2023 2024 2025 Medicare Part B IRMAA Premium MAGI Brackets

Comments

1. FinancialDave says

   September 3, 2019 at 8:20 am

   Harry,
   Nice article.
   One of the major reasons for many investors problem with IRMAA resides with the size of their taxable account and the investing strategy they use there. Also, in most cases, the first time this shows up is 2 years after they decided (or someone decided for them) it was a good idea to put all their high dividend-paying stocks in the Brokerage account not even realizing that there is an “IRMAA,” let alone that it will add thousands of dollars to their expenses if they go over it.

   Reply

   • dennis says

     October 15, 2019 at 7:09 am

     how is the irmaa figured if you were married in 2018 but will be single in 2020? income will be less in 2020 with only person get social security and pension

   • Harry Sit says

     October 15, 2019 at 8:44 am

     Death of spouse and divorce are two of the qualifying events to appeal the IRMAA assessment. See link in reply to comment #2 below.

   • Tanya says

     March 9, 2021 at 10:29 am

     Question: In 2019, my husband and I took a large amount from a 401K to purchase our house in cash, so we wouldn’t have a mortgage now that we are retired. We retired in 2016. As a result, we are now in our 2nd year of IRMAA charges, totaling over $800 a month together. Our total income for 2020 was below the threshold for an IRMAA surcharge, and it will also be below the threshold for 2021. Do we have a case to appeal?

   • Tanya says

     March 9, 2021 at 10:44 am

     I forgot, we also took money in 2018 to pay for a family event. Yes, yes, I know; we did not know about IRMAA, and ignorance is no excuse. But 2 years of this?

   • Coral King says

     September 13, 2021 at 6:29 pm

     Why do people think they want “Medicare for All”? They must not know that Medicare is very expensive by the time they collect here and collect there, and has big holes in the coverage. There is no out-of-pocket max and you can go broke on Medicare. It is so bad that most folks have to take out a policy to cover what Medicare doesn’t.

   • Drewmcg says

     September 14, 2021 at 11:29 am

     Coral King: Assuming ur not just trolling, then:

     —there are still millions of Americans with no health insurance ,
     —there are plentiful Medicare Advantage plans with zero additional premium with annual out-of-pocket caps (nb: I’m not recommending them if you can afford original Medicare + medigap),
     —@ 64 with private (non-group) “high deductible” insurance, I’ll pay at least $150/mo. less for original Medicare + medigap with far, far better coverage/exposure, and
     —logically, adding younger people to Medicare should REDUCE senior’s Medicare and medigap premiums, b/c they are healthier as a group. Its the hospitals/doctors who hate the idea, b/c lower reimbursements associated with Medicare ….
     Hope this helps.

   • Charles Romer says

     September 20, 2021 at 3:57 pm

     A very good analysis of this (the tone of the introduction is especially welcome)
     BTW if you find yourself about to go over one of the bracket cutoffs and can not reduce enough, go the other way and make an additional distribution to get near the next higher cutoff. This will greatly reduce the marginal cost and reduce your IRA balance in the future. (Assumes IRA required distributions are what drives this).

   • DrewMcG says

     September 21, 2021 at 9:16 am

     Agree (and thanks).

   • Ralph says

     September 30, 2021 at 9:28 pm

     I think the reason IRMAA exists is to hide the simple fact that it is an income tax. Most voters are too busy working and dealing with life to understand how their own government is setting them up for a future shakedown. Everyone who votes for bigger government will get what they deserve, but by the time they wake up it will be too late. This is one more reason to get as much as you can into a Roth IRA.

   • KK says

     October 17, 2021 at 12:47 pm

     Harry;

     Recent COLA has been announced to be 5.9%. Does this mean the first IRMAA cutoff for 2023 (based on 2021 income tax filing, MAGI, and MFJ status) will be $188,000 X 0.059 = $11,092 added to the $188,000 you consider to be the number for 0% inflation? Thus ending up be a total amount of $199,092? Please let your readers know if this is correct.
     Thank you.

   • Paul says

     October 17, 2021 at 12:59 pm

     KK, IRMAA is not calculated from the same COLA used for Social Security. See my post #164 below for a description of the algorithm.

   • BONYC says

     December 23, 2021 at 6:02 pm

     Very needed and helpful detailed information.
     This IRMAA is real pain to manage. I wish the cutoff points – brackets were set up in advance If I am adjusting my income now before years end, I would like to know what threshold not cross that will haunt me two years later.
     Nobody can see two years ahead. We are forced to play conservative and leave few thousands on the table just to be safe.
     Income taxes could be quite difficult without this added complication.

   • Larry says

     September 30, 2022 at 9:44 am

     Most of my income is from my IRA’s. I have found it a good idea to have a HELOC available. I track my income through the year and by Sep/Oct determine if I will be crossing an IRMA bracket. If so, I will take an advance from my HELOC for any required income and pay it back with next year IRA funds in January of the following year. It may cost a few hundred dollars in interest but way less than the $2000 my wife and I would pay if we crioss the bracket.

   • Cathy M says

     December 16, 2022 at 9:33 am

     Please explain the reason why “married filing separately” is treated differently. Why they should automatically jump to tier 4, again, just for going $1 over the limit. At least all others only jump 1 tier where the penalty isn’t that great. I’m barely over and my husband’s income is way below the limit.

   • Harry Sit says

     December 16, 2022 at 9:41 am

     > Please explain the reason why “married filing separately” is treated differently.

     Congress made it that way when they passed the law many years ago. They don’t explain their reasons.

   • Peter Breger says

     December 17, 2022 at 7:03 am

     Does anyone know if the IRMAA uses seasonally adjusted or non seasonally adjusted CPI-U numbers?

   • Harry Sit says

     December 17, 2022 at 7:13 am

     IRMAA uses non-seasonally adjusted CPI-U numbers.

   • Paul says

     August 6, 2023 at 1:42 pm

     Dave,

     Great article. Very important but often misunderstood topic. Not fully understanding the rules can cause large errors and increased costs for Medicare as one attempts to do financial transactions such as Roth conversions while attempting to avoid large IRMAA impacts. I had one question for the 2025 IRMMA estimate in your article. 163 K multiplied by 1.03 would be 167.89 K. If this is rounded to the nearest 1k wouldn’t it be 168K. The article puts the IRMAA level at 167K. I looked and could not find the exact rounding rules in any official Medicare document. Hopefully if $500 or more round up to higher $1000, if not round to the lower $1000. Does Medicare clarify the rounding in any official document of theirs? I could not find it. If you know the link to their official discussion of their rounding rules, it would be nice to have it.

     Your article did a great service to seniors.

2. Luis says

   September 3, 2019 at 4:47 pm

   This IRMMA stuff is one of the most infuriating thing I have seem: if you are high income you pay more while working 2.9 % in all your income( no cap like social security), but then double penalized in medicare premium AND medicare part D, when begins in the Medicare plan, the final number could be incredibly high.Besides they go back two years( by contrast in Obamacare is enough your word regarding income). Good look when you call social security and medicare to explain that you retire and your income is well low. Everything thanks to the liberal politics to penalized the successful people.

   Reply

   • Harry Sit says

     September 4, 2019 at 7:24 am

     If your income two years ago was higher because you were working at that time and now your income is significantly lower because you retired, you can appeal the IRMAA assessment.

     “You had a major life-changing event that significantly reduced your income” is listed as one of the reasons for appealing, and “work reduction” and “work stoppage” are two life-changing events among others.

     https://www.hhs.gov/about/agencies/omha/the-appeals-process/part-b-premium-appeals/index.html

   • Roger says

     August 21, 2020 at 1:38 pm

     Actually, the IRMAA law was passed in 2003, when Republicans controlled the House, Senate and Presidency. However, I agree with your point about tax rates. What makes it more confounding is that you probably had a bunch of tax lowering deductions while working, which are no longer available. To add insult to injury, if you contributed to your IRA (or other retirement plan) regularly, you may find that your retirement income is greater than your working income, with few ways to reduce it due to the Required Minimum Distribution rule.

   • Rosalie Thomson says

     October 24, 2020 at 9:43 pm

     Just be glad you make enough to pay.

   • Bobby Fischer says

     January 9, 2021 at 1:29 pm

     I appealed my IRMAA premium in late 2019 after the new rates were released because I had retired at end of 2018. Income in 2018 was very high but dropped well below the first IRMAA threshold in 2019. I filled out the paperwork, called the local SS office, got an appointment, met with the agent and won the appeal. The agent was nice and did a great job.
     Blaming your problems for paying your fair share on those left wing liberals or the radical right wing-nuts doesn’t do anything but show your own ignorance and intolerance. Grow up.

   • David Karchensky says

     April 17, 2021 at 1:02 pm

     Not exactly liberals doing. It started in 2007, when George Bush was president. That was for part B. It continued in 2009, under O’Bama, for part D.

   • ernie says

     August 14, 2021 at 2:39 pm

     this is thanks to conservatives do not fool yourself. they think surcharges are great so they can say they did not raise taxes

   • powderriver says

     October 14, 2021 at 4:37 pm

     At least “liberals” know how to spell.

   • Mario says

     February 16, 2022 at 10:11 am

     Question : Is the selling of your own personal home is considered as Income tours your MAGI ?

   • Harry Sit says

     February 16, 2022 at 7:27 pm

     Mario – The gain from selling your own personal home that exceeds the $250k/$500k exclusion counts toward your MAGI. The gain also counts when you don’t qualify for the exclusion.

     https://www.irs.gov/taxtopics/tc701

   • The Wizard says

     December 16, 2022 at 10:28 am

     The reason for the MFS thing is to keep rich people from gaming the system. Let’s say you have $1M AGI filing jointly. It might be possible to split that to split that income to $920k for one spouse and $80k for other spouse, thus saving a lot on IRMAA.
     But Congress said no…

   • Tom P says

     August 6, 2023 at 3:28 pm

     Paul asked about the 2025 IRMMA projection with 3% inflation. The projected 2025 number with 3% inflation is not computed from the projected 2025 number with 0% inflation. Each bracket is adjusted from the Base Sep-Aug 2017-2018 CPI-U average, which was 249.280.

     If inflation is 0% from now through Aug 2024, and each month has the same CPI-U of 305.109 from Jun 2023, then the 2023-2024 average CPI-U will be 305.109. Then (305.109/249.280) x $133,500 (2017-2018 base number) equals $163,399, which rounds to $163K, the same as Harry shows. You can calculate the 3% increase by increasing each month’s CPI-U by 0.25% from the previous month… or you can just take Harry’s word for it 🙂

     For rounding, anything 500 and up gets rounded up and < 500 gets rounded down, which is what the Excel formula =ROUND(,-3) provides.

3. Jon says

   September 12, 2019 at 9:19 am

   IRMAA is pathetically complicated. Only by raising awareness can the public learn what is being done to our elderly who have worked hard to save and invest in order to fund their retirement. IRMAA is a well hidden cost to until one approaches retirement. Each Presidential candidate should be individually questioned and tested on their detailed knowledge of what IRMAA is and how it is calculated. That way voters can determine if each candidate understands what the policies of liberal politics have done…or if the candidate is simply ignorant which is the likely situation. What a wake up call this would be!

   Reply

   • FactsPlease says

     December 10, 2019 at 3:21 pm

     Liberal Politics? You shouldn’t be allowed to vote. This was part of a Republican (Conservative) bill passed in 2003 and signed into law by George HW Bush:
     Medicare Prescription Drug, Improvement, and Modernization Act

   • Tom Terwilliger says

     March 7, 2020 at 12:12 pm

     Yes, it was enacted under the Bush administration, but it wasn’t nearly so bad as long as the threshold was being indexed. That stopped in 2011 when we all know who was in the White House and who had ironclad control of Congress. And “W” was hardly the model conservative; no, anytime the liberal press and others barked, he jumped, and this was one sad example.

     But the really immoral aspect of this is the idiotic way “married filing separately” are treated. There is no conceivable reason why they should automatically jump to tier 4, again, just for going $1 over the limit. At least all others only jump 1 tier where the penalty isn’t that great.

   • d says

     May 24, 2020 at 11:56 am

     indeed a liberal policy; person was correct that this started under Bush (also responsible for Medicare part D) – but if you think Bush was a conservative instead of a flaming liberal you are sadly mistaken!
     I pay IRMAA, and as bad as this policy and tax is, wait and see how bad it gets when the liberals take charge.
     Read history — when SS started under Roosevelt, the Progressive argued that we “needed” it, and that it was only a 1% tax — now it is a 15% tax!

   • Laurel says

     June 13, 2020 at 2:19 pm

     I’m all in favor of both presidential candidates being “questioned and tested on their detailed knowledge of what IRMAA is and how it is calculated.” Does anyone seriously think the current incumbent has a clue about IRMAA, or that he even cares if you have Medicare coverage?

   • Patti_G. says

     February 2, 2021 at 12:26 pm

     $$$$ rip offs like IRMMA is the least of it for decent older Americans. The only way doctors can keep their Medicare designation is that Medicare forces these doctors to prescribe pills and medical devices to keep Big Pharma in business. If a Medicare doctor is trying to keep their patients well, that is not the goal of Medicare, and they are kicked off. It is beyond diabolical. But, yes, Democrats scour doctors notes moreso to kick them off.

   • Kenneth Setter says

     February 18, 2021 at 7:07 pm

     Patti G. : This has to be one of the most uninformed posts I’ve seen in quite a while. Medicare DOES NOT push prescribing pills and medical devices. Medicare physicians DO NOT get “kicked off” for trying to keep their patients well. And Democrats DO NOT have access to medical records to scour them for anything. This is pure rubbish.

   • Patti_G. says

     February 18, 2021 at 8:20 pm

     To Kenneth,
     You must be a Democrat or else not old enough to be on Medicare yourself. Another thing Big Pharma in connection with medical scoring is doing is decreasing the range of what is deemed in the ‘healthy range’ when getting blood tests….just so they can give you a pill for your cholesterol. And now with corvid, the whole medical field has become totally corrupted.

   • Kenneth Setter says

     February 19, 2021 at 9:35 am

     To Patti_G.: I am old enough to be on Medicare for over 5 years. Yes, I am a Democrat, and judging from your unfounded criticism of Democrats in your original post, I assume you are a Republican. That should not matter if we are discussing differences of opinion, not alternate sets of facts. My concern was that you were making statements about Medicare that are not true.

     I am also a physician and I can tell you that the changing of normal ranges for blood tests is something that happens all the time. It is not due to a conspiracy by “Big Pharma”, but part of changes that occur in medicine all the time as additional research refines our knowledge. I have my share of criticisms for the pharmaceutical industry but this is not one of them,

   • Patti_G. says

     February 19, 2021 at 11:41 am

     To Kenneth,
     Have you ever been a Medicare provider? Then you would know. And no, I do not consider myself a Republican. But alas, this thread is about IRMMA and we’ve strayed OT.

   • John Endicott says

     February 11, 2022 at 7:57 am

     Um, factsplease, Bush the elder (HW) was not in office in 2003. It was Bush the younger (W).

   • Frederick and Salma Hayek says

     April 21, 2022 at 9:24 am

     My take is – if you have $190k in income, you can afford the extra premium. How much would your health insurance premium be if you did not have Medicare? Just ask any random 64 year old. If you look it up, the “average” premium is $600. That does not include a $2500 deductible and copays that will happen which Medicare plus a supplemental policy do not have.

     Don’t tell me you paid into Medicare and so you “paid your fair share”. You didn’t. You are being subsidized heavily. Health care costs have gone up dramatically since you started paying Medicare taxes. In 2010, the maximum Medicare tax you could have paid is $3100 and that assumes you were self-employed and paid both the employer and employee costs. If you were employed by a company, you paid half that.

     Add this to the fact that the number one reason for bankruptcy in the US is medical expenses (62% of all bankruptcies is a common number quoted), and that the average family income in the USA is under $70k, and you want to complain about an extra $1600 on your $190k income? Please. Spare me the outrage.

     Many may disagree with my assessment. I respect your difference of opinion. But if you want to have some fun, post your complaint about the extra IRMAA cost and why you have to pay it on social media and see what happens.

   • Terry says

     April 21, 2022 at 9:42 am

     Frederick, I agree 100% with your entire post. That being said, I see nothing wrong with trying to minimize one’s Medicare premium. I am fortunate that my income is such that I am able to shift some income/expenses between years and I always try to keep my MAGI below the the income points where the premium increases.

   • Burt P says

     April 21, 2022 at 10:11 am

     Frederick and Salma,
     I agree with your overall assessment.
     Unfortunately, you are mistaken about the maximum Medicare tax payment in 2010.
     The cap on wages for the Medicare tax was removed by The Omnibus Budget Reconciliation Act of 1993 (or OBRA-93).

   • GeezerGeek says

     April 21, 2022 at 11:28 am

     I also agree that the wealthy should pay more, but it is misleading to say the wealthy are being “subsidized heavily”. In addition to the removal of the Medicare tax income caps in 1993, after 2012, there is the Medicare Net Investment Tax of 3.8% which is not capped. The threshold for the NIT is reasonably high at $250,000 but that threshold is not indexed to inflation so each year, more tax payers are subject to the tax as inflation raises income. It would be difficult to determine the level of income that an individual switches from being subsidized to being a subsidizer, but with the wealthy paying up to 3.4 times the base premiums for Medicare, the 3.8% NIT, and the uncapped Medicare income taxes, that level of income is unquestionably reached and exceeded for some individuals.

   • Vince says

     April 21, 2022 at 1:09 pm

     It’s sad that 50 years ago people who worked hard and made a good living were applauded.
     Now those who don’t work hard want those who have been rewarded to pay for their laziness. Government support should only be used by the needy not by those who want to stay home and watch Netflix. There are help wanted signs everywhere because businesses can’t find anyone who wants to work. Taxing the wealthy has always been popular but it penalizes those who have worked hard and strived to live within their means. Many who post on this site feel entitled to special treatment at the detriment of those who worked hard all their lives. Obviously it’s much easier to be supported by the wealthy than to get off the couch and go to work. I’m sick of people who think anyone in the upper middle class is evil and should have their money taken.

   • GeezerGeek says

     April 21, 2022 at 3:25 pm

     Vince, I would agree with you if all hard workers were wealthy and all wealthy people were hard workers. Since I’d prefer that posts on this site stick to the subject of the article, I won’t elaborate further.

   • Frederick and Salma Hayek says

     April 22, 2022 at 9:19 am

     Thanks to everyone for your responses.

     To Terry, I am all for trying to avoid IRMAA. That’s just smart financial planning.

     To Geezer – Same response as to Terry. I will, however, change my comment from “heavily subsidized” to “subsidized” as your comment is perfectly reasonable. On NIT – since $250k in income puts you in the top 10% of households, 3.5% on investment income is not going to cause you to struggle to pay your bills. As with IRMAA, I believe it is smart to arrange your investments to avoid the NIT. BTW, I pay some NIT and expect to pay IRMAA at 65.

     Burt – I stand corrected. Thank you.

     Look, I am an old line fiscal conservative. When times are good, you pay your bills and also pay the debts you ran up when times were bad. My only point to all of this IRMAA NIT discussion is those of us at the top of the income/net worth continuum should not receive any subsidy from a government program.

     Medicare is wonderful but it does cost the elderly significantly less than they would have to pay for private insurance and it covers more. I know because my parents ran up big medical bills in their last few years and paid only for prescriptions due to Medicare and their supplemental policies. Just my 3 cents (inflation, you know).

     Thanks to all the courteous conversation. This is sometimes rare online.

     Peace

   • Erin Kraus says

     February 15, 2023 at 12:03 am

     Have you considered that politicians may not pass your test:-)

   • Ernie Kramer says

     April 29, 2023 at 11:17 am

     Gruels, this would be WAY down the list of any presidential candidate, note I have had to pay Irma’s a couple times. Get real, it affects very few people, hardly a major issue

   • Patricia says

     August 22, 2023 at 1:30 pm

     I know your comment was from several years ago but I definitely agree with your comments. IRMAA is a racket. I’m severely handicapped and one thing I am able to do is go to the casino and push the slot machine button. Only if you have a handpay it increases your MAGI for IRMAA. They make you include all your winnings but don’t let you take the losses to offset it (for taxable income they do but not for IRMAA). Who can I write to about this? This is crazy. Anyone knows if you go to the casino enough you lose whatever you win

4. Lucy Yore says

   September 12, 2019 at 4:35 pm

   This is a great article and I wish I’d had this information available to me when I started challenging my own IRMAA. The IRMAA premium “adjustment” came as a surprise to me, too. After working for fifty years, paying taxes, and never using unemployment insurance or disability benefits, I never expected that my reward for paying my way was to be assessed higher Medicare Part B premiums. I retired in 2018 and became eligible for Medicare in July 2019. In 2019, the “look back” income used to determine whether or not I would owe IRMAA was my adjusted gross income on my 2017 tax returns. Because I retired in 2018 and my 2019 adjusted gross income would be significantly less than it was in 2017, I appealed the original decision to raise my Medicare Part B premium. I am a firm believer in dealing, whenever possible, with matters like this face to face. I skipped asking for help by phone and went to my local Social Security office. The first person I met with didn’t use the correct amount of after-retirement income I expect in 2019, and my first appeal was denied. So I made a second trip to re-submit my appeal. The person I met with the second time recognized immediately the mistake the first person had made, corrected it and re-submitted the appeal. Within a week I received a letter from Medicare notifying me that my appeal had been accepted and that I would only owe the ordinary Medicare Part B premium. My perseverance has saved me over $200 a month. If you have been unfairly assessed an IRMAA increase in your premium, appeal the decision in person, and don’t give up until your appeal has been granted.

   Reply

   • Kenneth Setter says

     August 5, 2020 at 9:38 pm

     In 2020 with the COVID problems, the local offices are all working online – no face to face meetings. I retired the first of this year and made application to have IRMAA removed once I knew pretty closely what my 2020 income would be. The phone experience was MUCH better than going and sitting in the SS office half the day. The agent I dealt with was very knowledgable and told me exactly what they needed – mainly just the SSA-44 forms, documentation to establish that I had retired, and an estimate of what my 2020 income would be. They take your word for it but you have to send a copy of your 2020 tax return when it is filed to document that you were actually below the thresholds. I sent the documents and a letter of explanation. The approval of the removal of the IRMAA happened within 5 days (the agent thought it might take 1-2 weeks). I was due refunds for the 6-7 months of IRMAA we had already paid in 2020 and these were deposited in my checking account within another 2 weeks. All in all a very easy process. I hope they never go back to face to face meetings.

   • Lucy Yore says

     August 13, 2020 at 9:00 am

     Kenneth Setter – thanks for your thoughtful reply. My experience was pre-COVID. I initially tried to handle my situation by phone, and the person I spoke with was clueless, didn’t know the IRMMA appeal procees, and told me that I owed based on prior income. Not helpful at all. Once I spoke person-person at the SS office, the matter was settled quickly.

   • Roger says

     August 21, 2020 at 1:43 pm

     I had a similar experience, but a phone call worked fine for me. One call to say my wife and I retired and they refunded the IRMAA that had already been collected.

   • Vince says

     April 21, 2022 at 3:58 pm

     Geezergeek,
     Since the subject of the article was someone saying anyone whose wages, social security, RMDs, and interest income is over $91,000 in 2020 should pay more in 2022 for Medicare I feel it’s ok to comment on that. I don’t think it’s difficult for someone who has worked hard to be in that bracket. I won’t elaborate further.

   • powderriver says

     April 22, 2022 at 8:05 am

     Vince — You already “elaborated further” in your initial screed. Such purposefully mis-informed, self-entitled nonsense; and freely advertised in public!!

     A progressive tax structure has been in place here in America for quite some time, with support from both liberals and real conservatives. But it appears that self-styled conservatives feel put-upon by it, touting their own undocumented work ethic over over that of all others……surely no one gets rich in America without “hard work”, right?….and surely all those who do work hard get rich, right? Apparently any excuse will do to shout out some dog whistles.

   • Vince says

     April 22, 2022 at 8:52 am

     powderriver,
     Harry Sit does a great job with this blog so maybe it would be better to stick with
     discord that can help people with navigating the ways to minimize IRMAA instead of
     insulting people.

   • powderriver says

     April 22, 2022 at 12:31 pm

     Vince,

     I agree, this is a nice and useful blog. And I personally don’t think it should be infected with unsupported rightwing dog whistles. I fail to see how that is insulting.

     But at the same time, how can it not be INSULTING to many of the readers of this blog, as well as the working poor and middle class, to accuse them of being lazy, couch-bound, stay-at-home Netflix watchers who don’t want to work and think they are entitled to special treatment. I absolutely fail to see how an upper-middle-class person attempting to claim victimhood, while aimlessly slinging that kind of divisive mud, will help readers of this blog to — in your own words — navigate the ways to minimize IRMAA.

     A behaviorally descriptive word comes to mind, but I will not elaborate further.

     But I do congratulate you on your own hard work and hard-won wealth, and on your attempts to minimize IRMAA.

   • Ros says

     April 29, 2023 at 5:29 pm

     To Ernie Kramer,
     16.3% of retirees in 2023 pay IRMAA according to a healthcare site I read today

   • Harry Sit says

     April 30, 2023 at 8:19 am

     Ros – That’s not accurate. 7.4% of Part B beneficiaries paid IRMAA in 2022. See Tables II.B1 and V.E3 in the official 2023 Medicare Trustees Report.

   • Ros says

     April 30, 2023 at 11:38 am

     To Harry’s reply of April 30, 2023.
     Thank you for your information. My information was from a link from a healthcare newsletter link. I read several from Beckers, Kaiser and many healthcare articles written from a google alert on IRMAA and Medicare. Actually from a google alert article is where I found your site. It was also for 2023 figures from people enrolled for the 2023 year with healthcare insurance companies paying Medicare and MA. I don’t know if this included the disabled and other or just seniors.
     I have guests expected for dinner and do not have time to go through the details of your article right now. Thank you for your tables.
     Your 2nd table said that 5.2 million are affected by this and this would be for 2022 figures.
     On a chart for the month by month enrollment for all Medicare in April it was just under 64 million. I was astonished that it was 500,000 less than were enrolled in March.

5. IRMAA Needs to Go says

   September 13, 2019 at 7:50 am

   To be excruciatingly precise, can we state that the bracket amounts (when finalized) for calendar year 2020 will be used with the calendar year 2018 income amount to determine the amount of IRMAA, if any, a medicare recipient would be assessed by CMS/SS during calendar year 2020? Similarly, the CY 2021 bracket amounts would be used with CY 2019 income to determine IRMAA to be assessed/paid during CY 2021?

   Reply

   • Harry Sit says

     September 13, 2019 at 9:58 am

     Yes your AGI plus tax-exempt interest reported on your 2018 tax return (filed in 2019) will be checked against the bracket numbers in the 2020 column to determine the Medicare Part B and Part D premiums you will pay starting in January 2020. My table only showed Part B. Part D uses the same brackets but different surcharges.

   • The Wizard says

     April 22, 2022 at 9:20 am

     “discourse”

   • Vince says

     April 22, 2022 at 12:55 pm

     powderriver,
     I read through everyone’s post on this blog since 2019 and you scare me the most.
     Seems like you have a lot of anger. Maybe switch over to Twitter. I’m still hopeful everyone can work together to make things better for everyone without insults. Let’s stick to the subject and not make political statements going forward. Not fair to Harry to have people
     insulting others.

   • Terry says

     April 22, 2022 at 1:10 pm

     Vince & powderriver, Can both of you please shut up and post only comments that are beneficial. I’m getting tired of your back and forth drivel. I imagine that others are too. Harry Sit has a great blog and you two are posting too many worthless comments.

   • powderriver says

     April 22, 2022 at 3:16 pm

     Vince – If you say that you are scared, that proves you probably should be. Another brick in the ‘victim’ wall.

     Terry – I agree. Now you too can stop your own worthless comments and shut up.

6. sscrla says

   September 13, 2019 at 8:08 pm

   Since the August, 2019 CPI numbers were announced on September 12 and the law says the inflation adjustment is based on “the percentage (if any) by which the average of the Consumer Price Index for all urban consumers (United States city average) for the 12-month period ending with August of the preceding calendar year exceeds such average for the 12-month period ending with August 2006 (or, in the case of a calendar year beginning with 2020, August 2018),” you now know all the numbers. Therefore, there is no need to use the word projected, unless you expect the BLS to revise an already published CPI figure.

   Reply

   • Ken says

     October 31, 2020 at 1:03 am

     The ability to not take the 2020 RMD will also affect your IRMAA calculation for 2022.

   • Rob says

     August 25, 2021 at 10:11 am

     Looking at your 2022 projections you seem to assume bracket inflation of 3%. However latest July 2021 CPI is running at 5.4%. Do you expect the final brackets to increase further before end of this year?

   • Harry Sit says

     August 25, 2021 at 11:39 am

     Rob – The calculation doesn’t just use the latest month over the same month a year ago. It also includes lower numbers from the previous months. We’ll have the last missing number used in the calculation on September 14. Although we can always be surprised, I don’t think this last number will change the projections for 2022.

   • Vince says

     April 22, 2022 at 11:59 am

     Wizard, I chose discord because I didn’t think some can ever agree in harmony but I guess
     we should hope for peaceful discourse. Different world than 50 years ago. I pray that people can work together in the future to make things better for everyone. Harry Sit is very helpful.

   • Vince says

     April 22, 2022 at 1:27 pm

     Terry,
     I apologize. You are right.
     Sorry

7. Harry Sit says

   September 13, 2019 at 9:46 pm

   This was posted on September 3, before the latest CPI release, which now confirmed all the numbers in the table.

   Reply

   • Mary says

     March 8, 2023 at 7:55 am

     You should block any comment that has the words liberal, conservative, politics, etc. so those of us trying to understand the IRMAA and deal with it can make use of this site.

8. CHRIS KELLY says

   September 18, 2019 at 1:09 pm

   What about the 2 years we went from 104 dollars to 136 dollars ? This is monthly. That is 32 dollars a month for 2 years. Do we get reimbursed.

   Reply

9. gary says

   September 19, 2019 at 9:59 am

   i have seen 2 articles that used the cpi and have different results. another article used the same 1.7% and showed the first bracket increasing to 86,000 not 87,000 because 85,000 with a 1.7% increase is 86,445.xx so the nearest number rounded down. So it is already rounded up (87,000) or is it rounded to the nearest 1000 which would mean it shouldbe 86,000?

   Reply

   • Harry Sit says

     September 19, 2019 at 10:07 am

     It is rounded to the nearest $1,000 but the 1.7% number used in the other article isn’t correct. The correct CPI increase to use is 1.9%. When you raise $85,000 by 1.9%, it rounds to $87,000.

10. gary says

    September 19, 2019 at 2:14 pm

    I check the gov’t cpi website and it is showing annual for august of 1.7% is it a different month that is used sep 2018 cpi was 252.146 and aug 2019 256.558 which is 1.7%. is it a different indicator or timeframe?

    Reply

    • Harry Sit says

      September 19, 2019 at 2:17 pm

      See comment #6 above.

11. Marcia Mantell says

    September 28, 2019 at 10:58 am

    There is a typo in your bracket for single filers: second row. Should be above $85k up to $107 (not $170). That also throws off your 2020 estimate. Please correct. Thanks!

    Reply

    • Harry Sit says

      September 28, 2019 at 3:17 pm

      The table is correct. $170k is the threshold for paying 1.4x standard premium for married filing jointly. $107k is the threshold for paying 2.0x standard premium for single.

12. Bob says

    October 7, 2019 at 6:24 am

    I have been paying irmaa for three years and I understand the concept and I can manage my income. I file married/joint tax return. I am currently projecting MAGI of $212,000 for 2019 tax year. How much higher can I push my income before moving to the next irmaa bracket?

    Reply

    • Harry Sit says

      October 7, 2019 at 8:13 am

      The next bracket starts at $218k in 2020. If you add 1.5% inflation, you get $221k for 2021. If you’d like to avoid surprises, you may want to stay below $220k.

