another. Best option seems to go on wife’s group plan and wait out till things are clarified on my future work situation.

    • Liftlock says

      December 22, 2024 at 8:40 am

      Milan,
      If you decide to go on your wife’s health care plan, I would suggest determining whether her employer’s plan requires the insured to carry Medicare Part B for primary coverage once they reach age 65. If it does and you don’t enroll in Medicare you could end up with no primary insurance coverage.

33. Vince says

    December 21, 2024 at 3:39 pm

    Nancy, Geezer Geek, and Liftlocks
    Looks like 2.73% might be the inflation needed to push the 2026 joint
    bracket from $216k to $218k
    Thanks

    Reply

34. Robert Hoppe says

    December 21, 2024 at 5:05 pm

    Milan. Your situation sounds a bit complex. You appear to have worked for all of 2024. The IRMAA rules apply based on your combined incomes on a joint tax return. I believe it’s better for you to be covered for medical/dental under your wife’s employer-sponsored plan while she continues to work vs Medicare. I’m a strong believer in Original Medicare vs Medicare Advantage for many reasons, and I can tell you that the monthly Medicare Supplemental policy premiums and Medicare PDP prescription plan premiums are not cheap if you go with a type G Supplemental plan. I recommend that you enroll in Medicare Part A at age 65. Then apply for Medicare Part B when you are no longer covered under your wife’s plan. I don’t know what you mean by “IRMA would make the latter much cheaper”. I don’t know if losing a job would make a difference with respect to making an appeal for IRMAA MAGI purposes, since your wife’s income alone puts both of you in a 2.6x IRMAA bracket. Regarding filing the annual tax return as Married Filing Separately for 2024 or subsequent years, that may work for you for IRMAA bracket purposes, but not for your wife. I recommend that you work with a CPA who is very knowledgeable with respect to IRMAA rules and the impact of filing separately vs jointly.

    Reply

    • Jeff Enders says

      December 21, 2024 at 6:00 pm

      Robert Hoppe – why apply for Part A if he remains on the spouse’s plan? what is the benefit?

      if the spouse’s plan happens to be an HDHP plan, then if he applies for Part A, he can not participate in an HSA…

    • Nancy Memmel says

      December 21, 2024 at 8:06 pm

      Jeff;
      You’re right ; this will mess with a HSA if you have a HDHP form your job.
      if the employer plan is NOT a HDHP then you get a little backstop for hospitalization costs that the employer plan doesn’t cover (if it even comes up), it costs you nothing , and when you finally go to apply for Part B your information is already on file with the SSA and is gets approved more quickly, as any problems get flagged at the time you apply for Part A. We did this on the advice of a retired SSA agent .

35. Robert Hoppe says

    December 21, 2024 at 6:34 pm

    Jeff. I mentioned enrolling in Medicare Part A at age 65 because my understanding is that it will help cover hospitalization-related costs that are not covered by his wife’s employer-based plan. There is no Medicare-related penalty for not enrolling in Medicare at age 65 if already enrolled in an employer-sponsored plan. However, my understanding is that once you are no longer covered under such a plan, you have up to 8 months to apply for Medicare, wherein the 8 months clock starts with the date you’re no longer covered under that plan. It’s important to have a certificate of creditable insurance issued by the plan in order to apply for Medicare. You are correct that when enrolled in Part A, if his wife’s plan is a HDHP plan, he will not be able to contribute to an HSA. However, I don’t think that would preclude his wife from contributing to an HSA.

    Reply

    • Jeff Enders says

      December 22, 2024 at 3:27 am

      Robert Hoppe – The only recommendation I could make is for the OP to see the SHIP counselor in the OP’s community to assess the pluses and minuses of Medicare vs. Medicare Advantage (vs. remaining on their spouse’s employer issued insurance) given the OP’s specific situation. Any specific recommendation to sign up for Medicare (or not to) is occurring without the facts of the situation.

36. Vince says

    December 22, 2024 at 7:06 am

    Tom P,
    I noticed your reply said you calculated only a 2.3% inflation for the next 9 months is needed to push the bracket from $216k to $218k. That figure is much more possible than
    a 2.73% inflation rate. I forgot how Harry told us to calculate it.

    Reply

    • Jeff Enders says

      December 22, 2024 at 9:15 am

      Vince – 2.73% is annualized…. but there are only 9 months left in the measurement period…..so if inflation is 2.73% / 12 per month for 9 months, the tranche would be $218,000.

      That is .2275% per month.