13. Sammy III says

    October 11, 2019 at 6:07 am

    When will medicare come out with the final part b premiums and irmaa surcharge for 2020?

    Reply

    • Harry Sit says

      October 15, 2019 at 12:46 pm

      Hopefully soon. They announced on October 12th in 2018.

14. BobH says

    October 14, 2019 at 2:22 am

    We have kept my future wife income below 85K. She will be retiring in Jan 2020 because she has PPO time that will bump her above 85K so we delayed the retirement to Jan 2020. So, could I do a 70K Roth conversions in 2019 which would cause her income to be about 85+70= 155K. Then file the life changing event of not working SSA-44. Her IRA withdrawal in retirement will be about 60K a year normally. If they throw out her salary then we would be below 85K.

    Reply

15. The Wizard says

    October 19, 2019 at 5:50 am

    Nothing wrong with higher income oldies paying a little more for Medicare; I always will be under current law. But it’s good to project your AGI into your 70’s and then not do Roth conversions in your 60’s that are TOO big for your present IRMAA bracket. I call this Levelizing your AGI…

    Reply

    • John Sullivan says

      March 15, 2023 at 7:11 am

      It’s not about “higher income oldies” paying a “little” more – it’s a LOT more – up to 3.4 times the standard rate. Given it’s these people who have paid more into the program over their working years, it’s really insulting to be treated like this. Instead of being giving VIP treatment for helping fund the program, it’s a slap in the face.

      Further – reading the author’s words “In the grand scheme, when a couple on Medicare has over $194,000 in income, they’re already paying a large amount in taxes. Does making them pay another $1,600 make that much difference? It’s less than 1% of their income”. Because they are already paying far more in taxes than others, is not a reason to make them pay even more. I fail to see that logic in that.

16. Rich Tedoni says

    October 23, 2019 at 5:58 pm

    Approximately when will the IRS send the 2018 agi to medicare/SS to determine if there will be an IRRMA

    Reply

    • Harry Sit says

      October 25, 2019 at 8:16 pm

      No idea, but if by the time they charge you the Medicare premium for January they still haven’t figured it out, they will eventually bill you the difference when they determine you are subject to IRMAA.

17. Joe Pereira says

    October 25, 2019 at 6:26 pm

    November 2020 I turn 65 I been getting social security pay from 62, my total income is lower than the normal threshold bracket, however in 2018 I received money from my 401K causing a high income for the year 2018. for 2019 I’m back to a normal income, according to social security my Medicare start in November 1st 2020, I’m a little confused if medicare irmaa
    part B and D surcharge going to apply for the whole year 2020 or year 2021

    Reply

    • Cynthia Siebert says

      January 3, 2020 at 5:53 pm

      I was notified that I will be paying an IRMAA fee starting January 2020 due to us withdrawal from IRA… This was a one time withdrawal! Can I go to SS office in March and show them my income from 2019 is MUCH lower now and get rid of the IRMAA?

    • Harry Sit says

      January 3, 2020 at 7:25 pm

      Just showing it was one-time IRA withdrawal isn’t enough. You need to show one of seven qualifying life-changing events:

      – Death of spouse
      – Marriage
      – Divorce or annulment
      – Work reduction
      – Work stoppage
      – Loss of income from income producing property
      – Loss or reduction of certain kinds of pension income

18. MRO says

    October 28, 2019 at 6:27 am

    I recently started with Medicare and am paying IRMAA adjustments for Parts B and D. I am healthy and do not take any prescription drugs. My premium for Part D just increased as will my IRMAA for Part D as well I imagine. I do not believe in paying the IRMAA penalty (for Part D knowing that I have no choice with Part B) and only wanted to be compliant by taking Part D but am planning on dropping it as my premium increased and my tolerance decreased. My question is if I am not participating in Part D am I still responsible for paying the IRMAA penalty or does it go away as well?

    Reply

    • Harry Sit says

      October 28, 2019 at 2:36 pm

      Medicare Part D IRMAA basically means a higher price for Part D. If you drop Part D you don’t pay it any more. However, if you re-enroll in Part D at a later time, you may pay a permanent penalty based on the number of months you went without it.

      https://www.medicare.gov/drug-coverage-part-d/costs-for-medicare-drug-coverage/part-d-late-enrollment-penalty

19. IRMAAA Need to Go says

    October 30, 2019 at 12:54 pm

    Maybe I missed it in the comments here, but doesn’t the “2020” table at the bottom of this web page https://www.medicare.gov/your-medicare-costs/medicare-costs-at-a-glance prove (finally) that the IRMAA threshold has been announced as $174K for the first bracket above baseline?

    Reply

    • IRMAA Needs to Go says

      October 30, 2019 at 12:56 pm

      Sorry, forgot to mention that you have to click on the Part D in the page to see the rest of the text which includes the tables.

    • Harry Sit says

      October 30, 2019 at 4:02 pm

      Yes! All the other bracket cutoffs match what I had here as well. No idea why they buried them so deeply.

20. Robert Burger says

    October 31, 2019 at 6:45 pm

    IRMAA is not just determined by AGI plus muni bonds. It is actually AGI plus all un-taxed income.

    Reply

    • Harry Sit says

      October 31, 2019 at 7:02 pm

      Not all untaxed income. Untaxed Social Security benefits are not included in the definition of Modified AGI for Medicare. See Table I starting on page 5 of this PDF document:

      The Use of Modified Adjusted Gross Income (MAGI) in Federal Health Programs

21. Ann Brown says

    November 3, 2019 at 12:36 pm

    If the CPI used to determine the percentage increase (CPI-U?) were to show a negative number, would the brackets stay intact or would they be adjusted downwards? I can manage my income but the underlying question is whether I can be assured that the $87K threshhold for single filers would at least remain the same in future years.

    Reply

    • Harry Sit says

      November 3, 2019 at 2:46 pm

      The law only talks about “increase” and “exceed.” I assume it means if the change is negative they will just freeze in place until inflation catches up. We haven’t seen a real example of negative inflation since IRMAA went into effect though.

22. Ann Brown says

    November 3, 2019 at 3:59 pm

    Thank you for your prompt response. I agree we haven’t seen a real example of negative inflation since IRMAA but we are seeing other unexpected financial developments (increasing talk of negative interest rates in the US, for example). The fact that the thresholds are based on events 2 years in the past means that there could be an unpleasant surprise in store at some point.

    We can rail against IRMAA (and I agree with all the comments) and it would certainly be frustrating to fall into the next higher threshold by a few dollars. On the other hand being impacted by IRMAA signals that we have some meaningful/above average level of income. As a 16 year old, I remember complaining to my father about the deductions and taxes in my first paycheck. His question to me: “Would you rather have the income and pay taxes on it or not have it and not pay taxes on it?” In my volunteer work I see seniors who are just keeping their heads above water (for various reasons) so I feel grateful to have an IRMAA concern.

    Thank you again, I appreciate all the great information.

    Reply

23. Han Ngo says

    November 8, 2019 at 6:08 pm

    IRMAA is so confused.
    I am paying IRMAA for my medicare part B. My wife will be eligible for medicare next year, will she pay the same amount of IRMAA as I do? I think for a married couple, they should only pay IRMAA once, not both husband and wife have to pay IRMAA because it counts and is calculated for a married couple. If both husband and wife have to pay IRMAA on each account, is it a double dip?
    Thank you.

    Reply

    • Harry Sit says

      November 9, 2019 at 10:22 am

      If you are married filing jointly, when the joint income exceeds the threshold, both of you will pay IRMAA.

24. Sharon Wallace says

    November 13, 2019 at 12:00 pm

    Why can’t I find out ANYTHING about the Part D IRMAA surcharges for 2020?? I find all kinds of info for the Part B…but not Part D.

    Reply

    • Harry Sit says

      November 13, 2019 at 8:05 pm

      Click on the link in comment #19. Then click on the link at the bottom of that page for Part D.

25. Bob Land says

    November 15, 2019 at 12:30 pm

    What happens if your MAGI drops 2 brackets? Will the tax brackets be lowered two steps at once or one at a time/year in the reduction of the additional insurance premiums?

    Reply

    • Harry Sit says

      November 15, 2019 at 12:39 pm

      At once. Whichever bracket your income two years ago belongs, you pay the corresponding premium.

    • Dave says

      September 2, 2021 at 9:33 am

      To clarify please.Is the 15% of my total SS that IS NOT TAXED,still included in my MAGI total along with the rest of my income to determine if I have to pay more for IRMMA?Thank you!

    • Harry Sit says

      September 2, 2021 at 10:55 am

      Dave – The portion of your Social Security that’s not taxed isn’t included in the MAGI for Medicare IRMAA. See comments 20, 73, 108, and 131.

26. John Tenfelder says

    November 19, 2019 at 2:19 pm

    If I get married in Dec 2019 to a woman who earned less than $80,000 annually in 2017, 2018, and 2019, but I made enough to put me in the IRMAA B/D 320%/574% bracket in each of those years, will she still be charged zero IRMAA or will she be charged in my bracket retroactively for 2019 (based on my 2017 AGI) if we file jointly in 2019? What about 2020 and 2021? Are our then single incomes used?

    Reply

    • Harry Sit says

      November 19, 2019 at 8:49 pm

      Not retroactively. She will pay IRMAA starting in 2021 based your joint 2019 tax return to be filed in 2020, but your IRMAA in 2021 may drop a tier or two based on your married status.

27. Caught in the Middle says

    November 22, 2019 at 1:02 pm

    One thing not mentioned here is if you are married but file separately (and are over the lowest bracket) you have to pay the 3.2 rate regardless of your individual MAGI.

    Reply

28. Planning Stage says

    November 22, 2019 at 7:27 pm

    What if you downsized in retirement and found selling your house left you with enough taxable capital gains to push you into the next IRMAA bracket? I don’t see any option in the appeals process link for such a situation. Would both my wife and I both be penalized for life?

    Reply

    • Harry Sit says

      November 22, 2019 at 8:44 pm

      Not for life. Your higher income in one year only triggers IRMAA for one year. When your income falls back down the following year, you will stop paying IRMAA.

29. Tony Frank says

    November 23, 2019 at 12:22 pm

    Medicare is worse than private industry. Increase monthly social security payments by 1.6% versus 7% increases in Parts A, B and D medicare premiums.
    No wonder so many retirees are or will be eating spam, assuming they can afford it.
    A bunch of predators in dc.

    Reply

    • Travis(FAIR TAX) says

      June 17, 2022 at 11:59 pm

      The fact that this is how our countries leaders treat its elderly population is a shame and a disgrace, it is theft!

30. Linda Somma says

    November 24, 2019 at 2:32 pm

    My husband died in May 2018 and We filed married that year. My Part B/D premium for 2020 will be in the second tier (twice as much as the standard tier) due to higher income.
    In 2019 my MAGI is half of what my husband and I earned in 2018. When I file SINGLE for 2019, I’ll still be in the second tier. is there any reason I should appeal?

    Reply

    • Anna Carlucci says

      November 1, 2020 at 7:06 am

      the first qualifying life-changing event listed to file an appeal of the IRMMA is death of a spouse……seems you can appeal

31. Thomas Schamp says

    November 25, 2019 at 5:02 pm

    There are seven life changing events that can be the basis for an appeal. It’s not clear that you qualify for any of them…

    Reply

32. Sherry Wiser says

    December 1, 2019 at 2:30 pm

    I turned 65 in Oct 2019…I was charged an IRMAA because in 2017 I went over the $85000 AGI. However, that was because I withdrew $50000 to purchase a new vehicle which I had been saving for while I was working. The 2 years before and the 2 years after 2017 my AGI was/is approximately 45,000. Does the Medicare/Social Security Dept. look at your AGI each year? If you are accessed an IRMAA the first year you get Medicare, will you always be charged that IRMAA in the future years? Will my IRS Tax Returns be looked at again for the year 2018 for 2020 Medicare payments and the IRMAA not applied…Or do I need to go to the Social Security office and appeal?

    Reply

    • Harry Sit says

      December 2, 2019 at 12:23 am

      Your income is looked at each year. When it comes down you will stop paying IRMAA.

33. The Wizard says

    December 2, 2019 at 5:29 am

    This is why it’s usually a good idea to “Levelize” your AGI from year to year in retirement, including withdrawals from tax-deferred for Roth conversion…

    Reply

34. Sherry Wiser says

    December 2, 2019 at 5:35 am

    Harry
    Thank you so much for taking the time to answer my question and all of the other questions as well.
    SBW

    Reply

35. Sherry Wiser says

    December 2, 2019 at 5:39 am

    The Wizard
    Thanks for your input…I now realize that I should have done that…25000 in 2017 and 25000 in 2018…However, I was NOT aware that there was a additional charge (IRMAA) if you went over a certain amount. And had no idea that they would go back two (2) years for your AGI.
    Thank you
    SBWiser

    Reply

36. Joe P says

    December 3, 2019 at 1:23 pm

    You charged irmaa for 2019..did you received another letter from SS for the normal amount for 2020 since you income dropped to $45000..
    I’m in the same situation they charge me irmaa for the month of November And December 2019, because I sold some stock in 2017 to buy a home..I hope they look again at my 2018 my income was around $60000 I dont want pay irmaa for 2020 since my income is $60000 ..any suggestions what to do..thank you

    Reply

37. Sherry Wiser says

    December 3, 2019 at 2:58 pm

    Joe P
    I just read my letter from SS and beginning in Jan. 2020, my SS deposit will NOT have the IRMAA deduction. YAY!!! Everything is back to normal.

    Reply

38. Joe P says

    December 3, 2019 at 4:48 pm

    Great that’s good news

    Reply

39. Richard Persram says

    December 4, 2019 at 5:58 pm

    I would appreciate any guidance on IRMAA determination. Is the information SSA provided this morning correct?
    I retired in April of 2019 and started Part B in May 2019. I was immediately hit with IRMAA which I expected and my initial determination was based on 2017 taxes. My income for 2017 through 2019 places me above the IRMAA MAGI limit.
    I called Social Security this morning to gain a better understanding of the IRMAA appeal process.
    I was told that since 2020 would be the first year in which my income falls below the IRMAA limits, I would have to wait for 2021 to file form SSA-44 and if my income was below the IRMAA limit, they would then retroactively credit me my IRMAA payments for the entire year of 2020.
    I thought previous to my call, that I could file SSA-44 now or early 2020 and they would use my 2020 income estimate from SSA-44f for the 2020 IRMAA determination.

    Reply

40. The Wizard says

    December 5, 2019 at 2:55 am

    That info sounds correct and was what I did. I had $35,000 of part-time W2 income in 2016 on top of retirement income which put me in a higher IRMAA tier for 2018.
    I did my taxes for 2017 (with zero W2 income) in February 2018 and then sent in form SSA-44 with a copy of my 2017 form 1040. They accepted that and put me back in a lower IRMAA tier for 2018, refunding the overcharge for the first few months…

    Reply

41. Winston Bowen says

    December 5, 2019 at 4:02 pm

    Harry Sit writes that if your income drops to lower IRMAA brackets you will automatically be dropped into the new category and pay that rate for Parts B and D. I just got my 2020 earnings summary, and while they show the lower MAGI they have kept me and my wife in the previous, higher bracket and show our IRMAA payments at the higher amount. How do we appeal?

    Reply

42. Ken says

    December 10, 2019 at 9:56 am

    I have purposely stayed under the MFJ $170k MAGI to avoid and IRMMA surcharges the past few years of retirement. In 2019, I want to make a larger than usual IRA withdrawal that will bring the MAGI into the IRMMA surcharge category, and I would like to come close to the ceiling for the first level (of 40% B, & D surcharge), which for MFJ has been $214K for several years. It is now dawning on me that there is no place to lookup what the IRMMA $$ brackets will be in 2021, since my reading is telling me that the 2019 one that is published, is not for tax year 2019 MAGI, but is being used for current 2019 year IRMMA surcharges on 2017 MAGI. Does it even make sense that we don’t know the ceiling that will apply in 2021 when they penalize us for our 2019 MAGI, or do I have this wrong???? IF that is true, am I safe, if I stick with the $218K that is announced for 2020 (to be used for 2018 MAGI brackets)? It seems that one should know the different ceilings prior to making a mistake in a current tax year that could bump you into an even higher bracket when assessed 2 years later, or make you go over the ceiling for no surcharge, which has been $170k for me the past few years. I guess I am just figuring out that it is more confusing than I thought. ANY THOUGHTS WOULD BE APPRECIATED!

    Reply

    • Harry Sit says

      December 10, 2019 at 11:27 am

      Yes the 2021 brackets will be for your MAGI in 2019. The numbers should be slightly higher than those for 2020. If you keep your 2019 MAGI under the published numbers for 2020 you should be OK in 2021.

    • Erin Kraus says

      February 15, 2023 at 12:10 am

      Have you considered that politicians may not pass your test:- pigs get fat, hogs get slaughtered. Use the current Irma announced brackets instead of trying to sbcrztch out a few grand in income. Seems this would be wisest

43. brian birner says

    December 11, 2019 at 10:58 am

    I submitted the form SSA-44 to my local Social Security office about three weeks ago. Do you know how long it takes to process this form?

    I had a recent reduction in income. This was in reference to my IRMAA.

    Thank you

    Reply

44. Bob L. says

    December 12, 2019 at 6:31 am

    I am curious that the incremental increase for the top bracket(>750,000) is significantly less the lower ones. I’m guessing that may be because the total amount cannot exceed the average cost of each program. Is that correct?

    Reply

    • Harry Sit says

      December 12, 2019 at 10:13 am

      The shares of program cost paid in each IRMAA bracket are 35%, 50%, 65%, 80%, and 85%. Congress could’ve made the top bracket pay 90%, 95%, or 100% of the program cost but they stopped at 85%.

45. Songbill says

    December 13, 2019 at 12:12 pm

    Yikes! I just learned about the existence of the IRMAA surcharge. We have had our joint MAGI stay under the IRMAA threshold every year since I retired over 5 years ago. However, this year we get to enjoy a one-time-only, unusually massive capital gains on a particular stock we’ve owned for the past 15 years. (Our NYSE-listed firm was bought out by a much larger NYSE firm that paid a total cash buy-out to shareholders rather than offering stock shares conversion, thus we’re experiencing the capital gains — whether we wanted it or not.)

    I’ve looked at your chart and done some computations and can see that I and my wife’s monthly Medicare premiums (+IRMMA) will rise from the standard basic deduction from Social Security benefits ($135 per month per person) to at least $462 per month PER PERSON starting in 2021. Not happy with this discovery but OK, I understand that is what the IRMMA calls for. HERE IS MY CONCERN: After our annual AGI drops back down, for 2020, to the level of just a standard basic Medicare premium, how do I get the SS & Medicare folks to NOT keep taking out $462 per month out of each of our SS benefits during 2022? They do a “two year look back” in doing their calculations, not an annual one, so who should I talk to or what should I do after I file my Federal taxes in 2021, for year 2020, in order to prevent them from taking out the $462 each month for a second full year (2022)?

    Reply

    • The Wizard says

      December 13, 2019 at 1:04 pm

      They do the 2-year lookback thing Every Year.
      So you should just have a single year of elevated IRMAA payments…

46. Doron Steger says

    December 13, 2019 at 12:38 pm

    Do IRMAA Medicare part B charges apply to families in Medicare Advantage Programs?
    Do IRMAA Medicare Part D charges apply to families receiving drug coverage in Medicare Advantage Programs?
    Thanks!

    Reply

    • The Wizard says

      December 13, 2019 at 1:06 pm

      Yes and yes. This is exactly what I have and I will be paying IRMAA “forever”…

47. b. lolr says

    December 14, 2019 at 10:32 am

    I am so confused with IRMAA this year. I want to do a Roth conversion again in 2019, (next 2 weeks) which will put me in Tier 2 of IRMAA in 2021. I am trying to figure out what the MAGI cutoff is for my 2019 tax return so I can determine how much I can convert from Traditional to Roth without going into Tier 3 in 2021. Should I stop at $213,999 or 217,999?

    Any help will be appreciated!

    Reply

48. The Wizard says

    December 14, 2019 at 11:17 am

    We won’t know the tier thresholds for 2021 based on 2019 MAGI until 11 months from now.
    But you can safely get your MAGI up to $218k, MFJ, which is this years threshold.
    Any higher and you’re betting on what next year’s inflation percentage will be. Not good to lose that bet…

    Reply

    • b lolr says

      December 31, 2019 at 8:52 am

      What does MFJ stand for?

    • Ken Fitzgerald says

      December 31, 2019 at 9:24 am

      b lolr, MFJ = Married Filing Jointly (for tax return)

49. Bev Lolr says

    December 14, 2019 at 5:06 pm

    If I can safely get the MAGI to $218K for tax year 2019 and remain in Tier 2, that answers my question. Now instead of staying at $214K for Tier 2, they are going to be inflation adjusted, right? Thanks again.

    Reply

50. Gail says

    December 16, 2019 at 7:29 am

    Can you explain why people collecting social security who are married but file separate returns are penalized with a substantially higher irmaa? For married filing separately, there is no tier 1-2-3, irmaa starts at tier 4? Isn’t this actual discrimination?

    Reply

    • Harry Sit says

      December 16, 2019 at 10:40 am

      When they do something to collect revenue, they don’t want to see it easily defeated by couples rearranging their income and filing separately. Suppose a married couple’s income is $300k. If they file jointly, they will pay $376/month each in 2020. If the couple split their income to $80k for one and $220k for the other, they will pay $144.60 plus $462.70, which is already less than $376 * 2. If Congress didn’t make the higher income person go to tier 4, IRMAA will be defeated even more.

51. Gail says

    December 24, 2019 at 7:58 am

    In my case, i was over the limit by 4000.00, I asked that be used to pay irs taxes on a roth conversion. When they wanted to add almost 400 per month to my medicare costs, i was angry. I do understand your explanation, but I don’t agree. My spouse barely made 50000. So we filed an amended return jointly whech fell well below the limit.
    Thus, instead of collecting an additional 4665.60 (388.80/month) from me they ended up getting no irmaa at all.
    I wish to add that if they had fairly assessed the irmaa at 66.50 per month, I would have paid without question. Social security has always been based on individuals, earning etc, never before has my marital status been used against me.
    There are reasons for filing separate returns that have nothing to do with avoiding taxes. So, I still feel that the assessment of excessive payments to people who file separately to be severely discriminatory.

    Reply

52. The Wizard says

    January 4, 2020 at 5:17 pm

    Looking forward, it’s generally better to withdraw amounts from tax-deferred each year to keep your AGI just slightly increasing and below the next IRMAA tier threshold. As opposed to withdrawing a lump in one year for a large purchase like a new car.
    Good news is, your additional IRMAA amount is for only the twelve monthly payments in 2020, after which it should go away, assuming your 2019 MAGI was low enough…

    Reply

53. IBM says

    January 6, 2020 at 5:05 pm

    Don’t forget to thank President Obama for adding in the Part D IRMMA

    Reply

    • Harry Sit says

      January 6, 2020 at 7:30 pm

      See reply to comment #3. IRMAA came about in 2003, as a part of the law that created Medicare Part D. President George W. Bush signed it.

54. David Taylor says

    January 21, 2020 at 11:26 am

    In their booklet “Medicare Premiums: Rules For Higher-Income Beneficiaries” the Medicare folks claim that only 5% of Medicare recipients quality for IRMAA. But every independent survey of personal income that I can find claims that at least 20% of all seniors make more than $87,000! So, is the government just lying to us, or am I missing something?

    Reply

55. Kenneth Fitzgerald says

    January 21, 2020 at 11:44 am

    Perhaps many of the over $87K retirees you have seen cited in those counts have a spouse who is not in the same category (in the other 80% of retirees), and together they stay under the now $174K Married Filing Jointly limit before IRMMA affects them?

    Reply

56. The Wizard says

    January 21, 2020 at 11:54 am

    I’m not sure how this matters. My AGI is way over the starting point for IRMAA and always will be. So I pay a bit more for Medicare than lower income folks do.
    I’m perfectly okay with that…

    Reply

    • Ed says

      October 5, 2020 at 8:53 pm

      I’m not. Let’s make it voluntary for all you people who feel good because paying IRMAA means you earned more.

    • Marilyn Hitesman says

      June 24, 2021 at 10:52 am

      Big difference between “way over” and “barely over”.

    • Thomas R. Williamson says

      October 23, 2022 at 3:53 pm

      Great to get the irma brackets, but for some odd reason, they did not include the cost for each backet…. Who the hell knows why.

    • GeezerGeek says

      October 23, 2022 at 4:32 pm

      Thomas R. Williamson, the cost for the bracket is a multiple of the Part B base rate which is set by CMS near the end of the previous year. CMS announced on Sept 27, 2022 that the Part B base rate for 2023 will be $164.90. The multiplier the first bracket is 1.4, the second 2.0, the third 2.6, the fourth 3.2, and the top 3.4. If you multiply the base rate by the multiplier for the bracket, you will get the cost for each bracket. The base rate changes (or can change) every year but the multipliers for the brackets are set by law.

57. David Taylor says

    January 21, 2020 at 11:55 am

    You might be right. On the other hand, you shouldn’t be. Those counts just say “individual” income, and to me that means unmarried. If they are indeed including individual incomes within married couples, then that is very confusing. Sigh. That’s the trouble with the three-word data descriptions you find on-line. You are never quite sure what assumptions they are making.

    Reply

    • The Wizard says

      October 23, 2022 at 4:22 pm

      The monthly cost for each IRMAA tier isn’t known until October of the previous year, so next October for 2024 tiers.
      But the multiplicative factors are known…

58. David Taylor says

    January 21, 2020 at 12:12 pm

    To The Wizard: If the percent of seniors affected by IRMAA is really 20% rather than 5%, then the government should admit it. A government that lies is not a good thing. The IRMAA booklet almost apologizes for IRMAA by implying that it is not a big deal because “only” 5% pay it. Is this Truth? Or propaganda? Or imaginative accounting? I’d like to know.

    Reply

    • Ed says

      October 5, 2020 at 8:52 pm

      Doesn’t matter what the percentage is, it’s an abomination of a success penalty. Standard government garbage. Does anyone think a private business could charge wealthy people extra for their product?

59. The Wizard says

    January 21, 2020 at 12:21 pm

    Yes, I completely agree that we want truthful info. The lower IRMAA tiers are x2 for MFJ vs Single so not so hard for them to report.
    But my impression is that Medicare is underfunded, rather than generating a surplus each year. So an IRMAA-like scheme for higher income oldies seems to make sense…

    Reply

60. Larry Burdick says

    February 12, 2020 at 8:35 pm

    I have had a two-year stepdown in terms of retirement and income reduction. I have filed requests for IRMMA reconsideration a couple times and after some hassle, have had both approved. Here is my problem, I filed the paperwork in early 2019 so my wife (the only one of us getting Medicare that year) would have here IRMMA based upon an estimated 2019 income instead of our much higher, preretirement income from 2017. Well, my estimated was between the $170,000 and $214,000 bracket. I was sloppy last year relative to income, and when I did my taxes last week, my 2019 income was $214,023!! Now, not sure what to do. Do I report this or just let it “catch up” to me in the future for the expected payback for the IRMMA required for the next higher bracket. And, I just got them to adjust our premium for 2020 for the estimated much lower income we will have, which I worry will be all fouled up again. Ugh.

    Reply

61. Larry Burdick says

    February 12, 2020 at 8:52 pm

    From Harry (above):
    Yes the 2021 brackets will be for your MAGI in 2019. The numbers should be slightly higher than those for 2020. If you keep your 2019 MAGI under the published numbers for 2020 you should be OK in 2021.

    So Harry, am I okay? Is the $214,000 or $218,000 what is used for 2019 AGI? So confusing . . .

    Reply

    • Harry Sit says

      February 13, 2020 at 11:18 am

      In late 2020, Medicare will announce a new number, which will be used to measure against your 2019 MAGI, to determine how much you will pay IRMAA in 2021. If the inflation is positive, which is usually the case, that number for the second tier should be slightly higher than $218,000. If the inflation is negative, it can also be lower. We don’t know what that number will be until later this year.

62. Tom K. says

    February 22, 2020 at 9:06 am

    More lame fake news from the right. It was during W’s reign, not Obama’s that IRMAA was added. With Trump driving us further into debt, and Congressional republicans too afraid of him to find their spines, be prepared for even more increases in the future, and not just to IRMAA. True facts matter…

    Reply

    • Marilyn Hitesman says

      June 24, 2021 at 10:55 am

      True facts do indeed matter. Trump followed Obama’s lead, to be sure, and dramatically raised the national debt by trillions due to the China virus. Now we have Unemployment as a career, wide open borders, massive “bailout” programs that further the dependence upon government, and nothing to look forward to but the demise of a once great Democratic Republic. This is bigger than politics.

63. The Wizard says

    February 22, 2020 at 4:55 pm

    I’m not sure we care about when or under whose admin that IRMAA got started.
    It’s a good way for us wealthy folks to help the poor people.
    What’s wrong with that?

    Reply

    • Ria jensen says

      September 15, 2020 at 9:28 am

      I personally worked hard to put as much income away as possible in my 401K. I’m a single parent and tax status is the same. My retirement income from former employer plus social security has my earnings at less then 40% of my pre retirement income. I never asked nor received any government assistance, etc during the 48 years I worked. But now that I can fix my home, make travel plans etc I find Im going to pay the IRMAA because I was smart in saving. The amount I’m going to pay has taken away a good portion of my plans. So yes, I have a problem with paying this. I’m not rich, I saved and now I cannot live as I planned in retirement. Not fair to middle class citizens like myself I also pay for supplemental insurance and a drug plan Based upon calculations, I’ll be paying over $700 a month for insurance; that’s insane.

    • Ed says

      October 5, 2020 at 8:47 pm

      Do you really think this helps poor people? You’re fooling yourself.

64. Kenneth Fitzgerald says

    February 22, 2020 at 7:23 pm

    Tom K- I think the earlier poster ‘s comment was that that Obama added the newer Part D surcharge to (the already existing) IRMMA, and not that Obama created IRMMA.

    Reply

65. David Walton says

    March 12, 2020 at 3:50 am

    I retired in 2019 at 65. I am married and my wife and I had enough income to be affected by IRMMA. My wife is younger and continued to work until mid year 2019 when she retired but she is not 65 and is not eligible for Medicare. Our income for 2019 was more than in 2018 due to significant bonuses. In 2020 however we will have significant reduction in income. If I appeal IRMMA now, because of our retirements, would I likely be eligible for a reduction in the premium? In other words would my Medicare premium for 2020 likely be adjusted based on our estimated 2020 income?

    Reply

66. Ken says

    March 12, 2020 at 7:17 am

    My brother had the same problem when he retired in Jan 2018, and it straddled two tax years, in terms of high income in 2017, and again in year he was was retired for 11 months at age 70. He appealed it two times, (for 2019 and 2020 surcharges) and got relief on both. I don’t think you can appeal it until you get the letter telling you that IRMMA has kicked in. For him, it was December of the year before the hike was taking effect, so for you, I guess your first letter will be in Dec 2020, for 2021 IRMMA surchange based on 2019 tax return income. If they already assessed a surcharge for 2020 Medicare cost, based on your 2018 income, before retirement, you should certainly appeal that now, and should have gotten a letter about Dec 2019. No expert here, just going on what I read and heard about it.

    Reply

67. CathyKate says

    April 9, 2020 at 2:41 pm

    I agree with Tom T.
    I don’t understand why married filing separate jumps from the Part D first tier to tier 4. If you make a dollar over $85,000 you are put in a category that goes up to $415,000. If someone could explain that I would surely appreciate it.
    Thank you

    Reply

68. sscritic says

    June 28, 2020 at 9:30 pm

    There is an ACA subsidy. When you make too much, you lose your subsidy. No one calls it a surcharge.

    IRMAA is no different; it is a reduction in your subsidy. All you have to do is read the law:
    “(i) Reduction in Premium Subsidy Based on Income.—
    (1) In general.—In the case of an individual whose modified adjusted gross income exceeds the threshold amount under paragraph (2), the monthly amount of the premium subsidy applicable to the premium under this section for a month after December 2006 shall be reduced (and the monthly premium shall be increased) by the monthly adjustment amount specified in paragraph (3).”

    Reply

69. V.F. says

    July 1, 2020 at 8:16 am

    My spouse died from Covid 19 this year but I will file joint tax return. If I convert a large sum from IRA to Roth IRA it will make my MAGI approach 213K. What will my premium surcharge be in 2022 when I will file as single? Is it $60 if my income as a single taxpayer is less than $109K in 2022 or is it $144.60 because 2 years earlier joint income was 213K, assuming Medicare premiums and surcharges don’t change between 2021 and 2022?

    Reply

70. Ken Fitzgerald says

    July 7, 2020 at 9:01 am

    I found this article had a lot of info about IRMMA. It may help you. Note the IRMMA APPEAL section that may work for you once you get the surcharge notice.
    https://thefinancebuff.com/medicare-irmaa-income-brackets.html

    Reply

71. Vince Pellettier says

    August 13, 2020 at 1:27 pm

    Was your column updated for new cpi-u figures on August 12,2020? You said 2021 brackets should be $88k/$176k because of rounding up each $1000 but I’m thinking there maybe won’t be an increase from $87/$174. Someone said they are now using chained (c-cpi-u) instead of cpi-u. Do they also use seasonally adjusted cpi? I guess there’s one more month of figures so nothing is definite but we are at $174,174 for income 2019 so I’d like to see a little increase. I wish it wasn’t rounded up by $1000 because they may not adjust anything is there is just a small increase.

    Reply

    • Harry Sit says

      August 13, 2020 at 1:43 pm

      The July CPI released on August 12 didn’t change the projections. Even if the August CPI goes back to the low seen in April, the first bracket for 2021 will still be $88k/$176k.

72. MJM says

    August 18, 2020 at 12:23 pm

    When during the year do IRMAA adjustments occur (January 1 or based on my initial Medicare sign-up date)?

    Reply

    • Ken says

      August 18, 2020 at 12:53 pm

      The IRMAA surcharges are by calendar year starting in January. Tha date you started is immaterial.

73. Eric says

    August 29, 2020 at 7:12 pm

    Is the non-taxable portion of social security benefits included in MAGI? I see contradictory information on the internet.

    Reply

    • Harry Sit says

      August 30, 2020 at 8:29 pm

      The non-taxable portion of Social Security benefits is not included in the definition of MAGI for Medicare. See reply to comment #20.

74. Vince says

    September 11, 2020 at 6:30 am

    The CPI-U figures came out an hour ago at 1.3% so can you know calculate exactly what the new high income brackets will be for 2021? Would you take $87,000 x 1.3% = $1131 and $88,131 ($88,000 rounded down)? And thus $176,000 for joint?
    Or do you have to wait for more info from the government? Thanks Harry

    Reply

    • Harry Sit says

      September 11, 2020 at 7:56 am

      The latest CPI data point confirms the numbers in the blog post. The first tier for IRMAA in 2021 will be $88k for single and $176k for married filing jointly, based on income in 2019.

    • vince says

      October 7, 2020 at 3:17 pm

      I was reading about this on another blog and they said something about comparing the 12 month August 2020 inflation figures released on 9/11/20 to a different 2018 baseline for the true income tier levels that will be released next month. Harry do you know about the inflation adjustment code they are referring to? Are you 100% confident on your $88k/$176k figures?

    • Harry Sit says

      October 7, 2020 at 3:25 pm

      I’m confident in the numbers. See comment #6 for the calculation method.

75. Carl Widerquist says

    September 16, 2020 at 2:49 pm

    So will the MFJ 2020 income bracket of $272000 definitively go to $27200 X 1.3% = 275536 and then be rounded up to $276000 for 2021? Thxs

    Reply

    • Harry Sit says

      September 16, 2020 at 3:34 pm

      It’s not exactly calculated that way, but yes the limit for the third tier in 2021 will be $276,000 (based on 2019 income), as shown in the table.

76. Regina C. says

    September 29, 2020 at 9:59 am

    Why are IRMAA surcharges based on cliff thresholds, rather than going along the lines of IRA marginal tax rates? Just because you went over $1 and now you are in the next IRMAA bracket for Medicare Part B as well as Part D Premiums is TOTALLY shocking. even though it is for one year!
    Any chance of this being changed in the future?

    Reply

    • Songbill says

      September 29, 2020 at 11:04 am

      It’s because you are wealthy and can afford it. Politicians who passed the IRMAA law demand that you pay your “fair share”. Very, very few people are affected so that’s why the cliff is “fair”. My wife and I (in our 70’s) are having to fork over 40% of our total Social Security payments this year (through automatic deductions) because we just missed an IRMAA cutoff level. If the Federal Income Tax rates had these cliffs, taxpayers would go bezzerk. But Congress would never enact them because they’d get run out of office.

      Will Congress get rid of the IRMAA cliffs? No.

77. Terry says

    October 5, 2020 at 4:42 pm

    As a Medicare broker, I consider this a penalty to those who’ve worked hard, saved, invested and provided a wonderful lifestyle for themselves and their families.

    It’s so hard to explain to people that it’s anything other than a “good job!” penalty.

    Reply

    • Ed says

      October 5, 2020 at 8:42 pm

      How true. Nothing like penalizing success.

    • Walt says

      October 19, 2020 at 7:27 am

      Good points, other than the “working hard” part. People here in Houston who put roofs on houses in the hot summer sun work as hard, or harder, than people who make considerably more money. It is definitely not a tax on “working hard.”

78. Ed says

    October 5, 2020 at 8:40 pm

    The whole IRMAA thing infuriates me. The concept is just so much bull excrement and the execution (the $1 trigger) just adds insult to injury. Only a government bureaucrat could have dreamed that one up. If a person is subject to IRMAA they probably had high earnings while working and therefore paid far more than average in a Medicare taxes. Seems like double taxation or a good imitation of it. The only silver lining is when you turn 70 1/2 you can make your charitable contributions with Qualified Charitable Distributions, QCDs, from your IRA. They don’t increase your MGI. My great conservative Congressional delegation isn’t interested in doing anything about it. Neither is AARP or AMAC. So much for supporting their membership. Nor is my former union which has a lot of members who will ultimately be subject to this ridiculous law/theft. For those who are happy to pay it as it means they had a high income my tax accountant friend had a stronger term than bull excrement.

    Reply

79. Carl says

    October 7, 2020 at 5:22 pm

    Thank you for the response to #75. You stated that the number $276000 is correct but the calculation used was not correct. Since I will likely be going through this exercise every year, would you please give me the correct calculation. FYI, I reviewed point 6 several time but frankly I still do not understand what I did wrong. Thanks in advance.

    Reply

    • Harry Sit says

      October 7, 2020 at 6:15 pm

      Get 12 monthly CPI-U numbers (not seasonally adjusted) from September last year to August this year. Add them up and divide by 12 to get the average. Get monthly CPI-U numbers from September 2017 to August 2018. Add them up and divide by 12 to get the average. Find the increase between the two averages. Find the 2019 IRMAA thresholds for single – $85,000, $107,000, $133,500, $160,000, $500,000. Adjust those (except the last tier) upward by the increase. Round the numbers to the nearest $1,000. Double the numbers for Married Filing Jointly (again, except the last tier).

    • Vince says

      October 7, 2020 at 8:31 pm

      So if you calculate the 9/17-8/18 average it’s 249.28 and the 9/19-8/20 average is 257.72 the difference is 8.44 which is 3.38% increase. $87,000 would increase 3.38% doesn’t seem right. It would be nice to see the proper calculation using this year’s numbers so we know what to expect next month when they release the written statement.

    • Harry Sit says

      October 7, 2020 at 8:58 pm

      $87,000 is the first tier threshold for 2020. You need the numbers for 2019.

    • Vince says

      October 8, 2020 at 8:10 am

      So you would use the $85,000 from 2019 and multiply it by 3.38% which gives $2873. That means rounding up to $3000 and adding it to $85,000 gives $88,000 for 2021 not your figure of $87,000.

80. Carl says

    October 8, 2020 at 6:30 am

    Harry,
    I got it now! Thank you very much for taking the time to explain this. It will make future years much easier to forecast and plan.

    Reply

81. Vince says

    October 8, 2020 at 8:20 am

    Harry I’m sorry you had $88,000 for 2021. My fault.

    Reply

82. Vince says

    October 13, 2020 at 8:50 am

    Does anyone know when the government will officially announce the lowest brackets will be $88,000/$176,000? And also, when they will announce what the 2021 medicare premiums will be? Last question, does anyone know if the brackets could ever go below $85,000/ $170,000 in the future with deflation?

    Reply

83. Debbie says

    October 20, 2020 at 5:34 pm

    I am relatively new to Medicare. I understand it to be a National Health care program for people over 65. Single or married should be the only two factors in determining the monthly fee. Apparently either the govt or Medicare decided that people over 65, who make over a certain salary must get sick more often, therefore, are being charged an addl fee called IRMAA. This is a disgrace. Someone’s salary should not even come into play when determining the cost for health care. Would love to know what medical Dr. made that decision (ha)!!! Basically the Medicare book should read that people making over a certain salary are required to help pay medicare costs for others since that is what is actually being done.

    Reply

84. Grumpy says

    November 4, 2020 at 2:57 pm

    IRMAA is assessed on your income tax filing. If you file married/ joint then the income threshold is 2X the single threshold. So if one spouse has 90K of income, and the other has 84K (or less) then neither hits the IRMAA; as on average each has an < = 87K income.

    Reply

85. vince says

    November 6, 2020 at 2:09 pm

    Looks like Medicare just announced the irmaa income brackets for 2021 and Harry Sit was exactly right $88,000/ $176,000. I’m still waiting to do Roth conversions and/or stock capital gains this year until I get more info on future irmaa bracket possibilities. Not sure if they can dip below $85,000/ $170,000. It would be nice to know that 2022 would be above the 2021 brackets $88,000/$176,000.
    Very frustrating not knowing the figures until it’s too late to adjust income.

    Reply

    • Vince says

      November 7, 2020 at 6:29 am

      One financial advisor said the 2022 brackets could vary from $168,000- $178,000 for joint filers. That’s a big difference and makes it hard to plan income this year (2020).
      Harry, can you provide any input to this? Is $170,000 the floor and brackets can’t go lower?

    • Harry Sit says

      November 7, 2020 at 6:46 am

      Right now we only have one data point out of 12 to calculate the brackets for 2022. It’s way too early to have an accurate projection. If I must guess, the range for the first tier will be between $88,000/$176,000 (no change) and $90,000/$180,000, with the most likely scenario in the middle, i.e. $89,000/$178,000.

    • Eric says

      November 7, 2020 at 6:50 am

      Is it possible for the brackets to go down from one year to the next?

    • Harry Sit says

      November 7, 2020 at 7:01 am

      It’s possible to go down if we have bad enough deflation. If inflation is lower than -3%, the 2022 numbers will go down from the 2021 levels.

86. Songbill says

    November 6, 2020 at 4:29 pm

    In reading about the COVID-related “hold harmless” provisions for new Medicare premiums for 2021, as enacted by Congress and signed by the President last month, my understanding is that premium annual adjustment is limited to 25% of what it otherwise would have been for 2021. However, I can’t find any articles that answer the question of whether this applies to all brackets, including the IRMMA ones, or just the basic premium tier. Anybody know?

    Reply

    • Harry Sit says

      November 6, 2020 at 5:07 pm

      The 2021 Medicare Part B premiums for different brackets are here:

      https://www.medicare.gov/your-medicare-costs/part-b-costs

      I suppose these published numbers already took the new law into account. In other words, the premiums would be higher otherwise. Because the premiums for higher tiers are a multiple of the standard premium, when the standard premium is lower, the premiums for the higher tiers are also lower proportionally.

    • Wizard says

      November 6, 2020 at 5:19 pm

      This probably means that Medicare premiums for 2022 will be going up 75% more than normal.
      Tighten your seatbelt a year from now…

    • Songbill says

      November 6, 2020 at 7:00 pm

      @ Harry,
      Yes, looks that is the case. Basic tier is rising 2.8% and IRMMA brackets are also at 2.8%. Before the “hold harmless” enactment last month, the increase was going to be $20 instead of $4 at the basic tier. That a 75% reduction to your rate increase for 2021.

87. Rick Craven says

    November 10, 2020 at 12:04 pm

    Advise needed – In Sept. of 2018 I retired and started taking social security benefits. In 2019 I took out a large amount of money from my mutual funds that I had saved throughout my working career to put a down payment on a house to live in when I retired. Before that I was living with my sister. My taxes return for 2019 of course reflected an inflated amount of income which in turn flagged Social Security that I must pay The IRMAA Medicare B and IRMAA Medicare Drug costs (Approx. $270 additional charges being deducted out of my social security check each month). This additional amount will start being deducted in Jan. of 2021 for a full year. This has caused a large financial hardship on me that jeopardizes me from keeping my newly purchase home. My true income is really approx. $51500 gross per year. Wanted to know if I can have them waiver this IRMAA from being charged to me because of the one-time purchase of a home to live in? This seems so unfair and unethical of what the government are imposing on me. Thank you so much for your help in this matter.

    Reply

    • The Wizard says

      November 10, 2020 at 5:59 pm

      Sorry, you’re SOL on this one.
      It would have been much better to have taken out a modest mortgage on the property instead…

    • Songbill says

      November 10, 2020 at 6:28 pm

      If it’s any consolation, you are not alone. I think there are probably many retirees with modest incomes who get unexpectedly smacked by a huge IRMMA because they experience a one-time only large gain event. Sometimes the gain was built up over a period of a life time. I had never even heard of IRMMA. My wife and I live on income from Social Security and a modest monthly pension. Last year, a company in which we had owned stock for several decades was bought up by a large conglomerate. We bought shares years ago when the stock was very cheap and the firm then had great success. Unfortunately, the conglomerate paid out cash in a lump-sum rather than issuing equivalent shares in their firm. We had no say in the matter. Now we are faced with losing over $700 PER MONTH in Social Security next year. I don’t think Congress intended for modest income retirees to have a life time of saving get whacked by IRMMA….. but that is exactly what is happening to a number of us.

    • Harry Sit says

      November 11, 2020 at 1:17 pm

      Think of it as part of the capital gains tax. $270/month for 12 months is $3,240. It’s 4% on say $80k worth of capital gains. If you borrowed extra $80k in your mortgage you would pay about that much interest in the first year. If you had to pay that $3,240 as part of your capital gains tax, maybe you would’ve been OK with it. You pay the tax after realizing gains from many years of investing. Framing it as an additional Medicare premium two years later just makes people mad.

    • Roger says

      November 16, 2020 at 3:01 pm

      It can’t hurt to file with the SSA for an appeal. In the year (2018) we retired, our income put us in an IRMAA bracket (by getting paid for a lot of unused vacation time). We appealed and explained it was a one-time “bump” and our income was below the IRMAA limit without it. They agreed and refunded the IRMAA overage. This year, thanks to the elimination of the Required Minimum Distribution, we lowered our income to below the IRMAA limit. So, I guess we’re safe until 2022.

88. Katherine says

    November 11, 2020 at 7:47 pm

    Hello, I had a higher income in 2019 because I sold a rental house. I reported on my 2019 income tax and I submitted to IRS before April 15, 2020 (even though the IRS extended deadline due to COVID). As of today, Nov 11, 2020, I haven’t received any notification of my IRMAA premium increase for 2021. I also looked on line at Social Security site and it did not have my 2019 income. Is IRS behind in reporting and processing? Can this IRMAA increase for 2019 income not be reflected until 2022 instead of 2021?

    Reply

    • Harry Sit says

      November 11, 2020 at 8:23 pm

      If you filed on paper, the IRS is backlogged. You can check the IRS Where’s My Refund site to see the latest status. Eventually, they’ll catch up and bill you. They won’t push it to 2022.

    • Katherine says

      November 12, 2020 at 2:35 am

      Hi Harry,
      I did TurboTax and filed 2019 electronically. I did not have a refund coming. I did over estimate my 2019 taxes but ask that the overage be applied to 2020 not refunded. I still am not understanding why I haven’t received IRMAA notification because in TurboTax it says my return was accepted by the IRS just a day after it was filed back in April 2020.
      I guess I don’t want any surprises and thought I would have been notified by now about the increase in the premium that will come out of my social security starting Jan 2021 for both part B and D.
      I am like many people, I feel this is an injustice to the hard working people who have scrimped and tried to save….never had a vacation because could not afford it. Tried to take care of what money I made and prepare for the future. Never on the government dole and now penalized for trying to be responsible and take care of myself. Never made over $48k a year when working. Sorry for the soapbox but I am very unhappy with this unfair tax on seniors.

    • Harry Sit says

      November 12, 2020 at 8:38 am

      Even though you aren’t getting a refund, you can still use the “Where’s My Refund” tool to check on your tax return processing status. You can also use the IRS Get Transcript tool to confirm the return they received matches the one you filed. I filed in April and I have 2019 income in my Social Security earnings history already. Something went wrong if you don’t have yours.

89. The Wizard says

    November 12, 2020 at 4:48 am

    Perhaps don’t think of IRMAA as a tax on us, but rather, as a discount system for poor seniors.
    Are you ok with giving low-income seniors scrimping by mostly on SS a discount?

    I pay around $380/month for Part B and am ok with it…

    Reply

    • Katherine says

      November 12, 2020 at 5:34 am

      Mr. Wizard, I would rather have the option to opt out of Medicare all together. I would like to be able to make my own decisions on how I handle my healthcare. Yes, I believe in helping those less fortunate but when I see the abuse and corruption of the system, it makes me sick. Clean it up and get those off the system that are exploiting it.

90. Ed says

    November 12, 2020 at 11:07 am

    “ I am like many people, I feel this is an injustice to the hard working people who have scrimped and tried to save….never had a vacation because could not afford it. Tried to take care of what money I made and prepare for the future. Never on the government dole and now penalized for trying to be responsible and take care of myself. Never made over $48k a year when working. Sorry for the soapbox but I am very unhappy with this unfair tax on seniors.”

    I agree, both in what it is and especially the way it is implemented. $1 of income can trigger the entire penalty premium. What can be fair about a system with taxes over 100% of marginal income?

    Reply

91. ed 2 says

    November 22, 2020 at 2:58 pm

    Just looked at my 2021 benefit statement. It says IRMAA was based on 2018 income tax form, not 2019 as you suggest. Why?

    Reply

    • Harry Sit says

      November 22, 2020 at 9:00 pm

      Log in to your Social Security account and see if they have your 2019 income. Also see comment #88.

92. Ken says

    November 22, 2020 at 3:03 pm

    I downloaded my 2021 report yesterday, after getting email from SSA that it was ready, and it said 2019 income and quoted the income figures from that 2019 tax return. I am paying IRMAA in 2021, as I had expected.

    Reply

93. CathyKate says

    November 23, 2020 at 7:53 am

    I agree with Katherine and Ed. I too am not poor, but certainly not rich. I filed Married Separate one year because my husband and I are both retired teachers in Missouri and our state tax break is better if we file separately. I was shocked when I was just a bit over the $85,000 limit and found myself skipping all of the tiers down to the last tier that put me in the same category as people making over $400,000. The explanation is that a couple can manipulate their income between the two of them, but we didn’t try to do that. We both have a set retirement. So now we file joint but have to pay more in state income tax. I wish that “file separate” would have the same incremental tiers as the other brackets.

    Reply

    • Katherine says

      November 23, 2020 at 8:22 am

      CathyKate, it is very disheartening. If I had known about IRMAA I would have sold my rental house prior to going onto social security. That rental property was for my retirement and I was really surprised about the Part D IRMAA. I am not on any medications (and very fortunate that I am healthy) but feel penalized that trying to maintain a healthy lifestyle, so now I have my notice from Social Security that they will be taking 51.20 for Part D besides the Part B increase. I know that there are comments that we are helping the less fortunate, but there are many ways to help without taking our hard earned money. The waste and fraud is infuriating. For 2021 I am going to have to watch everything I spend because of the decrease in my Social Security. Someone suggested that I file an appeal for the one-time bump in our income, but my letter from Social Security said if it is capital gains, there will not be any adjustment made. So my husband and my income will be reduced total of $577.60 a month.
      The government is slowing trying to do away with the middle class…..

94. Bev Lolr says

    November 26, 2020 at 1:15 pm

    I am trying to figure out a Roth conversion amount for 2020 tax return. How high in AGI can I go and stay in the second tier for 2022? Thank you!

    Reply

    • Harry Sit says

      November 27, 2020 at 10:50 am

      It’s not possible to have an accurate projection for 2022 at this time. It’s safer to use the 2021 levels as estimates for 2022 (even that isn’t 100% safe in case we have large deflation).

95. Bev Lolr says

    November 27, 2020 at 12:54 pm

    Does the government provide these tiers by the 2020 tax year end? Sure makes tax planning a gamble. What were the 2021 levels that may or may not be safe. Thank you so much for any guidance you may provide. I’m not the only one in this pickle barrel. Thank you

    Reply

    • Harry Sit says

      November 27, 2020 at 1:08 pm

      The government provided the 2021 numbers only in early November 2020. The numbers are in the table in this post, and also in the link in the first sentence. The official 2022 numbers will come in late October or early November 2021. I’ll have a good projection for 2022 by summer 2021.

96. Ken says

    November 27, 2020 at 1:05 pm

    I posted this link a while back as comment #70. It shows the brackets for 2021 surcharges from 2019 income levels. https://thefinancebuff.com/medicare-irmaa-income-brackets.html

    Reply

97. Ed says

    November 27, 2020 at 2:15 pm

    Aren’t 2022 numbers in 2021 of no use since we are trying to budget for 2020?

    Reply

    • Harry Sit says

      November 27, 2020 at 3:01 pm

      If you must have the precise numbers for 2022 before the end of 2020, no one can provide them. I see comments from summer 2020 when I had the projection for 2021 numbers. They must have found the numbers of some use.

98. Ed says

    November 27, 2020 at 6:02 pm

    Ultimately the only thing that can be said is this is absolutely ridiculous? Only a damn bureaucrat could come up with IRMAA and it implementation.

    Reply

99. The Wizard says

    November 28, 2020 at 3:52 pm

    It’s true that we don’t know for sure if IRMAA thresholds can decrease in years with deflation rather than inflation.
    SS payments cannot, so that gives me a bit of hope.

    Anyhow, in reply to Bev on figuring how much to Roth convert for this year, 2020, I’d recommend looking at the threshold amounts for next year, 2021, based on 2019 income.
    2nd tier goes from $88,001 to $110,000 for 2021, so I would be comfortable Roth converting up to a MAGI of $108,000 this year, about $2000 less than the threshold.

    This is basically what I’m doing for the tier I’m in…

    Reply

100. RL says

     November 28, 2020 at 11:34 pm

     My problem is that due to a one-time capital gain in 2018 we paid a large IRMAA this year…..Our income returned to normal and we filed a 2019 paper return in July, but since it’s still not processed and is missing from our transcript, the IRMAA is still based on the 2018 return….How hard will it be to appeal without the processed return?

     Reply

101. The Wizard says

     November 29, 2020 at 3:21 am

     Very easy to appeal with SSA-44, just include a copy of both sides of your 2019 form 1040…

     Reply

102. TwoGeezz says

     December 3, 2020 at 6:58 pm

     Harry Sit:
     In post 21 you state “The law only talks about “increase” and “exceed.” I assume it means if the change is negative they will just freeze in place until inflation catches up. ”

     In post 61 (and subsequent posts) you state specifically that deflation can result in a reduction in the tier thresholds.

     Did you come upon more recent information that indicates a reduction in the tiers with negative CPI?

     Thanks for a great thread!

     Reply

     • Harry Sit says

       December 3, 2020 at 9:33 pm

       My interpretation of the wording in the law is that they can go down year to year but they can’t go below the 2019 IRMAA thresholds, from which all the increases are calculated. See comment #79. If there’s deflation, as long as the numbers are still higher than those in 2019, it’s still an increase from the base levels. Of course because we haven’t seen deflation no one knows how the government will do it when it really happens. Maybe they won’t let them go down year to year. I say prepare for the possibility the numbers will go down. If they don’t, be pleasantly surprised.

     • TwoGeezz says

       December 4, 2020 at 5:33 am

       Great explanation! Didn’t catch that baseline number.

103. bev lolr says

     December 12, 2020 at 8:48 am

     IRMAA is so confusing. Can you please tell me what the 2019 tier numbers are for me to safely use in calculating a Roth conversion to take now for tax year 2020. The deflation scare is real. I looked at #79 but still unsure. Thank you.

     Reply

     • Harry Sit says

       December 12, 2020 at 1:56 pm

       The 2019 numbers were:

       Single: $85,000, $107,000, $133,500, $160,000, $500,000.
       Married Filing Jointly: $170,000, $214,000, $267,000, $320,000, $750,000.

104. Ken says

     December 12, 2020 at 2:16 pm

     Harry,
     I think Bev is asking for advice on her current tax year 2020 with an eventual 2022 surcharge, and wants you to relist the recently announced (which you estimated in July and were correct as I recall in your post 79?) tax year 2019 and IRMAA surcharge levels for 2021 medicare year came out from Soc Sec, which are the newest real levels to go by when guessing what they will be for the year 2020 in advance. These figures you just quoted look like 2017 tax year and surcharge levels for 2019 medicare year. I thought level 1 surcharge peak (in 2021 for 2019 income) for MFJ category was $222K as one example, and not $214K. I could be wrong.

     Reply

     • Harry Sit says

       December 12, 2020 at 8:05 pm

       The 2021 numbers are already in the main body of this post. The very purpose of this post is to keep track of the numbers for next year. The 2021 numbers are probably good enough as a floor for 2022 but you never know how inflation or deflation plays out. The 2019 numbers are the baseline from which all future increases are calculated. If someone wants to be extra safe, use the 2019 numbers.

105. Ken says

     December 12, 2020 at 2:21 pm

     https://www.medicare.gov/your-medicare-costs/part-b-costs

     Reply

106. Bev says

     December 12, 2020 at 9:02 pm

     Are these from the 2017 AGI numbers on income tax return s for the 2019 IRMAA subsidy, or, are these the 2019 AGI income tax numbers for 2021 IRMAA. Are you saying that the tiers are the same as 2017 used for 2019 IRMAA? That is my question. Thank you.

     Reply

107. Ken says

     December 13, 2020 at 7:34 am

     Bev,
     If you click on the link I posted above in #105, it lists the levels by year, noting the tax year and the related surcharge for Medicare year. Pick the one you want to review. I think it is the second table, with the green 2021 (surcharge year) for 2019 income tax returns.

     Reply

     • bev says

       December 13, 2020 at 10:25 am

       Thank you so much Ken. I checked it out. Here is another relevant link but still confusing. https://www.investmentnews.com/medicare-irmaa-surcharges-to-be-adjusted-for-inflation-in-2020-81325

108. David JOEL says

     December 17, 2020 at 10:02 am

     You didn’t mention that IRMAA MAGI includes untaxed social security income. In our case that is over $6000 per year so one needs to be careful not to cross a IRMAA bracket because of that MAGI add-on

     Reply

     • Eric says

       December 17, 2020 at 10:13 am

       What do you base that on? I don’t think that is accurate.

     • Harry Sit says

       December 17, 2020 at 10:29 am

       The MAGI for IRMAA does NOT include the untaxed Social Security benefits.

     • Ed says

       December 29, 2020 at 10:51 am

       I think the confusion comes from there being more than one MAGI. The Medicare one is different from the one used for the Affordable Care Act. ACA uses the untaxable SS income but Medicare does not. It would help help if when they are discussed it would be stated as “Medicare MAGI” or “ACA MAGI”.

109. Ken says

     December 17, 2020 at 10:46 am

     Thank you, Harry! That put a scare into me after making a year end withdrawal that took me up close to max of MFJ surcharge level 1. I used the same logic of what is said in this 2020 SSA doc last year to compute MAGI for 2019 tax year, when I also did year end withdrawal that took me close to the max on surcharge level 1 on my 2019 tax year return. This SSA website page restates method I used for MAGI calc for 2019 and 2020 tax years.
     https://secure.ssa.gov/poms.nsf/lnx/0601101010

     Reply

110. George says

     December 27, 2020 at 10:59 am

     if 2020magi would mean you be in a higher irmaa bracket for 2022 year because of a gambling one that put you just over the limit. but if taxes are filed really late for example in November, would medicare still use the 2019 return and if so, once the 2020 was filed (for example in december of 2021) would medicare still adjust for irmaa for 2022?

     Reply

111. The Wizard says

     January 9, 2021 at 2:00 pm

     Bobby!
     Long time no see!
     How’s chess going lately?
     Good times with Boris or this new guy Magnus?

     Let us know; we’re cheering for you as always!!!

     Reply

     • Vince Pellettieri says

       January 9, 2021 at 2:13 pm

       Glad for your comical response. My response would have been different but I made a New Year resolution to eliminate political statements.

     • Ed says

       January 9, 2021 at 3:58 pm

       Bobby Fischer, please define “fair share”.

112. Seattle Sue says

     January 17, 2021 at 4:48 pm

     Thank you for a terrific and informative column. I retired in 2019 and appealed
     our IRMAA income for 2020 and again for 2021 due to the drop in income due to retirement. Both appeals went smoothly (the first was an in-office visit and second was by mail this past December) and were granted. The 2020 appeal was based on our declaration our income would be under the 2019 threshold of $170,000. Although I carefully controlled taxable income to fall under that level, I forgot a taxable state tax refund that raised it to just over $170,000. Although we can use an IRA contribution to lower our joint income below $170,000, I’m trying to figure out if the government will use 2020’s newer $174,000 threshold for confirming we really qualified? Or whether we still have to stay under 2019’s $170,000 threshold which was used for the appeal? Any thoughts on this? And again, thanks for a great column and further support of your readers.

     Reply

113. Paul says

     February 15, 2021 at 9:23 am

     Does anyone know of some good IRMMA calculators that will allow me to include all income and assets that will cause an increase in Medicare cost; one that gives me a total estimate to say age 90?

     Reply

     • The Wizard says

       February 16, 2021 at 2:01 am

       It depends partly on your present age.
       I’ve just been using a spreadsheet, customized to my own situation, which projects my AGI year after year. I update my spreadsheet with actual numbers each January.
       I expect to be in the middle of the IRMAA tiers forever…

114. The Wizard says

     February 18, 2021 at 7:13 pm

     Wait. Watch out!
     We could be dealing with a Republican here!

     Reply

115. Gaey says

     February 18, 2021 at 8:26 pm

     Folks stop acting like children. What nonsense on a finance thread. Just unsubscribed to this post because of all the bs. Both are right and wrong as both are corrupt parties that act like cults. And you just proved it

     Reply

116. The Wizard says

     March 9, 2021 at 4:13 pm

     Replying to Tanya, your 2018 withdrawal set your IRMAA tier for last year and your large 2019 withdrawal set it for this year.

     So it’s quite possible you will revert to a lower IRMAA tier next January.

     Be smart and learn how to play the system. Taking a mortgage and paying it off over four years might, I say MIGHT, have been a better idea…

     Reply

117. Art says

     March 20, 2021 at 7:44 am

     I retired in the middle of 2019, but an accrued annual leave payout + partial pension meant my income didn’t drop significantly that year. The WEP (“windfall profit”) penalty kicked in when my pension started, so I also lost 56.5% of my social security in late 2019. Should I include both of these as 2019 “lifetime events” when submitting a request for recalculation of my IRMAA ? I believe the monetary recalculation should be based on my 2020 MAGI ( which is approx 20k less than 2018’s, and approx 13k less than 2019’s MAGI).