      Monthly inflation rate published since July has been (monthly): .2%, .2%, .2%, .2% and .3%. Those five months average to 2.64% annualized, just shy of flipping the tranche to $218,000 if the same trend continues.

    • Tom P says

      December 22, 2024 at 10:26 am

      Vince, what I’m saying is if you fill in the 12 mo change numbers in the table below for the next 9 months and they are all 2.3 or higher, the 1st tier will be $218,000 or higher. As you can see from this table, inflation hasn’t been lower than 2.4 for quite a few months, so this seems like a pretty safe bet.

      https://www.bls.gov/regions/mid-atlantic/data/consumerpriceindexhistorical_us_table.htm

37. Robert Hoppe says

    December 22, 2024 at 9:05 am

    lIFTLOCK. My understanding is that there is a cutoff of 20 employees with respect to Medicare being the primary insurance. If there are 20 or less employees in the firm, then Medicare is the primary insurance when the employee (and I believe also the retired employee’s spouse if on the employer’s plan) reaches age 65. Therefore, when the employee (and/or spouse) reaches age 65 and there are 20 or less employees in the firm, he/she must enroll in Medicare Parts A and B (also Part D if enrolling in Original Medicare, rather than Medicare Advantage with a PDP plan). If enrolling in Original Medicare and a Supplemental Plan (G type) at age 65, I wouldn’t recommend also being enrolled in the employer’s plan, unless your medical providers do not participate in Original Medicare. If there are more than 20 employees in the firm, I recommend going with the employer’s plan rather than Medicare for both the employee and the employee’s retired spouse. If the employer’s plan does not cover the retired spouse, then the retired spouse should enroll in Medicare at age 65.

    Reply

    • Jeff Enders says

      December 22, 2024 at 9:21 am

      Robert – you may be oversimplifying as there is additional complexity here; even employers with less than 20 employees may be linked to other employers or unions ….here is a link to the rules.

      https://www.medicare.gov/publications/11546-Medicare-Coordination-of-Benefits-Getting-Started.pdf

    • Liftlock says

      December 22, 2024 at 3:14 pm

      Robert Hoppe,
      I am not up to speed on current rules. I worked for a large employer and was required to have Medicare Part A for primary insurance coverage when I turned 65. That may have been because I moved to a retiree plan. Regardless, I would want to clarify whether Medicare is required if I were considering moving to a spouses health care plan.

38. Vince says

    December 22, 2024 at 11:28 am

    Jeff,
    So now I’m not going anywhere near the $218k and will keep the $216k as my upper limit.
    Probably our last year for doing Roth conversions because I’m 70 and my wife will turn 70 next year so we both will be taking social security. Some have said do $214k to leave a buffer for mutual fund surprise distributions.
    Thanks

    Reply

39. Robert Hoppe says

    December 22, 2024 at 11:36 am

    Jeff. Thanks for the reference to the “Medicare’s Coordination of Benefits” document. The 5th point in the “Know Who Pays First” table in the document, specifically in reference to the “… have group health plan coverage based on your or a family member’s current employment” phrase, makes no sense to me. In other words, how can Medicare be in the picture if the employee (and/or retired spouse covered by the employer plan) is not disabled and is under 65? I think Medicare meant for this point to be relative only to individuals under 65 who are disabled. The only difference between points 4 and 5 (the first column in the table) is the reference to # of employees in the firm, which then accounts for who pays first. But my point is who can be covered by Medicare when under 65 and not disabled?

    Reply

    • jef says

      December 22, 2024 at 3:28 pm

      Robert – the table makes no reference to a situation where someone is under 65 and NOT disabled. Where do you see it does?

      Both the 4th and 5th bullet in the table reference where someone is under 65 AND disabled.

40. Vince says

    December 22, 2024 at 12:24 pm

    Tom P,
    Thanks for the clarification.
    This website is fantastic. I made a few mistakes 9-10 years ago before I found this site.
    Vince

    Reply

41. Robert Hoppe says

    December 22, 2024 at 7:00 pm

    Thanks Jeff for clarification. I think it would have been clearer if Medicare used the word “and”, rather than a comma.