     I started medicare B in Jan 2020 and paid the IRMAA based on my 2018 (working) income. Now, even tho my 2019 income is lower than 2018, it appears my 2021 IRMAA assessment has gone up by approx $600 … not sure why, as I’m still in the same tier. I was about to inquire about this discrepancy, but realized it may be moot since my 2020 income — the first to significantly reflect my retirement— is low enough to put me into the next lower tier. I think I need to ask them to base my 2021 IRMAA on my 2020 MAGI … but my “life events” took place in 2019 — even tho they didn’t significantly affect my IRMAA income until the following year. I’m confused about whether I should submit proof re retirement from the year prior to my filing for Medicare, or if I should submit 2020 info, since it was the first year my income dropped me to a lower tier. I also don’t know if the drop will affect 2021 IRMAA only, or if it will be retroactive to 2020 and generate a refund . My estimated 2021 income will be slightly lower than 2020’s, but not enough to move me to an even lower tier).

     Hard to get SS on the phone, and I find the form confusing, so any pointers you can offer would be appreciated. I’d like to have info prior to speaking with SSA , so as to have a better idea as to whether they’re telling me the right thing.

     Very helpful column, thanks!

     Reply

     • Art W says

       June 3, 2021 at 3:56 pm

       Just an update: reached my local office by phone and after a few attempts, ended up speaking with a specialist who was able to take my updated 2020 MAGI info over the phone ( after I had to swear I wasn’t lying!). I didn’t need to submit forms, just a copy of my 1040 tax return for 2020. There was some confusion about a part D IRMAA ( I don’t have part D medicare coverage, so ultimately medicare said it didn’t apply). All told, it was a relatively painless process and I’m very impressed by their efficient and speedy resolution. Within 10 days I got a refund of the overpayments in 2021 and the calculated adjustment to the IRMAA will save me approx $90 a month.

118. Thomas Settefrati says

     March 22, 2021 at 12:02 am

     I’ve been retired for 8 years and my wife is still working. I spend all day at a local Casino to play slot machines with the “Free Play Cash Coupons” they send me, out of boredom. So, many times during the 2019 year I hit Jackpots of several thousand dollars but never left the Casino with the money. I always put it back in until it’s gone. An example is , if you win an average of a thousand dollars a day like I did, but played it all back in everyday and lost it, My IRMAA shot up to the $365,000 AGI bracket. After deducting my losses, which exceeded my winnings shown on the WIN/LOSS report you get at the end of the year from the Casino , my income was just social security, 18,000 a year. Now my MEDICARE costs are over $1,250.00 a month, not including an additional $400.00 a month for supplemental Insurance., (my wife gets penalized too ) which is much more than we have coming in. Tried to appeal it, SS / Medicare denied it. Never knew that playing Slot Machines would affect Medicare Premiums. They shouldn’t go by your AGI, they should look at your income AFTER DEDUCTIONS. I’m going to have to refinance my home just to pay Medicare B and D premiums.

     Reply

     • Calwatch says

       July 12, 2021 at 1:11 pm

       Since you play enough and try to advantage mailers you might be considered a professional gambler. You would have to pay SE tax on your net winnings but you could have those deductions done above the line. Look into the qualifications and see if that works for you.

119. The Wizard says

     March 22, 2021 at 7:23 am

     Wow, this is a neat one!
     You’ll need to contact your Congressman and have them change the law on the definition of Medicare MAGI.
     Or the definition of net gambling income. Should be a slam dunk, I think…

     Reply

120. Harry Sit says

     April 17, 2021 at 2:02 pm

     A mid-year update. With the latest CPI number, it looks like the first tier IRMAA in 2022 will go up to $90,000 single, $180,000 married filing jointly.

     Reply

121. Paula Thompson says

     May 5, 2021 at 12:21 pm

     Any newer info for 2022, oh great procrastinator? I’m just a retired biologiy teacher, but I watch this stuff.

     Reply

     • Harry Sit says

       May 5, 2021 at 2:51 pm

       I gave an update on April 17 in comment #120. I also updated the post under the heading “2022 IRMAA Brackets.”

122. Ken Fitzgerald says

     May 5, 2021 at 12:36 pm

     I think you meant to say “prognosticator”!
     Harry Sit is surely that to me and others who follow this thread.

     Ken

     Reply

123. BARBARA CARSWELL says

     June 3, 2021 at 2:27 pm

     What is the impact for filing your return on extension?
     I have a client who is convinced their IRRMA is based on the incorrect year because they filed their return October 15th.

     Reply

     • Harry Sit says

       June 3, 2021 at 3:36 pm

       Normally Social Security has the tax return information already by the time they send out letters in December for the following year even if you filed in October. 2021 was special because the IRS had a huge backlog in processing paper returns filed in 2020. Filing the return on October 15 shouldn’t affect 2022 IRMAA, especially when the return is filed electronically.

124. BARBARA CARSWELL says

     June 3, 2021 at 3:54 pm

     Thank you!

     Reply

125. Thomas N. says

     June 13, 2021 at 10:22 am

     With the June inflation numbers in, do you have estimate for the range of the IRMAA tiers for 2022?

     Reply

     • Harry Sit says

       June 14, 2021 at 6:53 am

       I updated the post with projected numbers for 2022.

126. Sha says

     June 15, 2021 at 7:44 am

     Thank you for your June 14, 2021 post providing the 2022 IRMAA estimates based on 2021 income.
     So, here we are in 2021 wondering what the 2023 IRMAA cutoffs will be based on our 2021 income, which we may be able to control.
     You wrote: “Now in 2021, you don’t know where exactly the brackets will be for 2023. Still, you can make reasonable estimates and give yourself some margin to stay clear of the cutoff points.”
     Aw, come on Harry, help a guy out. What are your reasonable estimates for 2023?
     🙂

     Reply

     • Sha says

       June 15, 2021 at 7:51 am

       First sentence corrected to read “2022 IRMAA estimates based on 2020 income.”

     • Harry Sit says

       June 16, 2021 at 7:17 am

       Using 2022 numbers for 2023 will be reasonable estimates. You will have a buffer of a few thousand dollars.

     • Steve says

       July 24, 2021 at 2:40 pm

       Sha, Check out comments #140 and #141.

127. Thomas N. says

     June 16, 2021 at 9:39 am

     Typically, I use the “buffer” each year (the difference between the two-year-old IRMAA estimate and what it actually turns out to be) to make a year-end Roth conversion, paying the taxes out of another account. This not only keeps us below the AGI level for the next IRMAA tier, it also slightly reduces the traditional IRA balance for RMD purposes, and allows us to manage AGI above or below the 22% or 24% income bracket. To be specific, I am using $180-224k as the first IRMAA tier in 2022, $180-226k in 2023, and $182-228k in 2024. (Yes, I have already modeled my 2024 taxes!)

     Reply

128. bev lolr says

     June 16, 2021 at 4:39 pm

     With inflation growing so much, surely this is a conservative estimate.
     Certainly would like to see this annual estimate available earlier in the tax planning year. ObamaCare S__ks.

     Reply

129. Drew M. says

     June 19, 2021 at 2:09 pm

     You write that untaxed social security benefits are not included in income used to calculate irmaa. Is this right?

     Irmaa is based on magi (modified adjusted gross income), nor AGI. Per this (perhaps dated?) website, http://www.healthreformbeyondthebasics.org/wp-content/uploads/2013/12/Modified-Adjusted-Gross-Income-FAQ.pdf ,
     “ How are Social Security benefits counted in Modified Adjusted Gross Income (MAGI)?
     Social Security benefits received by a tax filer and his or her spouse filing jointly are counted when determining a household’s MAGI. For people who have other income, some Social Security benefits may be included in their AGI. One of the modifications to AGI to get to MAGI adds in any Social Security benefits that have not already been included in AGI.”
     Can you confirm one way or the other? Thanks.

     Reply

     • Harry Sit says

       June 19, 2021 at 2:23 pm

       There are many flavors of MAGI for different purposes. The one you quoted refers to a different flavor of MAGI, not the MAGI for IRMAA.

130. Drew M. says

     June 19, 2021 at 2:22 pm

     Here’s another indication that MAGI includes untaxed SS benefits: https://www.healthcare.gov/glossary/modified-adjusted-gross-income-magi/

     Reply

     • Harry Sit says

       June 19, 2021 at 2:26 pm

       That’s MAGI for ACA health insurance, not MAGI for IRMAA. Medicare is not run by healthcare.gov.

131. Drew M. says

     June 22, 2021 at 7:53 am

     Got it. So you say that “untaxed” SS benefits are not included, right? To determine what percentage of one’s SS benefits are taxed, the following “MAGI” definition applies, as I understand it:
     “Modified AGI is AGI plus nontaxable interest income plus income from foreign sources plus one-half of Social Security benefits.”
     If THIS magi puts you over $25k but under $34k (filing single), then 50% of your SS benefits are taxable (and therefore that same 50% are included in the IRMAA magi calculation). If your magi under this definition is over $34k, then 85% of your SS benefits are taxable, and therefore included in the IRMAA magi also.
     So, for many with substantial SS benefits and other income (dividends, pensions, capital gains, side hustle), 85% of SS benefits will be included in IRMAA . . . .
     Thanks, again, for you insight and help.

     Reply

     • Harry Sit says

       June 22, 2021 at 8:27 am

       How much of your Social Security benefits are taxable is determined separately by its own rigmarole. By the end of that exercise, an amount goes into the AGI. You see the AGI on your tax form two years ago. When you go from AGI to MAGI for IRMAA to determine whether you have to pay a higher amount for Medicare, you don’t have to do anything *extra* with regard to Social Security to modify your AGI further. That’s all.

     • Ed says

       June 22, 2021 at 1:50 pm

       Where did you read about the “one-half of Social Security benefits”?

132. Chazz Jones says

     June 24, 2021 at 12:57 pm

     I’m a retiree who’s just been introduced to Premium Bracket Shock. In April, my wife decided to retire from a job with a health insurance plan that covered me, and we both applied for Medicare Part B. It took SSA until now (late June) to process the enrollment and inform us that the $148.50 premium we thought each of us would be paying was now $207.90 each based on our 2019 MAGI. We would have paid that much extra anyway because our 2020 MAGI, though lower due to not having to make my IRA RMD, also exceeds the $176k threshold. But the two-year lag apparently means another full year at what looks like a $1,500 premium on top of what we’ll be paying for the rest of this year. Since we’re allowed a special enrollment because of the loss of employment income, I’m wondering if we shouldn’t terminate the current Part B enrollment, postpone my wife’s retirement until early 2022, and re-sign up for Part B afterward at a non-adjusted rate because her loss of income should get us below the 2020 threshold. Or is there a better way to avoid the hit? I know most of Harry’s readers wouldn’t sweat a year or two of $1500 hits, but not all of us are in that position.

     Reply

     • Harry Sit says

       June 27, 2021 at 9:35 pm

       “Work stoppage” is an eligible life-changing event for appealing IRMAA. Read the paragraphs under “IRMAA appeal” again and follow the links there.

133. Carl says

     July 2, 2021 at 3:07 pm

     Hi Harry,
     We communicated last year and you shared how to calculate the annual IRMAA changes – for which I am still very grateful. So for a 2022 forecast I used the US city average, all urban consumers, not seasonally adjusted data.
     I averaged Sept 2018 to Aug 2019 monthly numbers and did the same for Sept 2020 to Aug 2021 ( I assumed the May 2021 number stayed the same for Jun, July, Aug). Doing this the percentage increase I calculated was 4.149% which seems to be higher than what you are forecasting? I believe you number is around 2.7%. Just wondering if you can shed some light on where I went wrong? Thanks again for all you do helping us navigate these uncertain waters!

     Reply

     • Harry Sit says

       July 2, 2021 at 6:10 pm

       Carl – That was comment #79. The base year doesn’t shift. You still compare with the 2019 numbers and the CPI-U numbers from September 2017 to August 2018.

134. Rosemary says

     July 5, 2021 at 2:59 pm

     I found your site and this column from a google alert. Found it fascinating reading the comments, thought I have not read them all as yet. Grandson wants a sleep over. Cannot believe that the supposedly republicans don’t know at least some of tax law, at least some of Medicare law. Making a big decision to retire you would think they would find out about it before they made a decision. Can bet they decided to retire and let some other person make their decisions for them and then are stuck with what was done and just signed papers. My cousin has a son who is a financial planner and after the Medicare law was passed. He retired early, took a cash out on his pension told his son that he needed $110,000 a year to live on and every year he complains cuz he cannot change anything without penalties. You would think that a financial planner would know about Medicare.
     I worked 2 jobs and took care of my disabled husband for 23 years and stayed at one for 30 years and had to retire at 65 when my husband needed even more care. I taped C-Span Washington Journal on a VCR and listened when cooking or doing bookwork on the weekends at home for the township or the bank for extra pay. I knew about Part D and also did google alerts since the 90’s and read about Judge Brody and her decision in the AT&T case. I think it was in Ohio and took on my husband place of business when they wanted to stop healthcare for all under and over 65 year olds that were disabled or on Medicare. I took a week of vacation off work, wrote a 5 page letter, was able to get addresses of 500 people to mail it to. Paid to have it copied at Office Max and stuffed the envelopes and put the postage on the envelopes then was told I could only write and send out letters even though I was POA if it had to do with an election. So I wrote vote on the 500 letters cuz luckily one of the people on the board forgot to pay his dues and was kicked off the board and an election was called for. Was able to have them make labels for the letter but could not do it myself. They wanted to put the labels on the letters. So on so the day I brought the letters in and took the labels in, I brought 5 other people with me and said I have helpers you don’t have to do it. I also threatened a class action lawsuit in that letter for those losing their benefits and said I was sure we could win it and surely a lawyer would take it on for all the publicity. I also put the home and cell phone numbers of everyone making the decision to take our healthcare away from us and asked them or their spouse to find the time to call each person at least once every day. It is now 2021 and we still have healthcare, that includes dental, prescriptions, physical therapy, medical appliances, hearing aids, mental treatments. Expensive but good benefits. The workers negotiate and vote for one of 3 plans the elected board chooses and the one with the most votes win. The workers play for 50% for retirees and we pay the rest.
     I was told even though I was POA I could not send out a letter unless it had to do with voting on an election. Luckily some one on the executive board lost his seat because he did not pay dues. So I wrote VOTE on 500 envelopes in red. Then when I was told they would make labels for the envelopes if I bought the labels and I could not have the addresses. They were expensive and I bought cheaper ones and dropped them off. They said the would put them on and mail them. When I went to take the envelopes in I brought 5 other people with me and some of them were retirees and the disabled ones that would lose their benefits to help me. They let us put the labels on and then they said they had to take it down the street to the post office and I said why can’t the office lady that my husband had hired years earlier go with me. So they could not say no as she got up from her desk and said she would love to help me. So that was taken care of. I also in that letter asked everyone to call the cellphone and home phone number of everyone on the list at least once a day. We still have our healthcare.
     I have 2 questions. 1. I do Roth conversions every year since the first year that we could. I also funded my husband’s IRA since 1978 or 79. Then my husband died and I cannot do as much now. I live on $20,000 a year since 1995 and so far it seems like it is enough. I have savings and money coming in each year that I do not spend. I use a part of it to pay the income tax on the conversions. I have a heart disease that I inherited and won’t live forever and my 2 children are near 60. Their wives are about 8 years younger so will perhaps continue to work perhaps after the husbands retire. One is a doctor and I want him to use the Roth so it won’t have to be included in their income. The other one is single but a professional also.
     What I want to do it sign a 100% conversion paper that can be mailed before I die or shortly after and also the RMD be taken out for that year of death. Can this be done? Is it legal? The other question is I see that next year your projected the income may go up to $90,000 before the Medicare premium goes up. Is there any way to know if and by how much I can have convert this year and still stay below the amount so my premium will not go up in 2023? If it goes to $90,000 for next year can I plan on 2% increase at a minimum for the income ceiling over $90,000 in Dec before the Medicare premium will go up in 2023?
     I think I know the answer for the second question. Should I just stick with the amount that is for this year? I think it is $88,000?

     Reply

135. Carl says

     July 9, 2021 at 3:56 am

     Harry
     Per post 133 thank you for the clarification. I believe I have it finally!

     Reply

136. MARY WHITEHOUSE says

     July 11, 2021 at 7:50 am

     Thank you so much for posting potential 2022 IRMAA limits – Very helpful!!!! I just wanted to tell you about my situation. I am married (a second marriage), and my husband and I keep our finances separate as much as possible. His estate will go to his kids and my estate to my kids. We filed jointly as long as he was age 70 1/2 and I was under, but when I turned 70 1/2 in 2019 we started filing separately to make figuring taxes less complicated. I then received a letter from SSA that my premium was going up to $475.20 PER MONTH BECAUSE MY AGI WAS $88,264!!!!!!
     Maybe I missed it, but I don’t think you have mentioned this provision that only applies to married filing separately. Luckily, I filed reconsideration with Social Security and was able to stop the increase by telling them I would not go over 88,000 in 2020 because I would be giving my RMD to charity and filing jointly with my husband.

     Reply

137. DreeMcg says

     July 12, 2021 at 5:27 am

     I could be wrong, but I don’t think the charitable donation affects MAGI. It just focuses on the income side; not deductions.

     Reply

     • Mary Whitehouse says

       July 14, 2021 at 7:55 am

       When you have your financial institution take out a Required Minimum Distribution (RMD) from your IRA and they send it directly to a charitable organization, you are not taxed on the RMD. If you are trying to keep your income below a certain level for IRMAA purposes, this is a good way to do it. Instead of giving my church a monthly donation, I have my financial institution send money once a year from my IRA that counts as an RMD, and I do not pay taxes on it.

       From the IRS website:
       Required minimum distributions – Qualified charitable distributions
       What is a qualified charitable distribution?
       Generally, a qualified charitable distribution is an otherwise taxable distribution from an IRA (other than an ongoing SEP or SIMPLE IRA) owned by an individual who is age 70½ or over that is paid directly from the IRA to a qualified charity. See Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs) for additional information.

       Can a qualified charitable distribution satisfy my required minimum distribution from an IRA?
       Yes, your qualified charitable distributions can satisfy all or part the amount of your required minimum distribution from your IRA. For example, if your 2018 required minimum distribution was $10,000, and you made a $5,000 qualified charitable distribution for 2018, you would have had to withdraw another $5,000 to satisfy your 2014 required minimum distribution.

       How are qualified charitable distributions reported on Form 1099-R?
       Charitable distributions are reported on Form 1099-R for the calendar year the distribution is made.

       How do I report a qualified charitable distribution on my income tax return?
       To report a qualified charitable distribution on your Form 1040 tax return, you generally report the full amount of the charitable distribution on the line for IRA distributions. On the line for the taxable amount, enter zero if the full amount was a qualified charitable distribution. Enter “QCD” next to this line. See the Form 1040 instructions for additional information.

138. Ed Fogle says

     July 12, 2021 at 5:50 am

     If a taxpayer is 70 1/2 they can make charitable contributions from their IRA (I don’t know if this applies to 401(k)s) buy making Qualified Chartible Distributions (QCD). They are subtracted from the amount reported on your 1099R when reporting income on the tax form so AGI is not affected.

     Reply

139. AnnaC says

     July 12, 2021 at 8:51 am

     Hi Harry,
     While the final #s aren’t due to be announced till Oct am seeing articles the projected 2022 COLA may be 5.2% for SS benefits based on CPI data.
     Today I see Garamendi/CA introduced the Fair COLA for Seniors Act of 2021 to switch from CPI-W to CPI-E to more accurately reflect the cost for seniors.
     Any idea if this goes through (doubtful but we can dream…) how this may change the projected increase to 2022 SS benefits?
     Thx, Anna

     Reply

140. Steve says

     July 22, 2021 at 1:43 pm

     I just did some spreadsheet calculations and was able to match your numbers. A couple of interesting observations from this exercise:
     First, since the threshold values are first calculated for a single tax payer and then doubled, the threshold values for a married filing jointly will always be divisible by $2000.
     Also, my calculations show that even if there is absolutely no inflation in the future, and the CPI-U remains unchanged from where it was for June 2021, the threshold values for 2023 would still increase to $93,000/186,000.

     Reply

     • Harry Sit says

       July 22, 2021 at 6:20 pm

       Agree with your numbers. We had high inflation numbers three months in a row. Now the 2022 numbers have a good chance to push to $91,000/$182,000 in the first tier.

     • Thomas N. says

       July 25, 2021 at 6:08 am

       Steve or Harry:
       With your assumption that under a no-inflation scenario the first IRMAA tier in 2023 would begin at $93,000/$186,000, what would the upper end of that band equate to?

     • Steve says

       July 25, 2021 at 6:51 am

       My calculations show the second IRMAA tier starting at $117,000/$234,000 in 2023 (based on 2021 income) assuming the CPI-U remains unchanged through August 2022. I should note, however, that a slight decrease in the CPI-U of just 0.1-0.2% would be enough to drop these thresholds by $1000/$2000. If you remind me, I will try the update these calculations after the November CPI-U numbers are released.

     • Eric says

       August 18, 2021 at 7:50 am

       Why would 2023 brackets increase if there is “no inflation in the future?” Isn’t it the inflation data from Sept 21 thru Aug 22 that determines any 2023 adjustment from 2022?

     • Harry Sit says

       August 18, 2021 at 10:04 am

       Eric – Because if inflation is 0%, the average from Sept 21 thru Aug 22 will be frozen at the latest number, whereas the average from Sept 20 thru Aug 21 is dragged down by lower numbers in previous months.

141. Rosie says

     July 22, 2021 at 3:54 pm

     I convert some to a Roth every year and am in late 70’s and my children are near retirement. I want to leave my IRA’s to them tax free. Should I try to stay below $88,000 or $90.000 in the 2021 filing in 2022?

     Reply

     • Harry Sit says

       July 22, 2021 at 6:31 pm

       The 2021 filing in 2022 will be compared to the 2023 threshold values. Unless inflation turns negative, the 2023 value for single will be at least $93,000 in the first tier. See comment #140 from Steve. Of course it’s still possible to have negative inflation. So leave some margin of error just in case.

142. The Wizard says

     July 22, 2021 at 5:26 pm

     Yes!

     Reply

143. Harry Sit says

     August 11, 2021 at 6:52 am

     Updated the 2022 projection for the first tier from $90,000/$180,000 to $91,000/$182,000 following the release of the inflation number in July 2021. The other tiers didn’t change from the previous update.

     Reply

144. Bob says

     August 27, 2021 at 9:53 am

     Harry-
     Could you please clarify exactly how the bracket inflation numbers are calculated. Some websites suggest that it is simply the annual CPI- U (adjusted or unadjusted??) increase over the prior year as measured at the end of August. If so, one would only need 1 number (the annual CPI-U increase) for the calculation, and the increase for 2022 would be on the order of July’s 5.4%. Your comments seem to suggest that an average of 12 CPI-U numbers is employed…one for each of the prior months. If one took the average CPI-U for the past 12 months, the increase would be on the order of 4.1% or so. Your numbers suggest that the first two brackets will increase on the order of 3.4% and 2.7% (which would include rounding errors, of course). So I’m confused!! Could you please explicitly clarify how the bracket inflation numbers are calculated, and give an example of the 12 CPI-U numbers (adjusted or unadjusted???) and how they would be employed for your bracket estimates for 2022. Thanks!

     Reply

     • Harry Sit says

       August 27, 2021 at 10:51 am

       The calculation method is in the reply to comment #79.

145. Braden says

     August 27, 2021 at 11:18 am

     Are questions and replies numbered? Am I the only one having to count each one to get to what I want to read ?

     If they are not numbered could this be an added compliment to your column?

     Reply

     • Ken says

       August 27, 2021 at 11:30 am

       Braden, Your comment is number 145. To the left of your name above. You have to scroll back to find #79, and Harry’s reply.

     • Harry Sit says

       August 27, 2021 at 11:57 am

       Please use a desktop browser to see the comment numbers. The numbers don’t show up well on my iPad or phone. I’ll see if I can fix that.

146. Braden says

     August 27, 2021 at 3:38 pm

     The only computer I use is a desktop Mac. IOS and use Safari with Google Chrome as the browser.
     Thank you for trying to help. Where near the comment is the number? I would assume it is by the name

     Reply

     • Ken says

       August 27, 2021 at 8:41 pm

       #79 comment was by CARL and dated October 7, 2020 at about 5pm. Harry’s reply is after it.

     • Harry Sit says

       August 28, 2021 at 6:04 am

       I fixed the comment numbers. They show up on my iPad and phone now. Please delete browser cache and refresh if you still don’t see the comment numbers.

       Thank you for bringing it up. I learned that Safari on Mac behaves differently from Chrome on Windows because Safari uses a different rendering engine.

147. Keith says

     August 28, 2021 at 11:33 am

     Until now, MAGI (for IRMAA surcharge threshold purposes) has been calculated as AGI + tax free interest.

     Going forward, will Paycheck Protection Plan (PPP) loan forgiveness amounts be added to the MAGI calculation?

     Reply

     • Harry Sit says

       August 28, 2021 at 1:45 pm

       No. PPP loan forgiveness doesn’t add to income.

148. Braden says

     August 28, 2021 at 2:30 pm

     Thank you so much. I see some of the numbers now. I really appreciate your help.

     Reply

149. Thomas N. says

     August 30, 2021 at 1:55 pm

     So I will be 72 next year and therefore taking my first RMD, 1/12 each month.
     If I also wish to convert some of my traditional IRA balance in 2022 to a Roth, it is my understanding that I must first withdraw the full amount of the RMD before taking that conversion action.
     My question is, is this also true for the qualified charitable distribution? Or can I donate to our church via the QCD process at any time throughout the year, regardless of how much of the RMD has been withdrawn?
     Thank you.

     Reply

     • Harry Sit says

       August 31, 2021 at 10:20 pm

       If you’d like to have the QCD count toward your RMD, it needs to be within the first $X that comes out of the Traditional IRA. Say your RMD is $20,000 and you’d like to donate $5,000. You can do $15,000 RMD followed by $5,000 QCD and then your Roth conversions. Or you can do $5,000 RMD, $5,000 QCD, another $10,000 RMD, and then your Roth conversions. Of course you can continue with additional QCD throughout the year after you complete your RMD.

150. Retiree Dave says

     September 1, 2021 at 12:30 pm

     I am questioning the 2022 Projection, which was in an August 11, 2021 update of the article. I was only looking at the IRMAA Bracket that would apply to me; specifically married filing jointly in the Standard*2 that lists the 2021 IRMAA as $276,000, and the projected 2022 IRMAA as $284,000. Virtually all recent projections of the COLA for 2022 are between 5% and 6%. However, this article appears to be using a 3% projected Cola for 2022. I assuming that all brackets use the same projection COLA percentage.
     A more realistic projection would be an IRMAA for this bracket of $291,000 based upon 5.5% COLA for 2022.
     As an aside, I have been managing my income to stay just within the 2X cost IRMAA by converting regular IRA’s to Roth IRA’s before the Required Minimum Distributions kick into my income stream. Sure, I am paying the extra taxes now, but reducing them in the future.

     Reply

     • Harry Sit says

       September 1, 2021 at 3:14 pm

       Social Security COLA uses a different inflation index and a different comparison period.

     • Bob says

       September 1, 2021 at 4:28 pm

       Retiree Dave-
       I sympathized with your question (see comment 144 above). Here are my numbers and methodology calculated for your bracket:
       All the calculations for brackets are based on the CPI-U (not seasonally adjusted) numbers, which can be found at https://www.bls.gov/regions/mid-atlantic/data/consumerpriceindexhistorical_us_table.htm
       1). Average the numbers for the period Sept 2019 thru Aug 2020 (257.721)
       2). Average the numbers for the period Sept 2020 thru Aug 2021 (265.513 assuming an Aug 2021 CPI-U of 274.368..an increase of .5% from July)
       3). Divide to get the increase ratio for the brackets (265.513/257.721 = 1.030)
       4). Multiply the 2021 threshold for singles for your bracket (138,000) by this number (1.030) to get 142,173.
       5). Round to the nearest 1,000 (142,000).
       6). Double this number for married couples (142,000*2= 284,000). Note that this bracket estimate is the same as Mr. Sits. The only uncertainties are associated with the August 2021 CPI-U number, which will come out in mid September, although the number has to be substantially off my assumption to affect the calculations due to the averaging effects.

       You can make various assumptions going forward for 2023 as to how the CPI-U numbers will increase, and calculate the 2023 bracket to help determine how much income you should take this 2021 year.
       I hope that these comments and this example are helpful for you and others.

151. Dave Retiree says

     September 1, 2021 at 6:15 pm

     Social Security Cola is based upon the CPI-W index comparing the average of the third quarter of 2020 CPI with the average of the third quarter of 2021 CPI. Most predictions are in the 5-6% range, with two months left to report.
     The IRMAA Cola is based upon CPI-U, and compares the CPI number for September 2020 to August of this year, which will reported shortly. In the IRMAA calc, it appears that quarters are not used, just comparison of single months year to year. The ratio of the number CPI number for August 2021 compared to the number for September 2020(260.28) will then be the basis for the IRMAA adjustment. So, 11 of 12 months have been already been reported, and through July 2021, the CPI number is 273.003. If there were no inflation at all from July to August, the yearly increase would be 4.8%. If August increases the same as July, the yearly increase would be 5.8%.
     In effect, these indexes although not the same, and the methodology is different, they give results that run pretty close together. Also, looking at the IRMAA COLA’s for 2020 and 2021; they tracked pretty closely to the Social Security Cola’s for those years. So, I still believe my earlier comment projecting 5.5% is closer to what we will see, recognizing that the IRMAA amount is rounded to the nearest thousand. I did not use seasonally adjusted information, but used the following table, link below for CPI-U data:
     Consumer Price Index Historical Tables for U.S. City Average : Mid–Atlantic Information Office : U.S. Bureau of Labor Statistics (bls.gov)
     I thank commenter Bob for the detail he provided, but I do not believe that a 12 month average should be used.
     The real good news about this spirited discussion is that we will find out within a couple of weeks.

     Reply

152. Rob says

     September 2, 2021 at 6:35 am

     I guess the good news here is the 2021 high CPI numbers will carry forward into the 2023 bracket increase calculation, as a lagging monthly index is used!

     Reply

153. Harry Sit says

     September 14, 2021 at 6:35 am

     August 2021 inflation release came out today. All numbers for 2022 are final. No changes from the previous projections. Official numbers will come out in late October or early November. Also added projections for 2023 if inflation is 0% through August 2022.

     Reply

     • BMG says

       September 16, 2021 at 10:33 am

       Hi Harry,

       Thank you for these estimates, but why would there be any increase in the IRMAA thresholds for 2023 if there is no increase in inflation over the next 12 months? Thanks in advance for clarifying.

     • Eric says

       September 16, 2021 at 10:44 am

       Because 12 months frozen at the August, 2021, level would be higher than the average of the previous 12 months.

     • Jim says

       September 17, 2021 at 7:28 am

       Eric’s reply is partially correct, but in reality the comparison is not with the previous 12 months (Sep 20-Aug 21), but with the 12 months Sep 2017-Aug 2018. See Harry’s reply to comment #79, dated Oct 7, 2020. This would still be any increase in the 2023 IRMAA bracket amounts.

154. Jim says

     September 14, 2021 at 12:34 pm

     Good afternoon,
     I was a ong time widower that remarried earlier this year. Prior to my marriage I had an additional IRMAA amount as a single STD*2.6.
     I appealed because of marriage , using my expected 2021 joint income.
     SS reduced my IRMAA amount to the married STD*1.4 and sent me a refund. Nice!
     Question: Since I used my 2021 expected income for this year’s IRMAA, what will SS use for 2022. Will they still use my (and my new bride’s) 2020 income?

     Reply

     • Harry Sit says

       September 17, 2021 at 10:27 am

       I’m guessing they’ll use your 2020 tax return filed as single and you’ll have to appeal again when you receive their letter in November or December.

155. roger says

     September 19, 2021 at 11:30 am

     Projected thresholds for 2023 with no inflation after Aug-21 would be higher than 2022’s thresholds because the thresholds are based on AVERAGE CPI-U for the prior Sep-Aug. With no inflation from Sep-21 to Aug-22, that average would equal the Aug-21 CPI-U. The 2022 thresholds are based on average Sep-20 to Aug-21 CPI-U, which is lower than the Aug-21 CPI-U. (Inflation adjustment is described in 42 USC 1395r .(i)(5) )

     Reply

156. Marty Yeager says

     September 21, 2021 at 4:56 pm

     I’m not sure I am following the calculations. Regarding the 2023 Coverage (based on 2021 income), are those numbers for each category guaranteed (based on available data) to be the lowest number for each category, but could be higher if there is inflation after August 2021? Thank you for your help. In other words, can I count on them to adjust my AGI for 2021?

     Reply

157. Harry Sit says

     October 13, 2021 at 7:55 am

     September inflation number released this morning prompted a slight increase in the 2023 projections for the first two tiers.

     Reply

     • Allan R. says

       October 13, 2021 at 10:48 am

       What amount of income would you stay below in 2021, so that I don’t jump to the next IRMAA bracket for married 1.4* for 2023 MAGI projection of $236K? I would hate to go over the bracket by $1 and end up paying an additional $2400/yr in Medicare premiums.
       I guess because your calculation is a minimum with no inflation for 2022 baked in, you would suggest to go right up to the $236K projection limit and still be safe.

       Thank you for providing these projections.

158. SC says

     October 13, 2021 at 9:50 am

     I’ve never heard anything about the IRMAA from AARP. What is their position on this?

     Reply

     • Ed Fogle says

       October 13, 2021 at 10:00 am

       Years ago I wrote AARP, AMAC, my Congressional delegation (I’m from Oklahoma so you would think my Senators and Representatives would be very receptive) laying out my objections to both the concept and implementation of IRMAA. Not a peep from any of them except boilerplate responses. I even wrote to the airline pilot unions since many of their members will be hit with IRMAA. Again nothing. You would think all of the above entities would be opposed to IRMAA but, sadly, they don’t seem to care.

159. Rosemary says

     October 13, 2021 at 9:57 am

     Updated December 24, 2020
     From an article from AARP–

     https://www.aarp.org/retirement/social-security/questions-answers/income-affect-medicare-premium.html

     Reply

160. Steve says

     October 13, 2021 at 11:37 am

     Harry, thanks a bunch for the revised 2023 IRMAA estimates. I can use those for 2021 late year tax planning.

     Reply

     • Marty Yeager says

       October 15, 2021 at 12:58 pm

       You should be able to update up to the November CPI-U number released in December, assume no deflation through August ‘22.

161. AnnaC says

     October 13, 2021 at 11:39 am

     Jim
     yes, SSA will let you appeal two years in a row for the same life changing event

     Reply

162. Rosemary says

     October 13, 2021 at 11:45 am

     Yes thank you very much. For some reason I did not understand the info to get the new figures. I have shared the link with friends.

     Reply

163. Giri says

     October 13, 2021 at 7:53 pm

     This is very useful for tax planning for 2021.
     You have given the brackets for 2023, assuming 0% inflation through August 2022. Does this mean that I will be safe to use these numbers, as in reality they will be higher?

     Reply

     • Marty Yeager says

       October 14, 2021 at 7:22 pm

       I’m guessing that is correct unless we have deflation, which is probably unlikely.

164. Paul says

     October 15, 2021 at 12:54 pm

     Harry, thanks for publishing this info. I’ve been trying to figure out if I can adjust my IRA withdrawals at the end of this year to avoid pushing us over the first bracket threshold in 2023.

     I read back through the comments about how you calculate it, and had a heck of a time replicating it until I looked at the actual law and had my “aha!” moment: each year the brackets are recalculated based on the increase from the average CPI-U over the 9/17-8/18 period (which is 249.28).

     (1) Calculate the average CPI-U over the past 12 months (265.447 from 9/20-8/21).
     (2) Subtract 249.28 from that average (resulting in 16.167 this year).
     (3) Divide the remainder by 249.28 (resulting in 6.49%).
     (4) Increase the 2019 brackets(s) (the first tier ends at $85,000) by that percentage.
     (5) Round each to the nearest $1,000.

     To reiterate for anyone reading this far: the CPI-U average (249.28) from 2018 and the brackets from 2019 are reused every subsequent year, except for the top bracket. And starting in 2028, the same algorithm will be applied to the top bracket.

     Reply

     • Marty Yeager says

       October 15, 2021 at 3:52 pm

       Well put, I got into the weeds myself, to understand how this works. Tedious, basic math involved. I think the closest we can get to the likely “floor” of the 2023 brackets, before Dec 31 of this year, is as follows: take the CPI-U values for each of Sept 21, Oct 21, and Nov 21 (last one not available not until early December 21), then multiply Nov 21 value by 9 to represent future unknown values from Dec 21 thru Aug 22 thereby assuming no inflation or deflation after Nov 21), add the values for the 12 months (3 plus 9 assumed), get the average, then follow your directions above. What do you think?

     • Paul says

       October 15, 2021 at 4:16 pm

       Marty, I just picked an annual inflation rate, then increased each monthly CPI-U by 1/12th of that, until Aug-2022. As data becomes available, I’ll enter the actual monthly CPI-U’s.

       By playing with various inflation rates, I found that up to 2.2%/year, the 2021 threshold for 2023 remains $94,000 (single). So, it’s close enough for me to make a decision this year to defer 2022 AGI into 2023.

     • Marty Yeager says

       October 15, 2021 at 5:04 pm

       Got it. Nice to know we can get a grip on this mystery calculation!

     • Tom P. says

       October 19, 2021 at 7:58 pm

       Technically, this is the correct method, but you can also do it year-to-year, which takes into account the previous changes in the CPI-U.

       1) 2018-2019 compared to base year 2017-2018 is an increase of 1.0190 (254.016/249.280);
       2) 2019-2020 to 2018-2019 is 1.0146 (257.721/254.016)
       3) 2020-2021 to 2019-2020 is 1.0300 (265.447/257.721)
       4) Multiply 1.0190 x 1.0146 x 1.0300 = 1.0649, or 6.49%, same as your result.
       This way one doesn’t have to know the base year brackets, just the previous year brackets to make an informed estimate of future brackets.

       The key thing for married filing jointly is the single bracket is adjusted and rounded to the nearest thousand first, then doubled to get the married filing jointly.

       Example: new 2022 married lower limit is ($176,000/2)x1.030=$90,640 rounded to $91000 x 2 = $182,000

     • Pat says

       January 10, 2022 at 12:20 am

       The algorithm for the top bracket starting in 2028 will be slightly different in that it will use the average CPI from Sep 2025 through Aug 2026 as the base year instead of the CPI average of the year ending Aug 2018 that is used for the other brackets.

     • Tom P says

       January 11, 2022 at 3:51 pm

       So Pat, what you are saying is the top (5th) adjustment bracket, currently 500,000+/750,000+, rather than being fixed, will now start to index starting in 2028 based on the 2026-2027 average vs 2025-2026 “base” average? If so, then that would also affect the top of the 4th bracket. Hmmm, wish I had to worry about that!

     • Harry Sit says

       January 11, 2022 at 4:09 pm

       That’s correct. The $500k/$750k will stay fixed through 2027 (2025 income). When it goes up in 2028 (2026 income), it will use the CPI average in 2026-2027 over the CPI average in 2025-2026. We will add that wrinkle in 2026.

     • Tom says

       November 26, 2022 at 10:37 am

       Thanks Paul. Your explanation was the key to helping me figure this calculation out. If feels good to be able to duplicate Harry’s calculations exactly. Gives me a lot of confidence in these numbers.

     • sjm says

       December 9, 2022 at 10:35 am

       Thanks. I finally got a spreadsheet that is working perfectly.
       Starting out, I made a few mistakes before I got it right.

       The first big mistake I made, when using the cpu-u data, was to average the small monthly percentage increases rather than the actual absolute data value. I did this because I could only find monthly percentage increases. However, on the BLS site giving CPI data, I found out I could format the displayed data table to show “original data value” rather than the default monthly percentage increases.

       The second mistake I made when calculating the new bracket thresholds was to use the previous years’ threshold rounded value rather than the calculated unrounded value. The only exception was when I used the 2019 base published thresholds. This meant my spreadsheet went from tax year 2019 to in progress year 2024 calculation.

165. Bev L says

     October 15, 2021 at 3:26 pm

     This is way too complicated for the average bear. I am hoping someone in the know will just reply with what they “think” the Tier limits will be for 2021 for your 2023 subsidy. Many thanks!

     Reply

     • Paul says

       October 15, 2021 at 3:39 pm

       Harry has provided an estimate in the article. Look for the title “2023 IRMAA Brackets”. I think it’s safe to say that’s the minimum tier limits, as it assumes there will be no inflation in the next 12 months.

       If you want to see the effect of various CPI-U increases in the next 12 months, the algorithm I detailed above can be used. That’s what I wanted to do, and why I took the time to figure it out.

166. Steve says

     October 15, 2021 at 5:31 pm

     I have seen a lot of discussions about predicting the IRMAA tiers for 2023 but very little on the risk versus reward of contributing the extra $1000 or $2000 that a higher bracket would allow.
     For me, the risk of going into the next IRMAA tier is that I would need to pay about $1800 extra for Medicare in 2023.
     The potential reward for taking this risk is that I would be able to convert an extra $2000 from a traditional IRA to a Roth IRA this year. This money would be taxed at a 22% marginal rate now versus what may be a 28% rate later when I am required to take minimum distributions. This would potentially save me 6% of $2000 or $120.
     So in essence, I am risking a $1800 expense in 2023 to save $120 at some later date. Am I thinking about this correctly?

     Reply

     • Marty Yeager says

       October 15, 2021 at 7:03 pm

       I think you are correct to take a holistic approach to your particular tax situation in weighing how much taxable income is best. Barely stepping over the threshold feels very painful the higher the AGI and for a couple. Perhaps the marginal tax brackets are more important, one just needs make the calculations.

     • Ros says

       October 16, 2021 at 7:48 am

       I convert to a Roth every year since I was able to but stay within the same tax bracket. The tax brackets usually come out in the last quarter of the year.
       Are you bringing into the scenario if you should become a widower and the higher tax brackets at that time? Also if you have children are you thinking about the taxes they would have to pay when the money would have to be spent within the 10 year span.
       I am a widow and converting to a Roth for the children who are near retirement age themselves. A Roth is not included in the IRMAA if they are paying for Medicare.

167. Tom P. says

     October 15, 2021 at 5:56 pm

     Today I sent my local SS office SSA-44 forms for my wife and I. We’ve been paying IRMAA the last two years, however I retired mid 2020 so now my 2021 income will be below the $182,000 lower limit for 2022 instead of Tier 3 based on 2020 income. I hope I filled these out correctly as I input year 2021 and my estimated AGI (which should be quite accurate since I’m not making any more withdrawals this year). I also estimated my 2022 AGI, which will be even lower than 2021.
     Based on this we should not need to pay IRMAA in 2022, but will we also get a partial refund for 2021? Based on the published 2021 brackets our income for 2021 will be in the Tier 1 range instead of the Tier 3 we are paying now.

     Reply

     • Tom P. says

       October 30, 2021 at 2:27 pm

       Ok, I’ll answer my own question. If your income goes down or you have another qualifying circumstance that would reduce your IRMAA surcharges, IRMAA for the affected year will also change, not just the immediate follow-on year.

       So, for me, my income dropped in 2021 due to a work stoppage in mid 2020, so I’ll be getting a refund on the amount paid thus far this year. To confirm, today I logged into “my Social Security” and checked the upcoming Medicare charges and SS has reduced IRMAA for November (payable in December) from the 3rd tier to the 1st tier. Wish I’d have known about this last month as I would have withdrawn a bit less from my 401(k) then to stay below the 2021 threshold. Oh well, I can’t complain as I’m still saving a lot this year and next.

168. Mark says

     October 31, 2021 at 12:07 pm

     IRMAA is in fact a tax. Taxes are intended to incentivize certain behaviors. My gripe with the IRMAA is it fails to incentivize the right behaviors, which for us olders is to take better care of ourselves (maintain the proper weight, don’t smoke, drink little or none, exercise, eat right). There is no premium reduction for those efforts or penalties for bad practices, even though better health practices would mean less costs for Medicare. It only measures income and penalizes those who have saved. Our IRAs and paid-off mortgage were built by a lot of frugal living and deferred gratification during our working years. Hence we intend to respond to the government’s wishes as signaled by its disincentive — we are going to reduce our MAGI in any way we can. Prime example: as soon as we turn 70-1/2, we will donate our RMDs directly to charity. You should also look for tax shelters and other avoidance schemes, which I applaud. As for the lawmakers, I’m sure that they will be surprised once again by the “unintended consequences.”

     Reply

169. Karen says

     November 1, 2021 at 11:59 am

     Thanks for this estimation – I guess :-). My rough estimate for taxes this year is $118,017. Now I have to bet whether the 2023 income levels will go up from your estimate, or decide it will be no higher that $118,000 and transfer more money out of my IRA to have the earnings be taxed at capital gains in the future. Guess I’ll go flip a coin….

     Really appreciate the Information,

     Reply

     • Tom P. says

       November 1, 2021 at 2:23 pm

       Karen, the $118,000 figure for the upper end of the 1st tier surcharge bracket is based on inflation numbers through September 2021. This yields a current multiplier of 1.033 for the 2022 brackets. Numbers for October and November will be available about mid December, at which time we’ll have a slightly better idea of how the brackets might shift.

       If the eventual multiplier changes from 1.033 (the highest since IRMAA inception) to 1.060 that would increase the bracket limit to $121,000 for 2023, so I don’t think we’re looking at a huge difference from the estimated number.

       If you can, you might hold off on anymore IRA withdrawals until more data is available in December. Hopefully, the brackets will shift enough so your current estimate of AGI doesn’t tip you into the next higher bracket.

     • DrewMcG says

       November 2, 2021 at 9:01 am

       Karen: Did you include in your 2021 AGI estimate the continuation of the $300 charitable gift deduction even for those who take the standard deduction that Congress extended to 2021? If not, you could donate $18 to a charity and avoid the second-level bump in IRMAA for 2023 that way (e.g., even if inflation stays @ 0.0% through next August, which seems kinda unlikely ….).

     • Steve says

       December 24, 2021 at 10:21 pm

       I was playing around with TurboTax tonight and noticed that for 2021, the charitable gift deduction does not appear to reduce the AGI like it did in 2020. It still reduces your taxable income, but not the AGI that is used to determine your IRMAA level.

     • Harry Sit says

       December 25, 2021 at 6:04 am

       Steve – That’s correct. 2020 was an exception. The charity contribution deduction doesn’t affect MAGI for 2021. See 2021 $300 Charity Deduction For Non-Itemizers $600 Married.

     • Tom P says

       December 25, 2021 at 12:06 pm

       Well, charitable not lowering AGI kinda sucks… wish I had known that earlier, but if my math is correct we’ll still squeak in under the $182,000 limit for MFJ in 2022, but by only $452 now! [our 2022 IRMAA is going to be based on 2021 income since I retired in 2020 and filed SSA-44 in October; we rec’d a refund of our 2021 IRMAA within 2 weeks, and my local office told me this week they would adjust our 2022 IRMAA based on that info].

       The above assumes that IRA contributions are still “above the line.” I withdrew a bit too much from one of our accounts to stay below the new limit, but since I received payment this year from my former employer for an incentive plan payout, I contributed that amount to my wife’s Rollover IRA to hopefully be below the 1st surcharge tier for 2022.

170. Don G says

     November 4, 2021 at 3:01 pm

     This site seems to be “best on the web” for projecting the IRMAA brackets ahead of their official announcements. Many thanks to Harry Sit.

     What are some sites that reliably predict what the Medicare Part B and Part D premiums and IRMAA adjustments will be?

     Reply

171. Tom P. says

     November 4, 2021 at 7:43 pm

     Don, if you are familiar with spreadsheets it’s really quite easy to do your own predictions… you just need the data and methodology:
     1) CPI-U data is at https://www.bls.gov/regions/mid-atlantic/data/consumerpriceindexhistorical_us_table.htm
     For 2022 you just take the average of the Sep 2020 to Aug 2021 numbers (265.447) and divide by the Sep 2019 to Aug 2020 average (257.721) to yield a multiplier of 1.030. The monthly CPI data is published around the 10th of the following month. Oct data will be available Nov 10 and Nov data on Dec 10, so at that time we’ll have three of the 12 data points for 2023, which will give some indication of how things will go.

     Multiply each single income bracket ($88,000 from 2021, etc.) by this number (1.030) and round to the nearest thousand, which yields $91,000. Do the same for the other tiers. To get married filing jointly, double these amounts.
     2) The IRMAA Part D adjustment is based on the Part D Base Beneficiary amount, which for 2022 is $33.37 (this is on the CMS website; Google “medicare ratebooks & supporting data for the link), it’s published the end of July each year). Multiply this amount by the following factors for 1st thru 5th tier: 0.3725, 0.9608, 1.5490, 2.1373, and 2.3333. The first tier number is calculated as (35.0-25.5)/25.5. For the other tiers the first number is 50.0, 65.0, 80.0 and 85.0, meaning you pay 35% thru 85% of the cost. Thus, the Part D 2022 adjustment for the 1st tier is $12.40 ($33.37 times 0.3725, rounded to the first digit)
     Enjoy 🙂

     Reply

172. Harry Sit says

     November 10, 2021 at 7:14 am

     The second data point for 2023 came out this morning. It increased the 2023 0% inflation baseline numbers slightly in the middle tiers. I also added a new table with 5% inflation for 2023. I will update again next month.

     Still haven’t seen the 2022 Part B premium yet.

     Reply

173. Paul says

     November 10, 2021 at 7:16 am

     Harry, CPI-U is out for October, and it’s up 6.2% from a year ago. It’s the highest since the year ending November, 1990.

     I plugged it into a worksheet I built to project the IRMAA brackets for 2023, and found that while the projection is still $188,000 for the beginning of the second tier if you assume inflation is 0% from now until August, 2022….

     If I assume the annual inflation for the remaining months is 0.8%, that’s enough to boost the beginning of the second tier to $190,000. Before the October, 2020 CPI-U was released, the minimum remaining inflation to bump it to $190K was 2.3%.

     A further increase of remaining average inflation to 3.5% will bump the beginning of the second tier to $192,000. I’m planning to use this for my AGI limit in 2023.

     (Edit to note that Harry posted a comment while I was composing this!)

     Reply

     • Paul says

       November 10, 2021 at 8:01 am

       Apologies for a late correction to an error I didn’t notice until now:

       I’m planning to use $192,000 for my AGI limit in 2021 (current tax year), not 2023.

       It will affect the IRMAA brackets in 2023, and I transposed the dates.

174. Becky G says

     November 10, 2021 at 8:38 am

     Please let me know if I am understanding this correctly. My 2021 MAGI should not exceed an estimated $94,000 to avoid incurring any surcharge in 2023. The threshold to be applied to my 2020 MAGI is $91,000. Is that right?
     I wish to make a Roth conversion in 2021 without going over the IRMAA standard threshold for a single person. Thanks in advance for your response.

     Reply

     • Tom P. says

       November 10, 2021 at 12:33 pm

       Becky, you have this correct. The way inflation numbers are currently running the $94,000 for 2023 (2021 income) will most likely be higher by a few thousand, but $94,000 is certainly a safe number to use.

175. Dave says

     November 10, 2021 at 1:32 pm

     And is it still $182,000 max in 2021 for 2023 for married couples?

     Reply

176. Ros says

     November 10, 2021 at 3:23 pm

     It is double over singles for married. If you think single will be $94,000 then married should be double. But you should wait to make sure what Harry says.

     Reply

177. Jeff in delRey says

     November 10, 2021 at 6:37 pm

     I started converting my and my wife’s IRA’s to Roths in 2018 and managed to the top of the 24% bracket. I was proud of myself until the school of hard IRMAA knocks hit me in 2020 and this year. I over-corrected last year and left $15k on the table. Do I understand the 2023 IRMAA (2021 tax year) correctly? That the cliff for the 2.6 tier is $354k?

     Reply

     • Tom P. says

       November 10, 2021 at 7:17 pm

       Jeff, you have it correct. Wish I had your problem of trying to stay under $354K,ha, ha. In reality it will probably be a bit higher as inflation doesn’t appear to be going away anytime soon.

178. Tom P. says

     November 10, 2021 at 7:23 pm

     I have my own spreadsheet to compute the IRMAA brackets and for 2023 I have the same as Harry except I can’t get $119,000 for the 2nd single bracket… I get $118,000, which is the 2019 bracket multiplied by the overall CPI change from 2017-2018 to 2021-2022 (Sep & Oct), which is currently 1.105 (275.450/249.280).

     Anyone else computing this on their own?

     Reply

     • Giri says

       November 10, 2021 at 7:33 pm

       Tom,
       I believe Harry assumes 0% inflation from Oct 21 to Aug 22. which means the average Sep21-Aug 22 is (Sep 21 + 11* Oct 21)/12, which comes to 276.573. That will push it to $119,000.

     • Tom P. says

       November 10, 2021 at 7:53 pm

       Thanks Giri. That does push the 2nd bracket to $119,000 ( but note that the correct average is 276.399).

179. Harry Sit says

     November 12, 2021 at 5:27 pm

     Medicare announced the 2022 Part B premiums. The standard premium will be $170.10/month in 2022 (up from $148.50/month in 2021). All 2022 IRMAA brackets in this post matched the official announcement 100%.

     Reply

     • bev l says

       November 13, 2021 at 8:50 am

       OMG…that is a 14.545% increase! That must not be factored in the inflation rate of 6% given to social security recipients. Seems highly out of whack.

     • Paula Thompson says

       November 13, 2021 at 11:31 am

       Yep. Highly out of whack. I guess we could pay the government back by all signing up for Medicare Advantage, which costs the gov’t about 100.30 for every 100 spent by traditional (Medigap) plans.

180. Don G says

     November 12, 2021 at 5:30 pm

     Official CMS press release with the 2022 Medicare Part B and Part D premiums and IRMAA add-ons are at https://www.cms.gov/newsroom/fact-sheets/2022-medicare-parts-b-premiums-and-deductibles2022-medicare-part-d-income-related-monthly-adjustment

     Reply

181. Paul says

     November 13, 2021 at 9:34 am

     Bev, Medicare premiums are based on projected medical costs for the next year. Inflation is only one of the factors.

     If you follow the link provided by Don G (currently the last comment, just above this one), you’ll find an explanation. One factor is potential coverage of a new Alzheimer’s drug that was just approved by the FDA.

     Reply

     • RobI says

       December 20, 2021 at 11:02 am

       The new Alzheimer drug is not yet approved and has some efficacy concerns. The 2022 increase is a precautionary budgetary buffer, whihc i hope they dont use.

       IMHO congress need to intervene here and not let one drug dictate the premium cost for 50m+ medicare retirees

182. calwatch says

     November 13, 2021 at 6:27 pm

     So many Medicare Advantage plans are now rebating to their policy holders. Even SCAN, Anthem, Humana, and AARP are doing give backs, up to $125 a month per policy holder. If one is not a heavy consumer of health care and doesn’t have any non-treatable chronic conditions this could be an option.

     Reply

     • Marty Yeager says

       November 13, 2021 at 6:46 pm

       Yes, Medicare Advantage premiums have been falling, not surprising, since these managed care plans function as gatekeepers but hopefully do not sacrifice quality of care as access and referrals for care are restricted and or limited to their network. The problem is, you never know when you will get that serious diagnosis, and want treatment by some specialist/surgeon/facility that is outside the network. Waiting for open enrollment to switch to original Medicare may not be possible. Everything I have read says if you can afford it, original Medicare is the better option. I agree.

     • Tom P. says

       November 13, 2021 at 7:10 pm

       Until the “era of COVID-19” is over I’m keeping traditional Medicare plus my Regence Plan F. Most of the Advantage plans are crap, and once you switch and stay in for 12 months there is absolutely no guarantee you can switch back as Medigap plans can refuse to insure you.

       That said, the hospitals must make more money with Advantage plans because all my local facilities are pushing them, probably because they can “cheat the system” and overcharge Medicare by manipulating illness codes.

       Medicare is actually quite reasonably priced. When I was working my employer paid 3X for group coverage compared to what Medicare + Medigap costs me.

183. GeezerGeek says

     November 14, 2021 at 2:31 pm

     Wow, I am very happy to have found this site with all of its valuable information, albeit it would be better without the political commentary. I’ve been doing Roth conversions since 2011 to help reduce the expected RMD I’ll have in a couple of years. Initially, I was taking a large enough Roth conversion to take me to the top of tax bracket I was in. However, after the Trump Tax cuts (The Tax Cuts and Jobs Act of 2017 to use the lesser known name of the law), it made sense to take the Roth conversion up to the first IRMAA bracket. Figuring out what the number will be has been problematic until I found this site. At least now I have some basis of figuring out what that number might be. Thanks to the valuable information on this site, I now have a spreadsheet that has all of the information I need to estimate the IRMAA brackets.

     This year I’m considering taking a Roth conversion into the first IRMAA bracket all the way up to the second bracket. That would cause almost a 4% tax increase on the incremental income in the bracket (counting the IRMMA as a tax) but that may be better than the tax rate caused by the RMD and the loss of the Trump tax cuts. Of course I will be a bit conservative in my estimate since being $1 over can cost you over $2,000 in taxes (Not fair but that is the way it is.)

     So, THANK YOU, Harry Sit, for this valuable site and thanks to the commentators (Paul, Tom P, and others) who have helped clarify the calculation process.

     Reply

     • Tom P. says

       November 14, 2021 at 5:00 pm

       I guess I need to do some research on Roth conversions because I don’t understand how it will save paying taxes since in retirement I expect to always be in the same tax bracket year after year.

     • Paul says

       January 14, 2022 at 9:52 am

       I’m responding to both Tom and Geezer in this thread. I apparently missed it when it was posted.

       Tom, even if you pay exactly the same tax rate year after year, there can be some benefit to a Roth conversion — you will get tax-free growth between conversion and withdrawal. But, that is offset by the growth opportunity lost by paying the income taxes earlier.

       However, there is another consideration: Roth IRA withdrawals are not counted in the modified AGI used by IRMAA. So, you can easily lower your Medicare premium in the future by converting assets to Roth before you begin paying Medicare premiums — especially if required minimum distributions from traditional IRAs will force an unwanted increase in your AGI.

       Even if you are already paying Medicare premiums, you may find there is some “room” for you to increase your AGI in the current tax year without pushing you into the next IRMAA bracket two years later. But, it’s hard to do so safely unless you can predict the future IRMAA brackets with some certainty. And, that’s why Harry’s post is so popular!

       Geezer, I originally went down the rabbit hole to project IRMAA thresholds to determine if we could do a small Roth conversion in 2021. When I realized how close we were, I instead skipped some IRA withdrawals at end of 2021 (and postponed starting in 2022) to be sure we remained in the lowest tier.

       But although it’s too late for 2021, I wanted to warn anyone considering the same in 2022 and beyond: be sure you take all taxes into account. In 2020, we did a large Roth conversion because we were concerned about tax increases, and I inadvertently subjected us to the Net Investment Tax (3.8% on certain income, if AGI > $250K). I didn’t realize my mistake until our accountant gave me the bad news.

     • GeezerGeek says

       January 14, 2022 at 11:25 am

       Paul, Good point about the Net Investment Tax. Having encountered it after accepting a buyout that inflated my income one year, I was aware of the tax. I added extra income brackets to my LT-Cap-Gains/Divdnds table to account for the tax.

       The really bad part about the Net Investment Tax is that the threshold is not indexed. In just a few years, the Net Investment Tax threshold will be lower than the IRMMA threshold, being expedited by the higher inflation rates.

       When I did the spreadsheet on the cost of taking a Roth conversion into the first IRMMA bracket, the Net Investment Tax threshold was above the threshold of the second IRMMA threshold so it didn’t have an impact. However, since that second IRMMA threshold is projected to be at least $240,000 (for 2021 income) with just a 1% inflation rate, it is probable that the Net Investment Tax threshold will be below the second IRMMA threshold for 2022 income if inflation remains high. So, so for future Roth conversions above the second IRMMA threshold, the Net Investment Tax probably will be a factor.

     • Pat says

       January 19, 2022 at 10:20 pm

       When doing a large Roth conversion that would boost your Adjusted Gross Income considerably, you should find out what the thresholds are for other hidden taxes that might get triggered. In addition to the Medicare tax and the 3.8% Net Investment tax there could also be limits on your deductions. Depending on the state you live in, it may also have many hidden taxes that kick in if your AGI exceeds the thresholds they have set. There is also an Alternative Minimum Tax than can apply to some people, though from my limited understanding of how it works, a Roth conversion might actually reduce that tax if you are subject to it. It is a very complicated tax. I knew someone who had to pay it one year. When they were audited a couple years later and the IRS disallowed a $5000 deduction they had taken, instead of owing more in taxes, they received a refund. Good luck in modeling that tax in a spreadsheet.

     • GeezerGeek says

       January 20, 2022 at 9:03 am

       As Pat points out, the AMT is convoluted but I was able to model it in a spreadsheet using a blank FORM 6251 as the framework and completed FORM 6251’s that were created by my tax software. (If you already know the answers, it can help you to figure how the calculation works). There are a lot of twists and turns in the calculation, such as if this number is greater than that number but less than this other number then do this but if not then…. Look through the forms your tax software creates and you can probably find a completed FORM 6251.

       I’ve only had to pay the AMT two years: Once when I accepted a relocation package and again when I accepted a buyout offer. The Tax Cuts and Jobs Act (Trump Tax cuts) increased the exemptions so that not as many people are subject to the AMT but like other parts of the Act, those changes expire in 2025 so the AMT may become more of a factor in the future.

184. Marty Yeager says

     November 14, 2021 at 3:00 pm

     I’m guessing hospitals that push Advantage plans have negotiated higher reimbursement than what they get from CMS. If you are comfortable with managed care, you may save on premium costs. But old age is when the serious diagnoses are likely to appear, and I will keep by original Medicare/medigap with freedom to choose providers and no gatekeepers.

     Reply

185. Paul Thompson says

     November 14, 2021 at 3:11 pm

     Can you reconfirm that you have a 12-month period to bail back in to Medicare/Medigap, if you try out Medicaree Advantage? With this whopper increase in Part B for 2022 (mainly caused my a v unhelpful drug approved by Medicare for Alzheimer’s), I have to find funds somewhere. I find Medicare/Medigap (Plan F for me too) just too expensive.

     Reply

     • Tom P. says

       November 15, 2021 at 12:39 pm

       Paul, please see page 78 of the “Medicare and You Handbook 2022.”

     • Marty Yeager says

       November 15, 2021 at 12:40 pm

       My understanding is that when you initiall qualify for Medicare B and Medigap, there is no medical underwriting. Guaranteed issue at that time for Medigap or Advantage. Basically, you choose the insurer you like with the price you like. But if you choose to change Medigap policies, as my husband and I did after 3 years (chose Plan N to save on premiums), you are subject to underwriting questions from the Medigap companies, and they may not issue you a policy. So, switching from an Advantage plan to a Medigap policy is not a slam dunk, depending on your health history.

186. Marty Yeager says

     November 14, 2021 at 6:36 pm

     Roth IRA conversions save on taxes, after the first hit when you convert, because capital gains are tax free thereafter. According to the current law. However, I am not jumping on this bandwagon after Congress eliminated the “stretch” IRA. I do not trust Congress to keep their word on the Roth, especially with our current deficit and BBB spending plans.