    Reply

42. Robert Hoppe says

    December 22, 2024 at 7:11 pm

    Liftlock. I don’t believe you’re actually required to enroll in Medicare at 65 if you’re already covered under your spouse’s plan. I suggest that you look through the Medicare & You Handbook (https://www.medicare.gov/publications/10050-medicare-and-you.pdf) to confirm this. I mentioned in an earlier comment today the idea of enrolling in Medicare Part A at age 65 if you’re enrolled in your spouse’s plan, so that you’re partially covered for hospitalization costs that may not be covered by your spouse’s plan. But there probably is no reason to enroll in Medicare Part B (or a Part D PDP prescription plan) when enrolled in your spouse’s plan, since Part B requires a monthly premium. Part A does not require a monthly premium as long as you have met the minimum 40 quarters of paying into the Medicare system via FICA payroll deductions and/or self-employment FICA payments.

    Reply

    • Nancy Memmel says

      December 23, 2024 at 6:47 am

      Robert;
      Consider that if a requirement to have Medicare is the requirement OF THE EMPLOYER, the Medicare handbook is beside the point, highlighting that regardless of the beliefs of any third party, it behooves employees to find out from THEIR specific insurance sponsor what, if any, additional coverage they are required to have in place after reaching age 65.

    • Jeff Enders says

      December 23, 2024 at 8:28 am

      Robert – I would be wary of providing ANY advice or opinion here on a specific person’s situation. Everyone’s situation is different and the poster has not necessarily fully disclosed their situation and circumstance.

      Even applying for Part A, even though there are no premiums, is a decision specific to the individual. For example, applying for Part A eliminated the ability to contribute to an HSA, should the Poster have an HDHP plan…..

      This is where SHIP representatives, who are funded by the Federal Gov’t, play an important role. They are trained and available in every state to provide fact based information without bias (since they are not selling anything) about Medicare and all its options.

      Simply google “SHIP Medicare <>” for contact information

    • LIftlock says

      December 23, 2024 at 8:59 am

      Robert Hoppe,
      Your suggestion about enrolling in Medicare Part A at the very least makes sense to me.
      At the same time, I agree with Nancy Memmel that it seems prudent to check with the employer / sponsor provider of a spouses health care plan to see what Medicare coverage may be required upon reaching age 65. The employers summary plan description will typically detail any such requirements and it s usually an easy thing to check. I wouldn’t depend on what the Medicare book says.
      I suspect many private employers are looking to minimize their health care costs. One way to do that is to require primary insurance coverage through Medicare as an employer is permitted to do so by law. I don’t know what the law currently allows, but when I retired I had a large employer private plan which required Medicare for primary coverage upon reaching age 65. The plan provided no primary benefits for items that Medicare would have covered.

43. Jeff Enders says

    December 23, 2024 at 8:28 am

    Robert – I would be wary of providing ANY advice or opinion here on a specific person’s situation. Everyone’s situation is different and the poster has not necessarily fully disclosed their situation and circumstance.

    Even applying for Part A, even though there are no premiums, is a decision specific to the individual. For example, applying for Part A eliminated the ability to contribute to an HSA, should the Poster have an HDHP plan…..

    This is where SHIP representatives, who are funded by the Federal Gov’t, play an important role. They are trained and available in every state to provide fact based information without bias (since they are not selling anything) about Medicare and all its options.

    Simply google “SHIP Medicare <>” for contact information

    Reply

44. Eileen says

    January 7, 2025 at 2:46 am

    If you are in IRMAA because you are taking Required Minimum Distributions from traditional IRA’s, you could very well be in progressively higher IRMAA tiers as time goes on. This is because your RMD percentage of your account goes up very rapidly once you hit about 80 or so. While we all hope for good returns on our investments, this becomes a double-edged sword, especially if the investments in one’s IRA also do very well. It took me and my husband only two years to move up two IRMAA tiers because Interest rates also had soared over that same time period. (I am 77, he is 82). The answer to this conundrum is to have your IRA assets exclusively in Roth IRAs so that the income/gains are never recognized for tax purposes. Unfortunately, we were never eligible for individual Roth’s and/or employer plans did not embrace Roth 401(k) until we were already retired. Take heed, 50-60 year old folks, and avail yourselves of Roth’s if you can.

    Reply

    • Joe Taxpayer says

      January 7, 2025 at 10:56 am

      “The answer to this conundrum is to have your IRA assets exclusively in Roth IRAs”

      A bit too extreme. In 2025, the 12% bracket ends at $96,950 taxable, $127K+ gross including the standard deduction. I’d think that withdrawing beyond the RMDs, either to have and spends or converted to Roth, if planned correctly would help mitigate the issue you describe. Paying tax at 22/24% or higher to use Roth 100% seems a far higher cost than IRMAA ever would be.