     Reply

     • GeezerGeek says

       November 15, 2021 at 1:09 pm

       Yeah, you can never trust Congress. The tax on Social Security was implemented with what looked like a high threshold in both the 1983 law (50% taxable) and the 1993 law (85% taxable) but neither threshold was indexed so more SS recipients every year move over the thresholds as the COLAs increase their benefit.

       I do think it is possible that Roth distributions will be added to the MAGI for IRMAA since they are already including non-taxable muni interest income. I think Congress would have a harder time justifying any tax on Roth distributions since the funds have already been fully taxed. I would not be surprised if Congress eliminated the back door Roth or curtailed future investments in Roths. However, the more popular Roths become, the harder it is for Congress to change them.

       It was easy for Congress to justify the 50% tax on SS benefits since SS participants only contribute 50% of their already taxed income to SS and the company they work for contributes the other 50%. It was a bit harder to justify the tax on 85% of the SS benefits since 35% of that had already been taxed. Of course, Congress could justify that on the basis that the SS benefit is more than what the recipient paid into the fund, not that Congress has any need to justify anything they do.

187. Ros says

     November 14, 2021 at 6:54 pm

     You never know what bracket you may be in during retirement. SS goes up and you either pay tax on 50 or
     85% of your SS check depending on your taxable income. If you are married your tax bracket will change if your spouse dies before you. Congress can change rates. RMD’s change every year and it goes by your age and your balance of your IRA’s from the previous 12/31 and or other retirement plans. All income like Roth IRA’s do not count as income. Even the IRMAA law may change. You have to take advantage of the laws when they are in effect if you think they will benefit you.

     Reply

     • Tom P says

       November 16, 2021 at 5:50 pm

       Ros, your key statement is “You have to take advantage of the laws when they are in effect if you think they will benefit you.” Taking a quick look at my situation I don’t see a monetary benefit if I have to pull from my accounts to pay the tax on a $90K Roth in-plan conversion. If I do a smaller conversion and pay the taxes with cash on hand then I’m ahead. But either way the Roth would provide some added flexibility, so I will consider it next year after more spreadsheet modeling. I’ll need to decide before my first 1040-ES payment in April as that would need to be adjusted to cover the expected taxes.

188. CapeRetiree says

     November 14, 2021 at 9:24 pm

     Tom P,
     I have done a spreadsheet for a large ($128K) Roth conversion this year, then $40k per year after that, and the tax free money I can accumulate in the Roth using a lower investment return rate than I am averaging now, while only paying 22% Fed tax rate once for the conversions, and us both paying the IRMAA bump on Medicare in 2023 for our 2021 return MAGI being in the 1.4 surcharge is more than covered with all the tax free money that will build up in the Roth account, while giving me flexibility to use the Roth $$ if needed to stay within brackets on future returns when needed to avoid IRMAA or Fed bracket creep. Next year starts my RMD years, so I will need to do the big one now, to make more money available for the conversion.

     Reply

     • GeezerGeek says

       November 15, 2021 at 12:17 pm

       Hopefully, the SECURE Act 2.0 will soon get passed by Congress and you will get another year of Roth conversions, age 73.

       I will consider continuing Roth conversions even after I start RMDs. Will need to run the numbers at that time. May consider a qualified charitable distribution to adjust where I fall in the tax brackets and IRMAA brackets.

       If you plan to leave an inheritance, the Roth funds would also benefit the inheritors. There has been talk about eliminating the inherited step-up in basis on capital gains so I would think that Roth inheritances may be a safer way to pass a tax free inheritance.

     • Tom P. says

       November 15, 2021 at 7:02 pm

       Thanks Cape. Considering the money I would need to pay the in-plan Roth conversion taxes would probably come from a withdrawal from my 401(k), I don’t really see how it would be that beneficial. Say I withdrew an extra $24K next year to cover a $100K conversion, that $24K won’t be making any (hopeful!) return, and all that extra “income” will push me into a higher tax bracket and require an IRMAA adjustment, something I avoided for 2021, 2022 and 2023 by filing the SSA-44 after I retired in July 2020 and my income dropped considerably this year.

       Guess I’ll put together a spreadsheet to see if it might make sense in the long run… Lord knows I have spreadsheets for everything else, LOL. The good thing (I guess) is what little money I did put into my 401(k) as a Roth contribution in 2017 will hit the 5 year mark January 1, 2022, so whatever I choose to convert next year would be immediately qualified. Ain’t retirement fun!

     • GeezerGeek says

       November 15, 2021 at 9:56 pm

       Tom P, you are right. Roth conversions are a wash if you remain in the same tax bracket but are an advantage if you move to a higher bracket in the future. However if you have to pay the taxes with funds from tax sheltered funds, IRA or 401k, then you also have to pay the taxes on money you withdrew to pay the taxes and, as you pointed out, you lose the future potential earnings of all of the money you withdrew to pay the taxes. A Roth conversion that would have been a wash can become a net loss when using tax sheltered funds to pay for the conversion. So the general rule is don’t use IRA/401k funds to pay for a conversion unless you were required to withdraw those funds because of an RMD. However, I say “general rule” because under some circumstances, it can make sense. You might have to do that spreadsheet to figure out what make sense for your situation: A smaller conversion or no conversion at all.

       Excel is my friend. I created a spreadsheet that projects my future income over the next twenty five years including the RMDs that are going to put me in tax and IRMAA brackets where I don’t want to be. That is the reason that I’m trying to do Roth conversions as large as I can afford to do. However, everyone’s financial situation is different. You just have to figure out what make sense for your situation and it sounds like you have got a pretty good handle on that.

     • Tom N. says

       November 16, 2021 at 4:50 am

       Tom P, you wrote: “The good thing (I guess) is what little money I did put into my 401(k) as a Roth contribution in 2017 will hit the 5 year mark January 1, 2022, so whatever I choose to convert next year would be immediately qualified.”

       By “qualified,” do you mean immediately available without another 5-year waiting period? I am new to all this and thought, perhaps incorrectly, that each Roth conversion amount has a 5-year no-withdrawal period associated with it, which needs to be tracked. Can someone clarify?

     • Tom P says

       November 16, 2021 at 10:59 am

       Tom N asked about the Roth 5-year taxable period. I don’t know how this works for an IRA but for my former employer’s 401(k) plan, of which I am still a participant, I have a table that outlines the scenarios. For source type: “In-plan Roth Conversion made within the last 5 tax years (including current tax year)” the table column for “> 5 yrs Roth participation & > 59.5 or other exception” the earnings are a “qualified distribution, no tax and no penalty. Qualified is 5 years of Roth participation AND paid after 59-1/2 or due to death or disability.”

       There’s a footnote at the bottom of the table regarding participation: “The five taxable year period begins on January 1 of the first year in which you made a Roth contribution or a Roth conversion…”

       You need to confirm how your own plan works.

189. GeezerGeek says

     November 15, 2021 at 11:34 am

     Tom P, I can’t predict the future but I don’t expect the Trump Tax cuts for individuals that expire in 2025 will be renewed. For the past two years, US deficit spending as a percent of GDP is higher now that it has been any time since WWII. A large part of that was due to COVID 19 but with the Infrastructure Investment and Jobs Act and no additional sources of revenue, that trend may continue.

     Then there is the US national debt, which as a percent of GDP, is higher now than it was during WWII. The only thing that made such a huge debt more manageable is the historically low interest rates the US Treasury is paying. Now with inflation kicking, how much longer will those low interest rates be sustainable? If the Treasury rates return to the level they were in the early 2000’s that cost of serving that debt will double. If the Treasury rates return to the level they were in the 1990’s that cost of serving that debt will triple. Hopefully, the rates will never return to the level they were in the early 1980s, but if they did, the cost of serving the debt would be more than 5 times the current cost.

     Then there is Social Security, which we all have know for years is under funded.

     Then there is the continuing problem with supporting the costs of the Affordable Heath Act, which continue to rise.

     So where will the money for these future needs come from? Many think it can be fixed by raising the tax on the one percenters but if you think that then read the following article. (I’ve seen this analysis by others but this is the first one I found now by Google.)

     https://www.crfb.org/blogs/can-we-fix-debt-solely-taxing-top-1-percent

     To me, it seems inevitable that tax rates are going up in the future, and not just for the one percenters. Just the expiration of the Trump tax cuts in 2025 alone will cause future rates to increase.

     Reply

     • Vincent J Pellettieri says

       November 15, 2021 at 1:20 pm

       This is all very frustrating to try to plan for those who have worked hard and saved all their lives. It seems like if you goof off the government has a bailout program for you. Any popular ideas that are used to try to limit excess taxation are criticized and then they try to eliminate it.

190. Ros says

     November 16, 2021 at 5:58 pm

     Tom P,
     I have done my Roth conversions since it was allowed and never have I used IRA money to pay the taxes. I always over pay my income taxes so I do not have to worry about owing at tax time.
     I believe that is the only way that the conversion makes sense. I am not wealthy so I stay under the number to make my Medicare premium go up as I am retired. I am doing this for my kids as they are near 60. I want them to have a choice of money to use that is not taxable if they need it and it could delay the IRA distributions and perhaps Social Security if they retire early.

     Reply

191. Larry L says

     November 17, 2021 at 10:37 am

     I can readily see Congress including T-IRA and R-IRA earnings, gains and distributions as part of a “means test ” for Social Security in the not so distant future when the program “runs out of money” (whatever excuse that means). Roth conversions make sense now for me and I’m continuing onward…

     Reply

192. Jane J says

     November 18, 2021 at 7:24 am

     How risky it is trying to gauge the 2023 IRMAA brackets when they are not calculated/announced for another 12 months! Ordinarily, my MFJ tax household will qualify for no IRMAA premium, but for this tax year 2021, we have decided to substantially raise our AGI and move into x1.4. I turn 63 in 2022 and so IRMAA in 2023 will only affect my spouse. Thank you to Harry for creating this website and to the other contributors for the subsequent discussion. I feel confident that I have a plan for year-end which neither goes (just) over a threshold nor leaves too much money on the table.

     Reply

193. GeezerGeek says

     November 18, 2021 at 9:13 am

     Jane J, If you know how the brackets are calculated, then there is very little risk. The data to calculate the brackets that will be announced in November 2022 will be the CPI-U from September 2021 to August 2022. We already have the CPI-U for September and October 2021. Next month we will get the data for November 2021 so we will have the data for 3 of the 12 months that will be used to calculate the brackets for next year. You can take that data, assuming there is no inflation at all for the other 9 months (unlikely), and calculate what the brackets will be. Assuming that there is no inflation for the next nine months is very conservative estimate so there is very little risk. I think the only real risk is if Congress changes the law about the IRMAA. That is possibility but I don’t think it is a probability since I have not heard of any discussion from either political party to do so.

     Reply

     • Marty Yeager says

       November 18, 2021 at 11:12 am

       Deflation is the other, but unlikely, risk. And what Congress will do, retroactively, never ceases to surprise me.

194. Peter G says

     November 20, 2021 at 10:34 am

     I received an IRMAA notice for 2022, using my 2019 income, not 2020. (In 2021, I believe they used my 2018 income, presumably due to COVID.) I’m reluctant to appeal because my 2019 income situation did not meet any of the life-changing events they list. Do I have grounds to appeal anyway, given they are going back 3 years not 2? Thank you!

     Reply

     • Harry Sit says

       November 20, 2021 at 10:53 am

       SSA says you should call or visit their local office if they used stale information. It’s not the same as appealing based on life-changing events.

       https://www.ssa.gov/benefits/medicare/medicare-premiums.html

195. Tom P says

     November 20, 2021 at 4:21 pm

     We also received our SS COLA and IRMAA letter for 2022 online today. SS really screwed up as they said we need to pay IRMAA based on my 2020 income, but we already filed a SSA-44 form October 15th due to retirement and major reduction in income this year, and we have already received a refund of our 2021 IRMAA based on our estimated 2021 income, which will be below the MFJ lower limit for 2022. So, why did the SSA say we have to pay IRMAA at the 3rd tier level based on 2020 info when they already had newer information? The whole point of filing the SSA-44 was to correct IRMAA for 2021 (which SSA did), but also to prevent IRMAA for 2022. Guess I need to call my local office Monday; might be a case of these auto-generated letters not taking into account newer information?

     Reply

     • AnnaC says

       November 21, 2021 at 1:16 am

       I believe you need to file a new SSA-44 form for the 2nd year as they don’t carry it over to the next year. Once they review it you’ll be back on track with IRMAA being reversed for 2022.
       I filed a form due to job loss and had to do it two years in a row to stick. While you would think it’s in your file & would be taken care of they must need to confirm it each year on an individual basis.
       If being billed I would only pay the standard premium as the IRMAA will be reversed. If collecting SS with an auto deduction you will need to wait for their reversal for the excess charge.

     • Tom P says

       November 21, 2021 at 12:10 pm

       Anna, could you be a bit more specific about having to file SSA-44 two years in a row? I don’t see what information we would change on the forms. On our forms for “STEP 2: Reduction in Income” I filled in Tax Year 2021 since that was the first year after retirement and drop in income, and SSA approved that reduction for 2021 based on my estimated income and we received refunds for 11 months two weeks after receipt of the forms by our local office… so pretty quick action.

       It may be that the online SSA letters we received Saturday were generated before receipt of our SSA-44s. The reason I say this is the form says, “We ill use your estimate provided in Step 2 to make a decision about the amount of your income-related monthly adjustment amount the following year until: IRS sends us your tax return information for the year used in Step 2.” Based on this statement we should not have to pay IRMAA for 2022 as our income for 2021 is below the MFJ lower limit in 2022.

       I’m going to call my local SSA office Monday and see what they say as I would like to get this cleared up before the end of the year.

     • AnnaC says

       November 21, 2021 at 3:27 pm

       The 2nd year had to fill in new estimated income for the current year (would be 2022 estimate for you now) so they can use that number vs. actual MAGI on tax return as of 2020.
       The life changing event was the same; the #s changed based on a new year.
       When you filled out the form Oct 15th did that reflect estimated income for 2022? If so then things may have crossed in the mail. If this is the case then booking an appointment for a call re the topic is all that may be necessary. If call the general 800# they will create an appointment with your local office; if call the local office they too will book an appointment as the folks who do the review not the same as who answers the call and/or need a one-on-one appointment to discuss.
       The first year I went in person (pre-pandemic) and the 2nd year I did a one-on-one call via appointment with my local office. If I recall correctly I had to fax the form in advance of our call. Regardless of what I filled out the rep reviewed every data piece on the form & the IRMAA reversal was done.
       Hope this helps!

     • AnnaC says

       November 21, 2021 at 3:35 pm

       Since you retired in 2021 your MAGI on your 2020 tax return falls into being assessed IRMAA.
       They review income each year to make their excess premium charge decision.
       If you fill out a new form of life changing event with the current numbers (estimated income for 2022) you should be ok.
       Since its a two-year look back you go through the exercise two years in a row for the same life changing event.
       Definitely book an appointment for guidance.

     • Tom P says

       November 22, 2021 at 11:21 am

       Thanks Anna. Actually, I officially retired July 1, 2020, but my retirement was also coincident with a layoff, so my income in 2020 was actually higher than 2019 because I was paid 26 weeks of severance pay in addition to many weeks of UI payments, so my income didn’t actually drop until this year.

       I did provide an estimate on the form for my 2022 income, which was lower than my estimated 2021 income, however, I’m now thinking of making a 2022 in-plan Roth conversion which will raise that estimate.

       I think I’ll wait a bit before calling the SSA to see if I get an updated IRMAA notice.

     • Bill C. says

       January 12, 2022 at 8:46 am

       Tom, I couldn’t find a way to reply to your reply to message 207 and this comment has nothing to do with your post 195. It has to do with your IRMAA spread sheet. I also use a spreadsheet to track CPI U and predict the future IRMAA amount. One thing that I have wondered about is something back in the foggy part of my memory. I seem to recall that the future amounts as calculated by SSA don’t start with the rounded published amounts for the previous year but rather the exact amounts for the previous year (as calculated). So, the previous year amount could be plus or minus up to $500 different from the published amount and we don’t get to see that number. It of course doubles to $1000 in the MFJ amounts. I therefore create a projection based on the lower rounding limit of the previous year and another based on the upper rounding limit. It helps me in making a judgement about what value to plan on. It also could be argued I’m putting too fine a point on the process. Your thoughts?

     • Paul says

       January 12, 2022 at 8:58 am

       Bill, IRMAA brackets are not calculated year-to-year. They start with the base CPI in the year ending August 2018, or rather the average CPI from September 2017 to August 2018, which was 249.28.

       The new average CPI is used to calculate a percentage increase since August 2018. The resulting percentage increase is then applied to the IRMAA brackets for tax year 2018 (The first tier was $85,000).

       Finally, that’s rounded to the nearest $1,000 for single, and the married bracket is 2X the single bracket.

196. Ruffles says

     November 20, 2021 at 9:30 pm

     This is just a precursor to the day when rich people no longer receive any Social Security. Which is as it should be when you live in a bankrupt country.

     Reply

197. powderriver says

     November 21, 2021 at 7:29 am

     I am realizing that it isn’t so much that the country is bankrupt, but that the people who inhabit it are.

     Reply

198. Rosemary says

     November 21, 2021 at 8:20 am

     I am near 80 and have everything I need or want. I add everything up in Jan or Feb that I spent the year preceding year and I have only gone over $20,000 once and that is when I spent $4500 on a dining room suite and only hit $22,000 that year. My taxes are $5700 a year and my medicare that pay for everything is $6300 a year. I live in Michigan and heat a 2100 square foot home with a heated walk out basement on the budget plan for $37 dollars a month. I have a big freezer and averaged $9.77 a week last year for groceries. I pay for mowing and snow plowing cuz my doctor won’t let me do it anymore, but may try to use the leaf blower on the driveway and sidewalk this year. I eat salmon and rib eye steak and buy when it is on sale and freeze it. I always have a full 30 foot freezer and only buy on sales and or coupons and when I am low on something and only go to the store to purchase fresh fruit, milk or bread and that is only 2 month and sometimes less. I even freeze grapes when they are on sale. I use steam fresh vegetables. This week I bought a 20 lb turkey 23 lbs of sweet potatoes, cheese it crackers for my grandson 5 lbs of russet potatoes and 2 pkgs of creme cheese for the potatoes for $3.57 after the sales and coupons. I have more money but just add up the following year to see what I spent. I no longer travel and do not care to as we traveled a lot when my husband was alive. We and now I continue to gift both boys every Jan 2 the limit the gov allows without more tax forms and I convert to a Roth since 2011 or 2012 and still pay the lowest for Medicare premiums. I think we live and die by the choices we make and I get pleasure in hiking, walking 3 miles a day and do it in the house during the winter and going to the free concerts at the colleges in town, and in the several parks in our city and in the cities all around us within 20 miles or less in the summer, in reading, and for the last week raking 5 hours a day and just bought an electric blower that blows 220 miles an hour. Wish I had it the first of the week. Just yesterday I now have a 50 foot line about 4 feet wide of leaves after bringing 19 tarp loads to the woods just from the side yard. Hate oak leaves.
     We never made over $60,000 a year and my husband was put on 100% disability in 1995. We paid for both boys to go through college but they had to have a 3.5 in high school and college, never get in trouble, no car and stay on campus. If they could afford a car or an apartment they could afford to pay for college. Once in graduate school they could have a car. Once worked 96 hours in the summers and other worked 105 hours during the summer.

     Reply

     • Rosemary says

       November 21, 2021 at 8:31 am

       Should have said property taxes are $5700 a year.

199. AnnaC says

     November 21, 2021 at 8:40 am

     Kudos Rosemary!
     PS I have oak leaves too…..& acorns more…..
     Stay healthy!

     Reply

200. AnnaC says

     November 21, 2021 at 8:40 am

     meant hate oak leaves…..

     Reply

201. Lynda says

     November 22, 2021 at 8:39 pm

     I received an IRMAA notice basing my 2022 Medicare premium on my 2020 income tax, BUT I was not a Medicare beneficiary in 2020. I was not enrolled in Medicare until 2021…this year…which the tax year is not over yet. This cannot be right.

     Reply

     • Tom P says

       November 23, 2021 at 9:34 am

       Linda, that’s the way the system works unfortunately. I didn’t sign up for Part B until I was 73 since I was still working and covered by my employer’s group policy. After I retired and Part B became effective in August 2020 my IRMAA charges for the rest of the year were based on my 2018 income. IRMAA adjustments, if any, are always based on income 2 years prior unless you have one of the qualifying events such as loss of income due to not working, change of filing status, etc.

     • Tom P says

       November 24, 2021 at 4:59 pm

       So Linda, if you first enrolled in Medicare this year are you paying IRMAA in 2021 based on 2019 income or were you under the limit this year?

202. Lynda says

     November 23, 2021 at 11:52 am

     Thank you very much for taking the time to respond to my message. I have been seriously stressing over this since I received the notice 5 days ago. I wasn’t even eligible in the tax year they are using. It makes me feel as though I’m paying Medicare premiums for a year that I wasn’t eligible, receiving, getting any benefit from, or paying premiums for. 😤 Your reply did help me to stress less about it though. I appreciate you.

     Reply

     • The Wizard says

       November 23, 2021 at 12:19 pm

       Assuming your income from two years ago while still working was way higher than it is now, just file form SSA-44 with a proper explanation and you should be good…

203. Larry says

     November 24, 2021 at 10:46 am

     Harry, In your post 172 you mention that you will recalculate in December after the inflation numbers are released. Would you have some idea as to when in December we might see the results of that recalculation? Personally, we are holding-off making the 2021 conversion pending a final best-guess of 2023 IRMAA. Thanks.

     Reply

     • Harry Sit says

       November 24, 2021 at 10:58 am

       The inflation data point comes out on Friday Dec. 10. I’ll update on the same day or by Monday Dec. 13 at the latest.

     • Tom P says

       November 24, 2021 at 5:06 pm

       Larry, if you are planning on making an in-plan Roth conversion in December you should check with your plan and find out the drop-dead date for a 2021 conversion. I know my plan has one after which the conversion won’t be effective until the following year.

204. GeezerGeek says

     November 24, 2021 at 10:59 am

     This site gives you the release dates: https://www.bls.gov/schedule/news_release/cpi.htm

     Here is what site lists as the dates for the next few months

     Mth Data (MMM-YY) Released (MMM-DD)
     ———- ———————-
     Nov-21 on Dec-10
     Dec-21 on Jan-12
     Jan-22 on Feb-10
     Feb-22 on Mar-10
     Mar-22 on Apr-12
     Apr-22 on May-11
     May-22 on Jun-10
     Jun-22 on Jul-13
     Jul-22 on Aug-10
     Aug-22 on Sep-13
     Sep-22 on Oct-13
     Oct-22 on Nov-10
     Nov-22 on Dec-13

     Reply

205. Larry says

     November 27, 2021 at 7:09 am

     Tom, thanks for the heads up on the last minute conversion cut-off timing. Its Vanguard, will confirm with them…

     Reply

206. Jack B says

     November 28, 2021 at 12:30 pm

     I understand from many websites that MAGI for IRMAA = AGI + exempt interest. With that said, I’m unable to find the root source of this information, such as an IRS or Medicare rule; or something on their sites along the lines of sample calculations or IRS Pub references. If someone knows where I can find the actual rule or official direction on this matter I would appreciate it.

     Reply

     • Harry Sit says

       November 28, 2021 at 12:43 pm

       Social Security Act, Section 1839.

       https://www.ssa.gov/OP_Home/ssact/title18/1839.htm

       Look for “(4) Modified adjusted gross income.”

207. Jim M says

     December 5, 2021 at 12:09 pm

     I have read your article with great interest. Thank you for sharing it. I am especially interested in your estimates for the 2021 MAGI Income / 2023 Medicare Premium Year. I am pleased to see that you are planning to update your estimates sometime after the latest inflation adjustments are announced on Dec 10. I look forward to seeing them.

     It amazes that you are able to provide inflation estimates for next year before the year has even begun. Can you point to a government document that describes how these inflation adjustments are actually calculated? I have been surprised that the government announces the IRMMA inflation adjustment in arrears as opposed to announcing the 2021 MAGI Income Brackets before year end so that people can plan for them with some certainty.

     Reply

     • Tom P says

       December 5, 2021 at 2:00 pm

       Jim, the calculations are pretty simple, you just need to know where to find the data:
       1) Current CPI-U is here: https://www.bls.gov/news.release/cpi.t01.htm. You’ll find the Dec 10 update listed here first.
       2) Historical table for CPI-U is here: https://www.bls.gov/regions/mid-atlantic/data/consumerpriceindexhistorical_us_table.htm. The data usually has a few days lag in publishing compared to 1).

       The adjustment is based on the average of Sep through Aug numbers of one year compared to another, so to get an estimate of the 2023 adjustment you can look at the values from Sep 2020 to Aug 2021, which has an average of 265.447. Then for 2023 we can use 2 data points for Sep and Oct 2021 (so far), whose values were 274.310 and 276.589; the average is 275.450.

       Divide 275.450 by 265.447 to get 1.038 (you could also extend the latest 276.589 for the rest of the months to get a bit higher average number, which would mean zero inflation going forward, and also zero negative inflation).

       Technically, the adjustments are based on the current year calculations compared to the 2019 BASE YEAR brackets and inflation numbers, but you’ll get the same estimate for 2023 by applying the factor from this year compared to last year and applying that to the recently published 2022 SINGLE brackets, with the result rounded to the nearest 1000. Those adjusted single brackets are then doubled to get the MFJ brackets.

       As an example, multiply $91,000 (2022 lower Single bracket) by 1.038 and you get $94,000 rounded to the nearest 1000 for 2023 estimate ($188,000 for MFJ). Continue for all the other tiers. You can extend this out as far as you want assuming future inflation numbers. Have fun!

     • Jim says

       December 8, 2021 at 1:33 pm

       Tom P. Thanks for you very informative and helpful reply.

208. Marty Yeager says

     December 5, 2021 at 1:35 pm

     Ya gotta scroll through comments above to see that Harry has taught us IRMMA wonks how to do the calculations! Never be in the dark again with this powerful tool.

     Reply

209. Doug Miller says

     December 5, 2021 at 4:01 pm

     Thanks for this very helpful article. I read a lot of retirement related stuff, but haven’t seen anything this good on IRMAA. Did not know that income from 2 years ago would be subject to current year IRMAA brackets. I have been managing current year income to current year brackets. So, I have more breathing room than I thought. I can safely take another $6K out of an IRA this year, for example. Mike Piper links to a lot of your articles from his Oblivious Investor e-mail, which brings me to your site on a regular basis. Anyway, thanks for a lot of good stuff.

     Reply

     • Jim Eggen says

       December 7, 2021 at 10:33 am

       Understanding IRMAA would probably become a whole lot clearer if someone, like the government maybe, would do these two things:
       1. NEVER use vague and undefined terms like “income”. Instead, always define it (eg total income, AGI, modified AGI, etc) and state clearly which specific line # it can be found on in any and all applicable tax return forms (1040 etc)
       2. Tables are nice, but write them clearer and provide lots of footnotes such as: the “income” vaguely referred to here is defined as ….., and can be found and clearly picked off of your 1040 or other applicable tax return at line x, or maybe go to line y and subtract 85% of your SS income, or go to line z which is defined as … , etc. Get the idea?
       Be assured that this IRMAA thing is very ANNOYING and CONFUSING, at least to some of us who are challenged (We can’t all be above average) However, that’s a nevermind. It should be clearer. Even my tax account couldn’t understand and explain it with any clarity. But he just puts numbers in his software and turns the crank. Getting IRMAA right is not in his job description. One thing I found doesn’t help but seems to sum up IRMAA best: “The beatings will continue until morale improves”. I am bruised.

210. Bick says

     December 8, 2021 at 3:40 pm

     Following – Great thread, Thanks Harry and other contributors. Spent the last couple of hours building my spreadsheet as a way to nail down how it works. Looking forward to this weeks CPI-U number.

     Reply

211. Harry Sit says

     December 10, 2021 at 6:50 am

     Last update before the end of 2021 with the latest inflation data point. Slight changes upward in the 0% inflation table for 2023. No changes to the 5% inflation table for 2023.

     Reply

     • Paul says

       December 10, 2021 at 7:45 am

       Thanks for the tip, Harry!

       I put the new CPI-U into my worksheet, and tried various average inflation rates for the remaining months (until August, 2022). If the average inflation rate is in the stated range, the first IRMAA threshold will be:

       0.0% – 2.9% $190K
       3.0% – 6.2% $192K
       6.3% – 9.4% $194K

       Of course, the second and third thresholds change at different average inflation rates.

     • Larry says

       December 10, 2021 at 9:05 am

       Thanks Harry for updating your tables quickly on this. We will probably use 0% and leave some room for surprise income to stay under our target AGI. We would have trouble sleeping going higher since the CPI-U inflation seems highly influenced upward right now by energy and its (sometimes volatile) commodities, and looks to be slowing.

     • EdFogle says

       December 11, 2021 at 2:49 pm

       Just to confirm, these are the max your MAGI can be in 2021 before entering tier 1 IRMAA charges in 2023. Am I correct?

212. bickp says

     December 10, 2021 at 8:30 am

     I used the November number (277.948) for all remaining months as described in an earlier post which assumes no more inflation. I only track the lowest three categories and found that Level 1 grows to $95K with rounding, Level 2 stayed at $119, Level 3 grows to $149K with rounding. Other spreadsheeters, do you agree with those calc’s based on that assumption?
     bp

     Reply

     • Tom P says

       December 10, 2021 at 8:39 am

       bickp, the short answer is “yes” I agree with your numbers 🙂

       I’m more interested in the 2024 brackets as 2023 is already fixed for me. I’m planning to do a Roth in-plan conversion next year and I want to stay within the 2nd tier bracket. Right now I’m looking okay for the amount I am planning to convert.

     • Bev Lolr says

       December 10, 2021 at 11:50 am

       bickp ~ Are these numbers for Single filers. If so, would they be doubled for married, filing jointly? Thank you for your guidance on this maddening IRMAA stuff.

     • Bick Pratt says

       December 12, 2021 at 10:18 am

       Hi Bev Lolr : Mike calc’s are for a single filer. I am not sure about whether you simply double for a married couple. Anyone else know the answer to Bev Lolr’s question?

       bp

     • Tom P says

       December 12, 2021 at 11:25 am

       Bev asked about the MFJ (married filing jointly) brackets. All IRMAA adjustments are first applied to the single brackets, which are then rounded to the nearest 1000. The MFJ brackets are double the adjusted and rounded single brackets.

213. GeezerGeek says

     December 10, 2021 at 1:59 pm

     OK, I’ve finished my spreadsheet and have decided that extending my Roth conversion into the first IRMAA bracket for 2021 probably cannot be justified with future tax reductions. Here is how I came to that conclusion. Please let me know if I’ve overlooked anything or I’ve got something wrong.

     I’m treating the IRMAA adjustment as an additional tax and I’m assuming that I would be able to take the Roth conversion in 2021 up close to the limit of the first 2023 IRMAA bracket which I’m currently projecting to be from $190,000 to $240,000, a span of $50,000. Since we don’t know what the 2023 Parts B & D costs will be, I used the 2022 numbers as a basis, knowing that they will probably go up in 2023. This scenario also has the taxes for the conversion being paid without using any tax-sheltered funds (IRA/401k) which would make the numbers for the conversion even less favorable. I’m also assuming that there wouldn’t be any major tax increase in the present 22% income bracket other than the demise of the Trump tax cuts, which changes it to the 25% bracket.

     The future (2023) cost of exceeding the lower IRMA for a joint filing in 2021 is ($238.10 minus $170.10) times 2 (for two people) per month for the Part B and $12.40 times 2 per month for Part D. For the year, that would be a total of $1,928.60 for a couple. If you spread that cost across the bracket of $50,000 (assumes first bracket begins at $190,000 and ends at $240,000), you get an incremental tax rate of 1,928.6/50,000 = 3.86%.