    • The Wizard says

      January 7, 2025 at 11:34 am

      I agree with JT that trying to get all of your tax-deferred money into Roth accounts is too extreme and unnecessary. For the last decade or more prior to retirement in 2013, I was in the 28% marginal Federal tax bracket, so maxing out my tax-deferred 403(b) contributions made sense.
      I’m in the 24% Federal bracket now so it worked out fine.

      In retirement, it’s important to realize that your tax-deferred 401(k)/403(b)/tIRA money is really DEFERRED COMPENSATION and to begin withdrawing from these accounts immediately, 5% or more per year.
      These withdrawals can be a mix of money for living expenses and Roth conversions. Both are taxed as Ordinary Income.

      If you leave your tax-deferred untouched until RMD age, you could be in a bad situation tax wise.

      I modest conversions for ten years prior to RMDs at age 73. Had I Roth converted even more, I would have gotten out of the 24% bracket and into the 32% bracket which makes no sense.

      Nowadays, my RMD is my third largest income stream, less than my Social Security. I do QCDs and small Roth conversions even now. If my tIRA balance continues to grow, I can do even larger QCDs if I choose to…

45. Mike says

    January 9, 2025 at 6:46 am

    How do we address the Part D surcharge? I can find info on the amount to pay in 2025 at various brackets, but no discussions anywhere that I can Google on estimating 2026.

    Reply

    • Harry Sit says

      January 9, 2025 at 9:03 am

      The income brackets for Part D will be the same as Part B. The average premium used to calculate the surcharge increased by $2/month from 2024 to 2025. You won’t be too far off by adding another $2/month for 2026. Whether the actual increase in 2026 is $1/month or $3/month makes little difference for budgeting.

    • GeezerGeek says

      January 9, 2025 at 9:31 am

      The Inflation Reduction Act premium stabilization provision capped the premium at 6% per year. For the last two years, the premium increase has been 6%. So the max the premium can be is $38.99, an increase of $2.21. So, as Harry said, estimating a $2.00 increase “won’t be too far off”.

    • GeezerGeek says

      January 9, 2025 at 9:46 am

      One further note to be sure that you understand that what we are talking about is the Part D Average Basic Monthly Premium, which is the number that the surcharges for the brackets are calculated from. If the Part D Average Basic Monthly Premium for 2026 is $38.99, the surcharges for the brackets will be $14.50, $37.50, $60.40, $83.30, and $91.00 from bottom to top.

46. Mike says

    January 9, 2025 at 10:16 am

    I think I have it. So my Part D IIRMA next year will be $37.50 added on to whatever my provider will charge. This year WellCare in Texas is charging $0.00. For me, and my policy, that surcharge is an INFINITE increase😧

    Reply

    • GeezerGeek says

      January 9, 2025 at 10:42 am

      Yes, if you are in the second IRMAA bracket, that will be the cost. Unless Wellcare changes their charges, you will continue to pay them $0.00. The $37.50 will be deducted from your Social Security, just like your Part B is deducted. If you are married, your wife will also have a $37.50 deduction.

47. Tom P says

    January 9, 2025 at 10:41 am

    Mike, the estimated IRMAA for Part D of $37.50 will be taken out of your SS payment. It has nothing to do with the cost of your Part D plan. I too switched over to Wellcare this year at $0.00 premium since Aetna Silverscript raised their rate so much.

    Reply

    • Mike says

      January 9, 2025 at 1:11 pm

      Tom, I do understand that and in Wuicken I account for it that way, but in life I just view the surcharge as the price of Part B and D being that much higher. I also view government fees as disguised tax increases. But I’m just cantankerous.

48. Robert Hoppe says

    January 9, 2025 at 11:11 am

    Wellcare offers 3 PDP plans. Each one of them shows a monthly premium for 2025. Where are you seeing a $0 monthly premium for their PDP plans? I had Wellcare ValuScript plan for the past 5 years and switched over to the AARP UHC Medicare Preferred Rx plan (which has no annual deductible, but does have a $113.70/month premium), since the total cost for 2025 for premiums and copays is less than any of the Wellcare plans. Of course, it all depends on your medications.

    Reply

    • GeezerGeek says

      January 9, 2025 at 11:26 am

      Robert Hoppe,
      Advantage, Part D, and other Medicare plans offered not only vary from state to state, they can vary regionally within a state. I don’t have the same options for my Advantage plan in the western part of my state that folks in the central and eastern part of the state have. That’s why you have to enter your zip code when you look up Medicare plans on the Medicare site. So unless you live in the zip code as Mike, you could have different plans available.