     That’s kind of a best-case scenario because the cost of Parts B and D probably will increase in 2023 and the limits of the bracket may be different than what is estimated which would mean that the cost would be spread over a span of less than $50,000. Also, for some couples, taking your income up to $238,000 this year can cause a change in your tax bracket from 22% to 24%. It would not for me because of the deductions I have and the amount of non-taxable muni income that would keep me below the 24% rate.

     An increase of 3.86% wipes out the Trump tax cuts so it is best for me to stay below the IRMAA limits. That doesn’t leave much room for a Roth conversion this year because I took a capital gain earlier in the year. Looks like I will continue my strategy of taking Roth conversions only up to the IRMAA limit. At least now, thanks to this article and all the commentators, I have a better idea of what that limit will be.

     In the future, if I’m ever forced into IRMAA by a RMD or other unexpected income event, I would probably do a Roth conversion up to the top of the IRMAA bracket I’ve been forced into. That may help me avoid future incursions into IRMAA. The worst-case scenario is exceeding the IRMAA limit by a dollar and incurring the full penalty of IRMAA for one dollar of additional income. (Ouch!) Taking a Roth conversion to the upper limit softens that blow.

     Since the costs of Part B & D seem to be increasing faster than the IRMAA brackets, the IRMAA tax as a percent of income will probably continue to rise, which would suggest that doing a Roth conversion into the IRMAA will become even more costly in the future.

     Reply

     • Tom P says

       December 11, 2021 at 10:36 am

       I’ve been looking at a Roth in-plan conversion for next year since my current Roth funds will become fully qualified on January 1, 2022, making any addition funds also fully qualified. For my situation it only makes sense to put more funds into Roth as a hedge against the tax bracket and IRMAA shifts that will ultimately occur when one of us “meets his maker,” or perhaps to protect against running up against an IRMAA bracket when for whatever reason we decide or need to withdraw some extra money one year and could use the tax free Roth funds.

     • calwatch says

       December 21, 2021 at 11:43 pm

       That’s a good strategy. Blow the limit up to the next bracket if you miss a checkpoint.

     • Bill C. says

       January 12, 2022 at 2:14 pm

       Question regarding your spread sheet. How are you calculating the third tier test < amount to determine if you are forced to pay at the third tier level. The second level is also called the (Standard*1.4) amount and in my case the MFJ amount which is $228,000 in 2022. Looking back at previous years, the upper limit of the second tier appears to be about 1.25 times the test amount for the second tier. For some reason 2021 (1.26) but perhaps is the result of rounding. Would appreciate hearing how your spreadsheet handles this calculation.

     • Paul says

       January 12, 2022 at 2:52 pm

       Bill, while the premiums for each bracket appear to be some multiple of the base premium, the AGI thresholds are calculated by applying the CPI to to each AGI limit for tax year 2018, then rounded to the nearest $1,000.

       In 2018, the start of each brackets was:

       $0
       $85,000
       $107,000
       $135,000
       $160,000
       $500,000

       There’s an exception to the last one: it is not adjusted for CPI each year, until 2028.

       For married, double all but the last one: it’s $750,000.

       For married filing separately, it’s a different schedule, but I won’t belabor that.

       The relevant CFR is here: https://www.ssa.gov/OP_Home/cfr20/418/418-2115.htm

     • GeezerGeek says

       January 14, 2022 at 12:08 pm

       An additional factor that Paul mentioned in a different comment (183): the Net Investment Tax which can add an additional tax of 3.8% for investment income if a married couple filling jointly modified AGI exceeds $250,000. In the analysis I did above, the Net Investment Tax was not a factor because the Net Investment Tax threshold was higher than the second IRMMA threshold. However, since the Net Investment Tax is not indexed, the Net Investment Tax threshold will soon be below the second IRMMA threshold. So that is a factor you should consider in any intrusion over the IRMAA threshold, even if you are forced above the threshold. The Net Investment Tax is only applied to investment income so it may or may not be a big factor, depending on your income sources.

       Just to make things more confusing, the modified AGI used for the Net Investment Tax threshold isn’t the same as the modified AGI used for the IRMMA threshold. The following URL to the IRS site explains how the modified AGI used for the Net Investment Tax is calculated. https://www.irs.gov/newsroom/questions-and-answers-on-the-net-investment-income-tax

     • Bill C. says

       January 14, 2022 at 2:04 pm

       Paul, I can’t say thanks enough for your assistance in understanding the calculation of the IRMAA brackets. I do still have a question about how the higher income brackets are calculated. It seems to boil down to either using the base 2018 bracket amounts you noted for individual filers and inflating those amounts to the current year calculation, or.
       $0
       $85,000
       $107,000
       $135,000
       $160,000
       $500,000

       Reading paragraph (e)(1) of CFR “418..2115. What are the modified adjusted gross income ranges?” “In each year thereafter, CMS will set the modified adjusted gross income ranges by increasing the preceding year’s ranges by any percentage increase in the Consumer Price Index rounded to the nearest $1,000 and will publish the amounts for the following year in September of each year.” This seems to me to say, “start with the previous year’s published bracket, end of year values, and apply the CPI inflation for the new year.” I’m reading the guidance as applying to all the previous year’s bracket values except the $415,000, $500,000, and $750,000 values. In other words, no look back to 2018. I guess they believe any rounding gains or losses in the base year will average out in the long run.

       In either case, I take it that MFJ bracket amounts are always taken as double the appropriate “individual filer” amount. I note that MFJ amounts are always in even numbered thousands. So the process must be round the individual bracket amount first, then double.

       Thanks again, Bill C

     • Paul says

       January 14, 2022 at 5:17 pm

       Bill,

       As usual, federal regulations can be unclear or even contradictory. The CFR from Social Security is SUPPOSED to be derived from the US Code, but they obviously weren’t paying attention. It took me a while to find the US Code again, but it’s here:

       https://www.law.cornell.edu/uscode/text/42/1395r

       You’ll have to scroll down a bit, but it’s easier to search for “Inflation Adjustment”. This is what they actually follow (I’ve removed the paragraph labels, and combined it into one sentence):

       Subject to subparagraph (C), in the case of any calendar year beginning after 2007 (other than 2018 and 2019), each dollar amount in paragraph (2) or (3) shall be increased by an amount equal to such dollar amount, multiplied by the percentage (if any) by which the average of the Consumer Price Index for all urban consumers (United States city average) for the 12-month period ending with August of the preceding calendar year exceeds such average for the 12-month period ending with August 2006 (or, in the case of a calendar year beginning with 2020, August 2018). If any dollar amount after being increased under subparagraph (A) or (C) is not a multiple of $1,000, such dollar amount shall be rounded to the nearest multiple of $1,000.

       I once tried it the “other” way, increasing each year based on the annual CPI, using the previous year as the base. But, I found it didn’t match the actual brackets. The reason was: rounding. By rounding up or down to multiple of $1,000 each year, a value is either reduced or increased for that year. If you use that as a base for the next year, you are introducing an error into the calculation, either raising the bracket amount too high or too low. So, they start with a consistent base (average of September 2017 – August 2018) and use that each subsequent year, applying the CPI change since then.

       The Social Security COLA is calculated by comparing the current year to the previous year when a COLA became effective (note that might not be the previous year!). But, that’s a percentage that is applied to the wide range of benefit amounts. If there is any rounding, I think it’s to the nearest 10 cents. Perhaps whoever drafted the CFR didn’t realize the US Code was different.

     • Tom P says

       January 14, 2022 at 5:37 pm

       I agree with Bill C’s comments today. Reading the CFR each new year’s IRMAA ranges are just modified from the previous year’s ranges; you don’t have to go back to the so-called base year and modify those by the cumulative inflation adjustment factor. You can if you want… as you’ll get the same answers through at least 2022. However, at some point the rounding to the nearest thousand each year versus one time over several years may create a difference.

       And yes Bill, the MFJ ranges are just double the adjusted and rounded single ranges (except for the $750K top bracket).

     • Paul says

       January 14, 2022 at 5:52 pm

       Tom, I posted a comment to Bill, but I’m not sure it became public before you replied.

       The CFR is apparently wrong, and I didn’t notice until Bill pointed it out. I subsequently cited the US Code, which specifies the algorithm that I described. And as I noted, I originally tried to calculate the brackets from year to year as you advocate, and found I was getting slightly wrong answers for some brackets. When I found the US Code, I corrected my error and everything matched up.

     • Tom P says

       January 15, 2022 at 11:15 am

       Paul, I’ve made tables for both year-to-year and year-to-base year. I get the exact same ranges through 2022, but in 2023 I see a $1,000 difference in the 1st and 4th tiers (one higher, one lower). In my career as a Propulsion Engineer at Boeing we used the CFRs for all certification work, so my opinion would be that the CFR is the correct resource… but I’ll continue to track both methods. Also, the “code” you reference doesn’t say anything about adjusting the top brackets, but the CFR does. The published 2023 brackets should confirm which method is correct. FWIW, I’m using the ROUND function, not ROUNDUP or ROUNDDOWN to get the nearest $1,000. For example, =ROUND(*,-3).

     • Paul says

       January 15, 2022 at 2:18 pm

       Tom, the US Code section does include adjustment of the top brackets, now and beginning in 2028. Search for “Treatment of adjustments for certain higher income individuals”:

       (C) Treatment of adjustments for certain higher income individuals

       (i) Subparagraph (A) shall not apply with respect to each dollar amount in paragraph (3) of $500,000.

       (ii) Adjustment beginning 2028

       In the case of any calendar year beginning after 2027, each dollar amount in paragraph (3) of $500,000 shall be increased by an amount equal to—

       (I) such dollar amount, multiplied by

       (II) the percentage (if any) by which the average of the Consumer Price Index for all urban consumers (United States city average) for the 12-month period ending with August of the preceding calendar year exceeds such average for the 12-month period ending with August 2026.

       I’ve also repeated my calculations using the year-to-year methodology you advocate, and I cannot replicate your results — there are variances from the bracket thresholds actually published. So, we will just have to agree to disagree on that point.

       With regard to resolution of a conflict between a regulation (CFR) and statue (USC), that’s beyond the scope of this discussion. You can search for “Chevron deference” and find many articles about it, but if unless a statute is ambiguous, the statute supercedes any agency’s interpretation.

     • Bill C. says

       January 15, 2022 at 2:46 pm

       Paul, thanks yet again for posting the link to the Code. Even with your simplified expression of the two paragraphs which describe the process of for projecting future IRMAA bracket amounts, I still had to see it for myself and I read it the same way you do. Unfortunately clarity didn’t seem to be one of the goals. Had it been submitted in the technical writing class I took about 60 years ago it would have been returned with a big red X over it.
       Tom P please do continue to track both calculation methods, since that may be the only way to determine what is actually programed into the computer.

     • Tom P says

       January 15, 2022 at 4:15 pm

       Paul, here are the numbers I am using to calculate either year-to-base or year-to-year. You should be able to get the exact same results for the 2020 thru 2022 brackets using either method. Things start to deviate in 2023:
       2020 2021 2022 2023
       1.01900 1.03386 1.06485 1.11085 Year-to-Base
       1.01900 1.01458 1.02998 1.04319 Year-to-Year
       Year 2023 only includes the data we have through Dec 2021, so the average CPI-U for 2021-2022 is currently 276.913. I rounded the above numbers to 5 decimal places because the CPI-U data contains 6 digits.

       I agree the US Code (I pulled up another version at uscode.house.gov) specifies the year-to-base method (but curiously doesn’t say anything about adjusting the $750K bracket in 2028 whereas the CFR does), but the way the US Code may have been implemented by Social Security is the CFR year-to-year method. At this point either one seems close enough for planning purposes. Later this year we’ll know which method is actually implemented in computer code.

     • Paul says

       January 15, 2022 at 4:43 pm

       Tom, you have to look back further in the US Code I cited. It doesn’t directly specify the AGI thresholds for joint returns, but instead says this in clause (i)(3)(C)(ii):

       Joint returns — In the case of a joint return, clause (i) shall be applied by substituting dollar amounts which are twice the dollar amounts otherwise applicable under clause (i) for the calendar year except, with respect to the dollar amounts applied in the last row of the table under subclause (III) of such clause (and the second dollar amount specified in the second to last row of such table), clause (i) shall be applied by substituting dollar amounts which are 150 percent of such dollar amounts for the calendar year.

       For context, the inflation adjustment is described in paragraph (i)(5).

     • Paul says

       January 15, 2022 at 5:07 pm

       Bill, if you want to see some really convoluted language, try to follow the calculation of the “Monthly Adjustment Amount”, which is paragraph (i)(3) in 42 USC 1395r. It’s used to calculate the Part B premium for each tier.

       However, I’d recommend that you don’t, unless you want a headache. I have instead derived a set of multipliers applied to the “tier 0” Part B premium, but who knows if they will work next year.

214. Burt says

     December 10, 2021 at 10:04 pm

     Harry (& posters), this is super helpful!
     I’ve created my own spreadsheets for these and am now much more comfortable with what the bracket thresholds are likely to be in 2023.
     I am thinking about the chance for some who may be able to impact 2021 MAGI on 4/15/22 (IRA contributions) and wondering whether you’ll update the bracket projections when the March ’22 figures are released by BLS on 4/12/22. Or perhaps 3/10/22 when February figures come out as 4/12 is so closer to 4/15.

     Reply

215. Ann Myers says

     December 21, 2021 at 4:37 pm

     I have an aunt whose finances I manage. In 2019 she had a much larger than usual income due to the sale of her home. The IRMAA was deducted from her SS check each month in 2021. We have now received the determination letter for her 2022 SS amount and deductions. It is showing that she will be charged the IRMAA again this year and that it is based on the 2019 tax return. Why has this not been updated using her 2020 return? She does not come under any of the “Life-changing” events listed as basis for an appeal so what’s the best way to get this fixed?

     Reply

     • Tom P says

       December 22, 2021 at 11:43 am

       Ann, if your aunt’s 2020 tax return hasn’t been processed by the IRS yet that could explain why SS used her 2019 income. Although you can’t file an SSA-44 form you can file an online appeal, but I would just call your local SS office first and see if they can help…. which might resolve this faster.

216. RobI says

     December 21, 2021 at 4:44 pm

     I also had similar situation with incorrect use of 2019 return. I filed a case submitting my 2020 tax return using the link on the notice letter. Haven’t heard back yet but its only been few weeks.

     Kind of annoying they can’t get the latest tax return data from IRS automatically.

     Reply

     • Ann Myers says

       December 21, 2021 at 4:46 pm

       Did you use the appeal form SSA-44?

       Thanks for your prompt response. I will give it a try and hope we both have good outcomes!!

     • RobI says

       December 31, 2021 at 12:25 pm

       I used this link to file the appeal. Just got the adjustment letter after about 4 weeks

       https://secure.ssa.gov/iApplNMD/start

217. calwatch says

     December 21, 2021 at 11:46 pm

     It’s going to be interesting for a lot of people whose 2020 returns have not yet processed due to the ridiculous IRS backlog. I am not in an IRMAA situation, submitted my tax return prior to the end of my extension on October 15, and have not even received an acknowledgment from the IRS that it has begun processing, although the USPS shows delivery. Other people in the Bogleheads forum report the same thing. Does Medicare charge the IRMAA in arrears if the income is exceeded? What if they base it on 2019 income but 2020 income was actually less and put them in a different IRMAA bracket – do they get a refund?

     Reply

     • Harry Sit says

       December 22, 2021 at 8:42 am

       It’ll be adjusted automatically when Social Security eventually gets your tax return information from the IRS. If you don’t want to wait, send them your tax return now.

218. Jim M says

     December 22, 2021 at 9:45 am

     It can take several years for Social Security to make such adjustments. My wife and I efile our joint tax return which means we have the same Modified Adjusted Gross Income. For the past 2 years my wife has been charged the correct IRMAA and I have not been charged any IRMAA at all. Go figure. This same thing happened 4 or 5 years ago. Eventually Social Security caught up and deducted the unpaid IRMMA that I owed in a lump sum from my social security check. I now keep a spreadsheet to track of my social security receipts, paid Medicare premiums and the unpaid IRMAA that I know I owe. If I were being overcharged IRMAA I would call Social Security and request a correction to the amount of IRMMA being charged. As I recall, the last time I looked at my social security awards letter, there was a time limit to appeal the amounts being charged. My wife and I receive our awards letters with different formats at different times, which may explain why the IRRMA calculations are not the same. She has received her SS awards letter for 2022 and I have not.

     Reply

     • Tom P says

       December 22, 2021 at 11:33 am

       Jim M, if you don’t already have an online login to your SS account I highly recommend you get one, and then set your notification preferences as you wish. I have mine set so SS does NOT send a paper copy and I get notified of a new SS message via email and text. My 2022 SS benefit letter was posted on 11/20/2021.

219. Randy says

     December 23, 2021 at 8:57 am

     Testing my understanding of the IRMAA rules. Assume the following:
     Older spouse turns 65 in July 2023, and the younger spouse turns 65 in October 2023.
     2021 MAGI (married filing jointly) is in the first surcharge tier (approx. $190K – $238K)

     The above assumptions will result in:
     Older spouse pays the Tier1 surcharge for 6 months in 2023.
     Younger spouse pays the Tier1 surcharge for 3 months in 2023.

     Reply

     • Tom P says

       December 23, 2021 at 10:44 am

       Randy, you might want to download the Medicare and You 2022 handbook as it has valuable information on signing up, etc. Of course, things could change by 2023, but probably not the signup info and when Parts A, B and D are effective.

       Both spouses could potentially save 3 months of IRMAA by delaying signing up for Part B. You can sign up 3 months before you turn 65, the month you turn 65 or anytime 3 months after you turn 65. However, unless you have other coverage such as COBRA or private insurance you may be without medical insurance for up to 3 months if you delay.

       For Part D (assuming you choose traditional Medicare), you need to signup within 63 days after your initial enrollment period is over. When I retired (well past age 65) we had company paid COBRA coverage for 3 months, which ended the end of October 2020. Since we were on 90 day prescriptions we had enough to extend past the end of the year so we did not sign up for Part D to be effective until January 1, 2021, and this saved both of us 2 months of Part D IRMAA, for a total of $280. Bottom line: if you can play the system to your advantage… do it 🙂

220. Jim M says

     December 23, 2021 at 9:02 am

     That sounds right, assuming you sign up for Medicare at age 65.

     Reply

221. Jim M says

     December 23, 2021 at 12:22 pm

     The last time I checked, having Cobra doesn’t extend the initial Medicare sign up window. Permanent premium surcharges may apply if Medicare sign up is delayed. Guaranteed coverage in a Medicare supplement plan is not assured when the initial signup window is missed. Be sure to check the rules.

     Reply

222. Robert Hoffman says

     December 31, 2021 at 10:44 am

     I haven’t been able to get a response from the feds, which is frustrating, but I thought you should know that the 2022 IRMAA is based on 2019 income, not 2020 income. At least that’s what my statement said. So both my 2022 IRMAA and my 2021 IRMAA were based on my 2019 income. I’m not complaining, because my 2020 income is higher than my 2019 income, but Medicare needs to be honest with the American public and explain why this is the case and how it affects IRMAA going forward. For example, will the 2023 IRMAA be based on 2020 income (3 year gap going forward forever) or will the 2023 IRMAA be based on 2021 income and income for 2020 will basically be “skipped.”

     Reply

223. Ken says

     December 31, 2021 at 11:44 am

     Robert, My new IRMAA statement for 2022 used our 2020 income, but I e-filed our 2020 taxes before the April deadline in 2021. I am guessing you may have filed with an extension, and that they will fix yours once the 2020 tax return works it way thru and they figure out they have newer info and that your bill will be bigger. If you filed on time, that is a bigger issue.

     Reply

     • Robert Hoffman says

       December 31, 2021 at 4:06 pm

       Filed on time. It’s inexcusable that we are kept in the dark regarding what they are doing.

224. Rob I says

     December 31, 2021 at 12:15 pm

     I filed for an adjustment on the Medicare web site right after receiving the notice letter sending them a copy of my 2020 tax return which was lower than 2019. It took about 4 weeks to get my lower IRMAA corrected. I had paid one month of medicare premiums at the higher rate but expect the amount due will be adjusted in the Jan billing cycle.

     Reply

225. Jim M says

     December 31, 2021 at 1:40 pm

     Robert,
     Your Social Security Awards you is simply informing you of the tax year they actually used to calculate your Medicare premiums for 2022. However, that doesn’t meant that the amount due won’t eventually change. Social Security has a process to periodically check for the latest tax returns and use them to charge the correct Medicare premiums due. In my experience, it can take them several years for them to make the corrections, but they eventually get to it.
     If you file your tax return for 2021 on time, chances are it will be used for calculating your 2023 Medicare premiums. However, there is no guarantee of that. My wife and I file a Joint Tax return. For the past 2 years and for 2022 she is being charged the correct IRMAA amount while I am charged none. Who knows why that might be. But I expect Social Security eventually the correct IRMAA amount I owe and deduct it from a future Social Security Deposit. That how they corrected the same issue when it happened 4 or 5 years ago.

     Reply

226. The Wizard says

     December 31, 2021 at 3:40 pm

     I file my IRS tax return in February most years lately.
     Some folks do an extension and don’t file till October.
     Those late filing folks are going to be more likely to have issues with their IRMAA numbers not being correct…

     Reply

227. Paul says

     January 12, 2022 at 9:09 am

     FYI to all: The new CPI-U for December 2021 was just published by the BLS: 278.802. That is an annualized inflation rate of 7.04% for the past 12 months.

     With no inflation through August, 2022, the second IRMAA bracket (single) will be $95,000. With a remaining average inflation rate less than 2.8% until then, the second IRMAA will still be $95,000.

     With a remaining average inflation rate in the range between 2.8% and 6.8%, the second IRMAA bracket will be $96,000. At 6.9%, it will increase to $97,000. I didn’t calculate it with higher average inflation rates.

     Double all these amounts for the married IRMAA brackets. One important caution: the inflation thresholds will be DIFFERENT for the higher IRMAA brackets, due to how the brackets are calculated.

     Reply

     • Paul says

       January 12, 2022 at 9:23 am

       I forgot to add: these IRMAA brackets will be for 2023, based on AGI from tax year 2021.

     • GeezerGeek says

       January 12, 2022 at 9:29 am

       Paul,

       I got the same results in my spreadsheet. You do math just like me so we must have had the same math teacher… Mr. Hershel Hipps, right? 🙂

       Actually, it was largely from your earlier post (164) that I learned how to calculate the brackets so it is not too surprising that our calculations are identical.

       Thanks!

     • Paul says

       January 12, 2022 at 9:32 am

       Geezer,

       I didn’t “invent” it. I dug up the actual US code that specifies how to do it. I wish I had saved the URL.

     • Bev Lolr says

       January 15, 2022 at 2:14 pm

       Paul ~ Can you calculate what the third tier bracket might be for 2023IRMAA with AGI from 2021 by chance?

     • Paul says

       January 15, 2022 at 2:31 pm

       Bev, I can only try to predict it at this point.

       Presuming that you mean the tier that currently starts at $114,000 for single taxpayers, I get the following Modified AGI thresholds with these average inflation rates through August, 2021:

       0% – $119,000

       1% – $120,000

       4% – $121,000

       7% – $122,000

       I hope that 7% is the upper limit!

228. Tom P says

     January 16, 2022 at 1:49 pm

     Paul, Bill, or anyone else. If you’d like a copy of the Excel Spreadsheet I use to calculate and predict IRMAA adjustment brackets, including the Part D adjustment, you can download from this MS OneDrive link (please let me know if you find any errors):
     https://1drv.ms/x/s!AtHS0jWEezJSyB1kfmMGZzzUtuSN?e=H5UQfW

     Reply

     • AnnaC says

       April 9, 2022 at 5:24 pm

       Wow Tom: thanks for sharing! Now to get down & dirty & nerdy…..so much better than reinventing the wheel.
       Thanks again for generously sharing! Cheers, AnnaC

     • Ian M says

       June 12, 2023 at 7:47 am

       Hi Tom,
       I have only just come across this file in your OneDrive, this is really cool. Thanks for sharing. Can I ask if you are keeping the data current, as when I open the file, the last CPI-U data is 297.711 for November 2022? Is that correct and what you expect us to see? If not, is there some setting you could change which would allow us to always view the latest updated version?
       Thanks again, Ian

     • Tom P says

       June 12, 2023 at 11:17 am

       Hi Ian. I haven’t been keeping the spreadsheet up to date since there haven’t been any comments that anyone was using it 🙂 However, I just now updated to the latest info through April. Tomorrow I’ll update again when the May data is published.

       The intent was for users to download this file (click File, Save As and Download a Copy to save to your computer). Then you can use the links to update with the latest information when it’s published.

       You can use this file to make “what if” calculations. For instance, for the 2023–2024-year column, I pasted in calculations for a 2% year over year inflation for each month to try and gauge how low the IRMAA brackets might be for 2025.

       Enjoy.

229. Bill C says

     January 18, 2022 at 10:11 am

     I just did a calculation of how the first three IRMAA bracket tiers are effected by CPI inflation rates for the remainder of the SS year (Jan to Aug 2022) with the following results for single income filers. The “from” amounts assume 0% inflation for the January to August period. Outside of monthly deflation, these amounts are “in the bag”, These are the inflation rates that will cause a round up the the next higher amount in the bracket. This is a snapshot made in mid January, future monthly actual CPI data will modify the amounts.

     Tier 1 will increase from $95,000 to $96,000 with a CPI increase 2.76 % annualized (.23%) per mo.
     Tier 1 will increase from $95,000 to $97,000 with a CPI increase 6.84 % annualized (.57%) per mo.
     Tier 2 will increase from $119,000 to $120,000 with a CPI increase 0.34 % annualized (0.028%) per mo. This increase will happen with the Feb data.
     Tier 2 will increase from $119,000 to $121,000 with a CPI increase 3.66 % annualized (.305%) per mo.
     Tier 3 will increase from $149,000 to $150,000 with a CPI increase 1.42 % annualized (0.118%) per mo.
     Tier 3 will increase from $149,000 to $151,000 with a CPI increase 4.08 % annualized (.34%) per mo.
     Perhaps I should have determined the inflation rate for the next higher increase for each bracket but thought I would wait to see how rates respond to the first FED interest rate move.
     Bill C

     Reply

     • Vince says

       January 18, 2022 at 10:34 am

       Thank you for the very detailed work. What is scary for me is that if you unfortunately lose
       a spouse you are really penalized for having the same investment income. You can go up multiple tiers quickly. You lose some social security but the RMD remain the same as do your dividends.

230. Doug Miller says

     January 18, 2022 at 11:22 am

     Vince, that is absolutely true. If there are any substantial IRA savings at all, after one spouse dies not only will the survivor jump at least 1 tier (but probably more), but federal income taxes will also sky rocket. I witnessed that happen in my mom’s life and now see it coming in my own. I am planning to separate my IRA accounts out leaving some to pass directly to our kids, while making sure my wife has plenty to live the lifestyle she is accustomed to. The Roths will, of course, stay with my wife before eventually passing to the kids. The message to younger people saving for retirement: focus on funding Roths. The Roth 401Ks are a wonderful thing that weren’t available to me through most of my earning years. I fully funded Roths for my wife and I for most of the 17 years they were available to me, and am glad I did. But the funding limits were pretty small. In any event: Roths are the best thing going for now!

     Reply

     • Vince says

       January 18, 2022 at 5:42 pm

       Doug,
       Yes Roths are great but I was never eligible to fund one while working. Between the time I retired and until I start taking social security I’ve been doing Roth conversions but not enough to make a big difference. Working hard and saving instead of goofing off and spending will make Uncle Sam happy.

231. Russ S says

     February 18, 2022 at 3:02 pm

     Hello,
     Have a question about the Tax Year to use on an IRMAA appeal SSA-44 form in Step-2. For premium year 2022, I received my initial determination stating my IRMAA amounts based on my 2020 income. I retired in mid-2020 and my income has since been reduced below the threshold amounts for any IRMAA for 2021 income and will continue to be lower in 2022. I submitted the SSA-44 form asking them to use 2021 MAGI instead. It’s been over 3 months with no change. I filed the form also last year for 2021 premium year which was based on 2019 income but used 2021 estimated income in Step 2 and they eliminated the IRMAA with no issue. Should I be using 2022 estimated income for the appeal again this year rather than actual 2021 income? I wondering perhaps if this is why they won’t seem to process the SSA-44 for this premium year (2022).
     Any insight is appreciated.

     Reply

232. Tom P says

     February 18, 2022 at 3:49 pm

     Hi Russ,
     Your situation mirrors mine exactly. I retired mid-2020, but my income didn’t actually go down until 2021 since I got severance and layoff benefits. Thus, my 2021 IRMAA was initially based on 2019 income and I didn’t find out about the SSA-44 until October 2021, at which time I filed the forms with my local office using projected 2021 income. It only took 2 weeks and we received a major adjustment refund for IRMAA paid to date in 2021.

     However, like you, when SSA informed me of my 2022 benefit they again included IRMAA based on 2020 income, even though I had indicated on the SSA-44 that my 2022 income would be less than 2021. I called my local office, but had to leave a message. I followed up with a letter outlining all this and faxed it to my local office. A few days later I got a call and the SSA person told me they would eliminate my 2022 IRMAA. For us it was too late to change the IRMAA for January 2022 but we quickly received a credit refund for that month and IRMAA moving forward was eliminated.

     You don’t need to refile SSA-44 as I think that may just cause confusion. Just call your local office and see if can speak to the “IRMAA person” to clarify your situation. Good luck.

     Reply

     • Russ S says

       February 18, 2022 at 4:14 pm

       Thank you Tom, really appreciate the insight. I will try and call them yet again. I get the run around every time I speak with them. 🙁

     • Tom P says

       February 18, 2022 at 4:48 pm

       I actually didn’t know if SSA would adjust my 2021 IRMAA based on projected 2021 income (which, BTW was $494 below the 2022 threshold… so I was cuttin’ it close), I thought they might just adjust 2022 moving forward. Getting a hefty 2021 refund was a nice surprise.

233. Stephen Sammarco says

     March 8, 2022 at 9:17 am

     QUESTION Why is my medicare part premiums $3,920.40 and my wife’s deduction is $1,782.00 on the 2021 1099-SSA? Should both deductions be equal?

     Reply

     • GeezerGeek says

       March 8, 2022 at 9:55 am

       Hi Stephen, From your description, I’m not sure what numbers on the 1099-SSA you are referring to. $1,782.00 would have been the amount Medicare Part B premiums deducted from your benefits for 2021. In addition to the Part B premiums, there may be other deductions from SS including cost of a Medicare supplemental plan (Part D or any other supplemental plan) and Federal income tax withholding. The deductions are different on my wife’s 1099-SSA than mine because she has a Part D deduction and has less Federal income tax withheld than I do.

     • Keith says

       March 8, 2022 at 10:05 am

       I dont know much about this stuff, but the ratio of those two deductions is 220%.
       So as a guess off the top of my head, I’d guess you and your wife file separately and you are paying IRMAA and she isnt.

       Just a WILD guess.

     • GeezerGeek says

       March 8, 2022 at 10:35 am

       It could be that Stephen is paying for IRMAA and his wife isn’t but that doesn’t completely account for the number he quoted, $3,920.40. If he was paying the Part B penalty in an IRMAA bracket, his cost would have been $2,494.80 in the first bracket, $3,564.00 in the second bracket, and $4,633.20 in the third bracket. Since none of those numbers exactly match the number he quoted, there must some other factor that is at least causing part of the difference other than the IRMAA penalty.

234. Jim M says

     March 8, 2022 at 10:51 am

     $1782 is the basic Medicare premium for 2021 ($184.50 X 12 months) without any surcharge. So that appears to be what your wife was charged.

     I would call Social Security to obtain an explanation for the amounts you were charged.
     $3,920.40 does match the Medicare premium surcharge of $326.70 per month. ($326.70 x 12 = $3,920.40). However, that surcharge does not include the $1782 basic Medicare premium amount. It seems old that you would be charged a surcharge without the base amount.

     For the past few years my wife an I have not been charged the same Medicare surcharge amount even though we file a joint tax return. She is charged the correct premium surcharge while I am not. I expect Social Security will eventually come along and deduct the correct surcharge amount that I owe. They did that a few years ago.

     Reply

     • DrewMcG says

       March 16, 2022 at 12:22 pm

       “$1782 is the basic Medicare premium for 2021 ($184.50 X 12 months) without any surcharge.”
       — your annual amount is correct, but you transposed two digits in the monthly amount. It was $148.50/mo. (not $184.50)).

     • Jim M says

       March 16, 2022 at 8:28 pm

       DrewMcG
       Thanks for catching my error.

235. Jim M says

     March 8, 2022 at 12:49 pm

     One more thing. Check your Social Security benefits letter. Medicare deductions are detailed there.

     Reply

236. Harry Sit says

     March 10, 2022 at 8:07 am

     Updated the two tables after the February CPI release. Most brackets for 2023 based on 2021 income increased by $1,000 (single) or $2,000 (married filing jointly).

     Reply

237. Scott says

     March 23, 2022 at 4:38 pm

     If you can Roth convert incrementally from a regular IRA within an IRMAA bracket, you can later use this Roth money to keep yourself below future bracket thresholds. You could save substantially penalties. You will pay the IRA taxes anyway when you withdraw, so this method won’t hurt much.

     Reply

     • GeezerGeek says

       March 23, 2022 at 5:22 pm

       My problem is that my traditional IRAs are growing at a faster rate than I can incrementally convert them. I’ve been doing conversions every year since 2011. Normally, I had been doing my conversions at the end of the year, when I had a good idea of how large of a conversion that I could do and remain under the IRMAA limits or next tax bracket, but during the COVID sell-off around March 2020, I did a conversion at that time because the lower value of the portfolio allowed me to convert a large percentage of my holdings. Most investors dread market downturns but I’ve been hoping for one for many years just so I could convert a larger percentage of my traditional IRAs to Roths and still stay under the IRMAA limits.

238. Joe W says

     March 27, 2022 at 1:21 pm

     Even if you support a higher premium for Medicare based on your income, the IRMAA adjustment is poorly structured. Having a premium increase of thousands of dollars per year kick in when you jump brackets by $1 is a crime. Although this is labelled as a premium increase, it is effectively a huge marginal income tax rate increase.
     For a married-filing-jointly couple both on Medicare, it creates sub-brackets within the income tax brackets that range from 4%+ (if your income approaches the full IRMAA bracket) up to 2,900% (for a $2,900+ premium increase on $1 of additional income). If you’re income is in the 3rd or 4th IRMAA tier, instead of having income tax brackets of 22% and 24%, you pay 28% and 30%.
     A graduated premium based on a percentage of income would be more logical. But even this is questionable considering that higher income people already paid more than their fair share in Medicare payroll taxes (with no cap on the income base) while working.

     Reply

     • Songbill says

       March 27, 2022 at 1:52 pm

       Well said. Couldn’t agree more. Unfortunately, nobody cares about the unfairness and craziness of the structure….. not Congress nor the public at large. Vast majority of people in Congress are not on Medicare. Most taxpayers are not on Medicare and even if they are they’d consider IRMAA brackets being “very rich” or “wealthy” retirees to whom they can’t relate. The IRMAA rules are irrelevant to them. Bottom line: It is highly unlikely Congress will modify the rules to be more fair and sensical. As the years go by though, more and more retirees will be snared by IRMAA. So there is room for hope that eventually the rules will be modified.

     • Ed Fogle says

       March 28, 2022 at 9:28 am

       Well said. Especially the point that people subject to IRMAA probably were high income earners while working and paid far more than average in Medicare payroll tax. It’s a double whammy.

       And the $1 cliff is ridiculous. Only a stinking bureaucrat could have come up with something like that. Bureaucrats don’t think like normal people.

       Like your said “a crime”.

     • Paul says

       March 28, 2022 at 9:39 am

       Ed, you can’t blame bureaucrats for this one. It’s in the US Code, as enacted by Congress:

       https://www.law.cornell.edu/uscode/text/42/1395r

       There’s a roundabout path into a regulation, but it originates in the US Code.

     • Ed Fogle says

       March 29, 2022 at 8:21 am

       Paul, I’s sure bureaucrats came up with the stupid $1 cliff concept and write the bill. I doubt seriously the representatives and senators who sponsored it wrote the bill. Heck, I fought they even read it.

     • Ed Fogle says

       March 29, 2022 at 8:26 am

       Let me try this again:
       Paul, I’m sure bureaucrats came up with the stupid $1 cliff concept and wrote the bill. I doubt seriously the representatives and senators who sponsored it wrote the bill. Heck, I doubt they even read it.
       (I do my best proofreading after I hit send.)

     • Paul says

       March 29, 2022 at 8:58 am

       Ed, Congressional bills are usually written by staff that work either for individual congressmen or committees.

       Whether they are considered bureaucrats will depend on your view. However, unlike most government employees, they answer directly to the congressmen they work for, or the head of the committee. They also don’t have the typical civil service protections, as they can be (and have been) easily fired for personal misconduct.

       In this case, IRMAA was enacted by the Medicare Modernization Act in 2003, effective 2006.

     • Ed Fogle says

       March 29, 2022 at 9:59 am

       Paul,
       I knew that.

239. Brandon says

     March 27, 2022 at 2:33 pm

     If you find a solution there will be a lot of happy people. It works the same for those who missed out the COVID checks, food stamps, unemployment, tuition help, medical insurance subsidies, rent subsidies, child care help etc. At least your problem is not something that will cost you to lose your home and job because you can’t pay the $15,000 for childcare and transportation to get to your job. Please post with your solution.

     Reply

     • powderriver says

       March 27, 2022 at 4:57 pm

       I’m curious. Just how does one “miss out” on covid checks, food stamps, unemployment, etc.?? Did you qualify, but didn’t apply? These are the very things that help people not to lose their homes, and to transition to new jobs.

     • drew says

       March 28, 2022 at 2:21 pm

       Powerdriver: If you convert too many 401K funds to Roth in order to avoid future IRMAA penalties, your AGI could exceed the threshold for the 2021 $1,400 Covid tax credit, even though you actually earn less than, e.g., the $75K threshold for single filers. Hope this answers your question.

     • powderriver says

       March 28, 2022 at 2:47 pm

       Drew — Yes, that attempted to address one special case. The person who is converting a 401k to a Roth had to make a CHOICE in 2021: did they want to do a Roth conversion, or did they want the 2021 covid check, or could they do a smaller conversion and still get the covid check? Choices.

       It seems to me that those people in a position to be wary of future IRMAA charges (because they have so much excess in their IRAs/401Ks) are pretty well-to-do….if not now, then certainly when they will be retired. Is not qualifying for a covid check all that much of a misfortune for these people?

       Should there have been no means testing for the covid tax credit? I’m sure Bill Gates could have used the extra $1400.

     • Ed Fogle says

       March 29, 2022 at 9:03 am

       Paul,
       Jew all that.
       Ed

     • Brandon says

       March 29, 2022 at 9:48 am

       powderriver

       None of it affected me. But I have neighbors that were affected. I am a widow, retired, planned and lucky not to have to needed any benefits.

240. The Wizard says

     March 27, 2022 at 3:25 pm

     I don’t see “more and more” retirees being snared by IRMAA in coming years. The IRMAA tiers are adjusted for inflation now, you see…

     Reply

     • Marty Yeager says

       March 29, 2022 at 12:06 pm

       Well, unfortunately most elderly become a widow or widower, and RMDs are taxed under the single rate, and the single IRMAA category applies. A double whammy of taxation just at the age when caregiving needs accelerate and there is no longer a spouse to help out.

241. CapeRetiree says

     March 27, 2022 at 9:44 pm

     Powderriver,
     The Covid stimulus checks were income related. Many of us that worry about IRMAA issues had income that was in a phase out region, or simply exceeded the limits, so they got a partial check amount, or no check, respectively. There were not something we forgot to apply for. This article explained the Spring 2021 payment rules. https://www.cnbc.com/2021/03/12/1400-stimulus-checks-are-on-the-way-heres-who-qualifies.html

     Reply

     • powderriver says

       March 28, 2022 at 12:53 pm

       Ok then. People didn’t really “miss out”, they just didn’t QUIALIFY for the benefit, by the RULES established by our representative gov’t. I wonder if the “miss out” mischaracterization was motivated by: (1) a belief that the well-to-do should have also gotten covid checks, food stamps, etc.; or (2) a belief that the not-so-well-to-do should not have gotten any covid checks, or any food stamps, and that those whose jobs went away should not have gotten any unemployment?

       If its (1), is there a rational explanation why the already well-to-do need extra support to help pay for the basics of life? If its (2), as an example, check out the history (financial and otherwise) of the 1846-47 Irish potato famine, and specifically what gov’t support meant for the lives of the poor, VERSUS what it meant for the deaths of the poor before it was established and then after it was cruelly taken away.

       Either way, for people to to label a mere cumbersome, inefficient bureaucratic rule (like the IRMAA limits) as a “crime”, I guess goes with the times, where the drama of being recognized as a victim outweighs any attempt to argue rationally for a fix to the problem.

     • Drew says

       March 28, 2022 at 5:48 pm

       My ancestors immigrated from Ireland 9 years before the potato famine, but I take your point. Federal tax policy for many years has encouraged employees, employers, and the self-employed to save money for retirement by delaying taxes on IRA and 401K contributions. Good policy. But I doubt very many appreciate before they reach near-retirement (or after) the complex impacts of those choices on their retirement planning. I have no issue with a progressive tax structure, and favor it generally speaking. From each according to his/her ability. But in the case of Medicare premiums, there’s a sense among many that its been paid for through employment taxes over the years. Accordingly, when you’re asked to pay significantly more for the same coverage it provides because you withdraw (too much) money that the government encouraged you to save (and that you’re paying the taxes on separately upon withdrawal), I can see how people think its unfair even if its not a crime (I think he really meant “silly” or “stupid”).

       I also think its natural for near-retirees and retirees to be nervous about their retirement funds, and want to preserve them, and to reduce expenses: no employment income, rising inflation, inadequate social security payment, rising Medicare deductibles and Part B premiums, rising Rx costs, rising real estate taxes if the own a home, rising rents if they don’t, etc., etc. For this reason, I’d prefer to raise or eliminate the cap on income that is taxed for Medicare, instead of this IRMAA nonsense. More progressive and less anxiety-provoking.

       I don’t think someone in their mid 60’s with $70K income and couple of hundred thousand in a 401K or IRA is necessarily “rich”, except of course vis-a-vis those starving and unsheltered due to famine, etc. But you’re right: they could forgo the Roth conversion in 2021, take the $1,400 Covid relief, and pay the penalty down the line in potential IRMAA surcharges depending on their situation.

     • powderriver says

       March 29, 2022 at 6:33 am

       Drew — I am also in the group of people described in your 2nd paragraph. The concerns you note there are natural for this group of people. And I agree with just about everything you said throughout your comment.

       Your comment on the medicare payroll taxes was already corrected by someone else.

       Like you, I also “don’t think someone in their mid 60’s with $70K income and couple of hundred thousand in a 401K or IRA is necessarily ‘rich'”; but let’s face it, people in that financial condition will also not likely have to deal with high IRMAA costs because of large RMDs from their retirement accounts.

       But my overall point is that there is a difference between being diligent about retirement issues and recognizing bureaucratic imperfections VERSUS claiming to be a victim of government.

     • The Wizard says

       March 29, 2022 at 1:26 pm

       Folks are making way too much of IRMAA. We higher income retirees paying IRMAA can easily afford it.
       I’m single and have paid extra since starting Medicare seven years ago and not in the first IRMAA tier either.

       I expect to be paying IRMAA forever under current law and still have thousands of excess retirement income leftover that goes into my taxable account most months…

242. Paul says

     March 28, 2022 at 6:05 pm

     Drew, there is no cap on earned income subject to the Medicare tax. That cap was removed in 1994.

     Additionally, if your earned income exceeds $200K (single) or $250K (joint), an additional 0.9% Medicare tax is imposed on earned income above those thresholds.

     Finally, if your AGI exceeds the above thresholds, a THIRD tax of 3.8% is imposed on net investment income above the thresholds. This tax is known as the “Unearned Income Medicare Contribution”, but the revenue goes into the general fund, instead of directly to Medicare.

     The last two taxes were enacted by the Health Care and Education Reconciliation Act of 2010, and took effect in 2013.

     Reply

     • Vince says

       March 28, 2022 at 6:22 pm

       Paul,
       You are correct! The IRMAA surcharges are additional penalties on hard working Americans. Of course many people are always in favor of taxing the same successful individuals.

     • Drew says

       March 29, 2022 at 4:48 am

       Paul, thanks for the correction–my bad. (I was thinking about the social security tax.) The 1994 change makes IRMAA even less sensible! Also, I should not have suggested that this change would make the Medicare tax progressive. It doesn’t; it just removes it’s previous regressive nature.

     • powderriver says

       March 29, 2022 at 6:40 am

       Vince — Perhaps you could explain for us how a tax system would work if it didn’t tax “successful individuals”.

     • Ed Fogle says

       March 29, 2022 at 8:51 am

       Vince, “tax successful individuals”? Perhaps you should say tax or overtax. Influenced by your point of view, mainly perceived victimhood status.

243. Vince says

     March 29, 2022 at 7:06 am

     In 1945 they used to tax any income above $200,000 at 94%. In Illinois we have a flat tax of 5% for everyone.
     Personally I think a flat tax is more fair but when 61% paid no federal income taxes in 2020 you have to soak the middle class and higher.
     There are help wanted signs all over the place because people are being supported by the government and don’t have to work. I think every able bodied man should work and pay some taxes to society but many disagree with me.

     Reply

     • powderriver says

       March 29, 2022 at 8:19 am

       Overall, that is quite a different tune than the complaint that “successful individuals” are taxed.

       But I agree: “I think every able bodied man should work and pay some taxes to society” — in a perfect world. However, in general, the world is not perfect: most of the time there are not enough jobs for everyone; there are even fewer jobs that pay a living wage; who is to judge what ‘able bodied’ is; how to judge ‘able minded’; there is a cost to properly oversee that the rules are followed; how to balance the needs of those who are properly on gov’t assistance with the need to incentivize work, etc. etc. Platitudes are fine, but the devil is always in the details.

       I wonder what you would find worse: the poor paying no taxes, or the rich paying no taxes? Because there a quite a few of both who don’t.

       A flat tax is no more perfect than the tax system/rules we have now. A flat tax of say 10% is much more burdensome to the family finances of the working poor than for the rich. And besides, if your claim is correct that the poor are not working because of gov’t handouts, then a flat tax would get no revenue from them anyway.

     • Brandon says

       March 29, 2022 at 10:13 am

       Vince,
       The highest rate of federal income tax was 91% and it was also 91% in 1945 during the war.
       Actually what ever benefit is paid out there is always a cut off and 1¢ over it can affect the benefit payout. It isn’t just IRMAA.
       But with IRMAA, people are usually in a position to manipulate their income to stay out of a higher bracket. Just like with income tax. Just add up your income regularly whether working or retired and manage RMD’s, Roths, and Roth conversions, interest, cashing in stocks or bonds etc. Read the laws and rules. When it was legal we managed our house payments and paid a year in advance at a savings and loan being able to deduct 2 years of interest, paid our high winter tax in Jan and Dec in one year in the same year, bought our car tags early in Dec so we could deduct 2 years etc. and took the automatic deduction the following year. When you could change the names on inherited savings bonds we did that and our oldest child did not owe taxes but it paid for his first year of college.

244. Vince says

     March 29, 2022 at 10:07 am

     Ed,
     I don’t consider myself a victim because I worked hard.

     Reply

     • Ed Fogle says

       March 29, 2022 at 5:43 pm

       A victim of a confiscatory government, perhaps?

     • powderriver says

       March 30, 2022 at 8:10 am

       But as you see, Ed does feel like a victim.

       One wonders just what it would take for Ed to feel that the gov’t was not “confiscatory”. One is left to merely wonder, because the communication is centered on being recognized as a victim VERSUS exploring workable, constructive ideas/opinions/alternatives.

       Perhaps the gov’t should not tax Ed at all, and then he could just continue to magically benefit from the economic infrastructure in this country that exists, in part, due to those taxes.

     • Ed Fogle says

       March 30, 2022 at 1:47 pm

       Rationality. That’s all.

245. Steve says

     March 29, 2022 at 1:43 pm

     Thanks Wizard, that’s a refreshing view. I too have been fortunate enough to have to contend with IRMAA. I worked hard, but I was also lucky to have a long well paying career, medical insurance, a pension and a 401K. I do what I can to minimize taxes, but try not to complain because I have to pay more than others or don’t receive the assistance that others get.

     Reply

     • Braden says

       March 29, 2022 at 3:41 pm

       Another solution is to disclaim IRA’s and 401K’s as I did when my partner passed. The kids are going to get it anyway. You can only eat so much and you only need one house. I was lucky enough to do it when they could spread it out throughout their lifetime. Already it has been 10 years and they have more in the account now than they did when I disclaimed it. Since then I convert to a Roth so they can take the RMD’s tax free as they are near retirement also. I am helping to preplan my children’s retirements.

246. Bob D says

     April 9, 2022 at 8:59 am

     Can you publish your estimate of what the MAGI brackets for tax year 2022? For planning income in 2022.

     Thanks

     Reply

     • Harry Sit says

       April 9, 2022 at 9:40 am

       I added two new tables for 2024 (using 2022 income), one with 0% inflation and another with 5% inflation.

247. AnnaC says

     April 9, 2022 at 2:46 pm

     Harry: thanks for the update. Where can I find the table for 2024 you reference with 0% & 5% inflation….is there a post # to easily locate it? Anna

     Reply

248. AnnaC says

     April 9, 2022 at 2:48 pm

     shoot, sorry Harry….I just scrolled to the very top & see your contents: thxxxxx! Anna

     Reply

249. Terry says

     April 12, 2022 at 5:58 pm

     This is super helpful information. Could you explain why that 2023 standard premium based on 2021 income would be the same no matter whether inflation is at 0% or 7% from April 2022 through August 2022. This seems counter intuitive. Thanks.

     Reply

     • Tom P says

       April 12, 2022 at 7:52 pm

       It’s not exactly the same as the 3rd and 4th tiers are $1,000 higher for the 7% table. My numbers agree with Harry’s for 0% inflation through August, but I have not calculated for 7%. Remember, the brackets are rounded to the nearest $1000 so if they are on the lower edge for 0% it could take a hefty increase from now through August to boost them more than $1000.

     • Harry Sit says

       April 13, 2022 at 5:58 am

       The brackets are calculated off of a 12-number average. It’s not based on what the August number will be over the August number a year ago.

       A 7% annual inflation means about 0.6% increase in each of the remaining five months. This will add about 1.8% to the 5-number average. When you spread it out to 12 numbers, the 12-number average goes up by less than 1%. Then rounding kicks in.

250. Terry says

     April 13, 2022 at 6:56 am

     Wouldn’t a 0.6% increase in each of the remaining five months add 3.0% to the five number average?

     Reply

     • Harry Sit says

       April 13, 2022 at 7:19 am

       No. You can try it yourself. Add up 100.6, 101.2, … Divide by 5 and see what you get.

251. JeffdelRey says

     April 21, 2022 at 2:16 pm

     I was introduced to IRMAA the hard way: while executing my Roth conversion plan to save on future taxes, I kept a close eye on my current tax bracket and was ignorant to IRMAA tiers. Imagine my surprise when I found myself and my wife in the 2.4 tier and paying thousands per year more to Medicare. I re- ran my projections and found my Roth conversions (a government plan) will save me over $500k (if I make it to 89, and my other projections are right). But those d**n IRMAA surcharges (also a government plan), will reduce my tax savings by a whopping $25k. I call that a good deal, but apparently some here think I’m getting scr***ed.

     Reply

252. Terry says

     April 21, 2022 at 2:26 pm

     You must have a whopping big IRA to be able to save $500k. Keep in mind that the increased Medicare premium due to the conversion will only affect your Medicare premiums for one year – 2 years after the conversion. I made a bonehead move myself when doing a Roth conversion. I thought that my converson was an amount that would keep me just under the income point to go to the next tier. Unforturnately, I forgot about my muni bond interest which is included in MAGI. That was just enough to put over the ncome point and into the next tier. ugh.

     Reply

     • JeffdelRey says

       April 21, 2022 at 2:44 pm

       Double income, no kids. Fortune 100 employers, max contributions to 401k’s for 30 years. Living slightly below our means. Merely average investing acumen.

253. Vic says

     May 9, 2022 at 9:57 pm

     So far I have been able to stay below the 1st IRMAA threshold while still doing some Roth conversions. However, this year is the first year I started collecting social security and while the market is down I’m tempted to convert more money but I’m concerned about how my SS earnings would impact IRMAA, especially considering my wife will also be on medicare by then. I would have to assume the worst case, that 85% of my SS income would count toward my MAGI for 2022. Is that a good rule of thumb? I may either have to forgo doing any conversions or reduce my monthly income withdrawals by the conversion amount to stay below the threshold.

     Reply

     • The Wizard says

       May 10, 2022 at 7:24 am

       Yes on the 85% of SS.
       I did similarly the past several years, but in the middle of the IRMAA brackets, making sure to keep my MAGI below the next higher IRMAA threshold.
       So my Roth conversion amount was initially a bit more than my projected age 70 SS plus my age 72 RMD. Now that I’m 72, I’ve stopped doing Roth conversions so I can stay in the same IRMAA tier, with any luck.
       I may end up doing a smallish Roth conversion of a few thousand dollars in December, depending on where my AGI for the year stands…

     • Ally says

       May 10, 2022 at 7:30 am

       Does IRMAA income include I bond interest?

     • Harry Sit says

       May 10, 2022 at 8:13 am

       IRMAA income includes I Bond interest when you cash out I Bonds. It isn’t income when you only hold I Bonds unless you go out of your way to report interest each year.

     • J J says

       May 10, 2022 at 9:10 am

       I am surprised that it is possible to come close to the first IRMAA threshold and not already be paying tax on 85% of your social security benefits. I shall have to run some scenarios in tax software to model it.

     • Vince says

       May 10, 2022 at 6:29 pm

       I’ve always tried to do Roth conversions when the investments are down and it has
       worked out well. One benefit of the terrible inflation we are having is the upward
       movement of the IRMAA brackets. Thank goodness for Harry’s great work on predicting
       the brackets.

     • Tom P says

       May 11, 2022 at 10:14 am

       Vince, I would appreciate it if you could comment on why doing Roth conversions when the markets are down is a good thing. Is it simply because as the Roth funds (hopefully) recover their value all the future gains are tax free? Thanks.

     • GeezerGeek says

       May 11, 2022 at 10:38 am

       I agree with Vince that a Roth conversion while the market is down is a good thing. The amount of a conversion is a constant. For example, you might be able to do a Roth conversion of $35,000 and still stay under the IRMAA limit. If you do that conversion during a time that the market is down, you will be able to convert a larger percentage of your IRA to a Roth. When the market comes back, more of the comeback gain will be in the Roth rather than the IRA.
       Normally I do my Roth conversions at the end of the year when I have a better idea what the IRMAA limit will be. However, in 2020, I did most of the conversion in March when the markets were down by about 20%. When the market came back, more of the recovery gain was in my Roth than the IRA. Bottom line is that a down market gives you an opportunity to convert a larger percentage of your IRA to a Roth.
       I was conservative in the amount I converted in March 2020 because I was unsure of what the IRMAA limit would be. At the end of 2020, I did an additional conversion to get me closer to the limit when I had a better idea what the limit would be.

254. AnnaC says

     May 9, 2022 at 10:21 pm

     Yes Vic using 85% of SS benefits as taxable is correct. Good luck!

     Reply

     • R E Janes says

       May 11, 2022 at 10:27 am

       I too have used down turns to do ROTH conversions. I have transferred individual stocks rather than cash thereby eliminating transaction cost. I moved several securities during the pandemic and have seen significant upside in all of them. And yes the benefit is to have the recovery in those names tax free.

255. Anna C says

     May 9, 2022 at 10:28 pm

     Also info at this link will be helpful re taxable SS:
     https://www.ssa.gov/benefits/retirement/planner/taxes.html#:~:text=between%20%2425%2C000%20and%20%2434%2C000%2C%20you,your%20benefits%20may%20be%20taxable.
     **File a joint return, and you and your spouse have a combined income* that is
     –between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits.
     –more than $44,000, up to 85 percent of your benefits may be taxable.
     **Are married and file a separate tax return, you probably will pay taxes on your benefits.
     Your adjusted gross income
     + Nontaxable interest
     + ½ of your Social Security benefits
     = Your “combined income”

     Reply

256. Vince says

     May 11, 2022 at 11:14 am

     Tom P,
     Hopefully you have access to Geezer’s reply because it’s very good.
     If you don’t I will try to explain why I think it’s better to roth convert during a down
     market.
     If you have a mutual fund with a lowered NAV you need to convert more shares to
     get to the same dollar amount as before the crash. When the additional shares are in
     the roth hopefully the market will go up and you have more shares participating in
     the increased NAV.

     Reply

257. IRMAA Needs To Go says

     May 11, 2022 at 12:07 pm

     Folks, the arithmetic shows the net effect is identical for doing Roth conversion versus not, assuming marginal tax rates are the same now and in the future. Whether the investment drops or not is irrelevant. What does matter is “side effects” such as bumping you into a higher marginal bracket — here, converting a smaller amount thanks to a market decline in asset value favors doing the conversion when the asset value is reduced. Other side effects include AMT considerations, social security taxation, etc. Each of these “non-linearities” in the taxation scheme have to be considered on their own and then in aggregate. One often missed is access to certain situation/time-qualified tax credits, such as the American Opportunity Tax Credit for those paying college expenses….doing a TD-to-Roth conversion in a tax year when you are incurring college costs can easily disqualify you for the “free” first $2K per college-attendee tax credit, for instance.

     While it may make some of us feel better to convert a smaller amount due to a market downturn, the arithmetic does not bear it out unless you consider all the side effects/non-linearities such as those listed above (and many others, I’m sure).

     Reply

     • Tom P says

       May 11, 2022 at 2:56 pm

       My main reason for considering Roth in-plan conversions is to have a bucket of money that could be used to keep from exceeding an IRMA threshold when the inevitable occurs and either myself or my wife passes and the survivor then drops into the single income bracket. But even then I’m not sure it’s worth paying the taxes now.

258. Vince says

     May 11, 2022 at 12:32 pm

     Roth conversions aren’t for everyone but personally I’d like to have different buckets of retirement money to pull from. Having only been able to convert 25% of my traditional roth, I’m still planning on doing some converting in the future until I start taking SS.

     Reply

     • Ally6770 says

       May 11, 2022 at 3:53 pm

       Tom P,
       When my husband passed suddenly, I disclaimed all of the traditional IRA’s, 401k’s etc. My children were able as contingent beneficiaries to inherit all of them and a large savings that I took my name off from days before he passed.
       They were able to take the traditional IRA’s for their lifetime instead of the 10 years as now required. Everyone tried to talk me out of it. Actually it has been 10 years and I still think it was a great idea for me and for them.
       I am still trying to convert my traditional IRA’s to a Roth as much as I can without paying a higher Medicare premium as the children are also near retirement. I am planning part of their retirement for them so they will not have to pay taxes on the RMD’s nor will it count in their IRMAA for higher Medicare premiums.

259. Rick Brown says

     May 13, 2022 at 9:55 am

     When will the May information about inflation be published with resultant Harry projections for IRMAA tables?

     Reply

     • Tom P says

       May 13, 2022 at 11:02 am

       Rick, the CPI-U information is published per the following schedule. I wouldn’t expect any significant changes to what Harry already projects:
       May-22 on 10-Jun-22
       Jun-22 on 13-Jul-22
       Jul-22 on 10-Aug-22
       Aug-22 on 13-Sep-22
       Sep-22 on 13-Oct-22
       Oct-22 on 10-Nov-22
       Nov-22 on 13-Dec-22

     • Harry Sit says

       May 13, 2022 at 5:46 pm

       The 0% inflation table and the 7% inflation table already look pretty much the same. There won’t be much change from now till August when the inflation numbers fall into this range. The window to influence the 2021 MAGI already closed. You can’t do anything anyway with a $1,000 change in the brackets here or there.

260. GeezerGeek says

     May 13, 2022 at 11:04 am

     You can find the release dates at this URL: https://www.bls.gov/schedule/news_release/cpi.htm

     Here are the dates from that site:

     Reference Month Release Date Release Time
     October 2021 Nov. 10, 2021 08:30 AM
     November 2021 Dec. 10, 2021 08:30 AM
     December 2021 Jan. 12, 2022 08:30 AM
     January 2022 Feb. 10, 2022 08:30 AM
     February 2022 Mar. 10, 2022 08:30 AM
     March 2022 Apr. 12, 2022 08:30 AM
     April 2022 May 11, 2022 08:30 AM
     May 2022 Jun. 10, 2022 08:30 AM
     June 2022 Jul. 13, 2022 08:30 AM
     July 2022 Aug. 10, 2022 08:30 AM
     August 2022 Sep. 13, 2022 08:30 AM
     September 2022 Oct. 13, 2022 08:30 AM
     October 2022 Nov. 10, 2022 08:30 AM
     November 2022 Dec. 13, 2022 08:30 AM

     Reply

261. Lincoln says

     May 13, 2022 at 12:41 pm

     Over what months of inflation data are the IRMAA brackets based? Is it from September of the prior year to August of the current year, in order for Medicare to calculate the brackets for the next year?

     Reply

     • Tom P says

       May 13, 2022 at 12:59 pm

       Yes, that is correct. To make your own calculations you take the average CPI-U of those 12 months and compare to the average of the 2017-2018 months (249.280) and then adjust the base year brackets from 2019.

       Example: if the CPI-U was to stay fixed at the April rate of 289.109 value (fat chance!), the average for 2021-2022 would be 283.797. Divide that by 249.280 and you get a multiplier of 1.13847. Use that number to adjust the 2019 SINGLE brackets to get the 2023 brackets, which are then rounded to the nearest $1000. The married is then 2x the single bracket. So, for the lowest tier, multiply $85,000 x 1.13847 = $96,769.95, which then rounds to $97,000 for the lowest single bracket; married is $194,000 projected.

262. Clark says

     June 11, 2022 at 5:43 am

     Thank you again for your calculations and I enjoy your books.

     Is it safe to assume that the actual Medicare premiums in say 2024 will scale with inflation relative to what they are in 2022?

     Reply

     • Harry Sit says

       June 12, 2022 at 10:10 am

       The actual Medicare premium is determined by the expected costs of the Medicare program itself. Whatever it is, the standard premium is set to 25%. There was a big increase in 2022 ($21/month) because Medicare expected a large cost increase due to the new Alzheimer’s drug. The 2023 premium may come down because Medicare won’t pay as much as they originally thought. Who knows what comes up in 2024. In any case, the increase in Medicare premium ($10-20/month) is much less than the effect of IRMAA.

263. Johnny Roland says

     June 22, 2022 at 1:22 am

     So, it appears that there are only 3 levels of IRMAA for MFS?
     1. Less than $91k
     2. Between $91k to 409k
     3. Over $409k
     Can you confirm? Any source in POMS for this reasoning?

     Thanks!

     Reply

     • Harry Sit says

       June 22, 2022 at 5:30 am

       That’s correct. Congress wrote the law that way.

264. Terry says

     June 22, 2022 at 7:43 am

     I am confused by your post. I assume that MFS is Medicare Fee Schedules which are the fee schedules used to pay providers for procedures performed. Are there different fee schedules used to pay providers based on the patient’s income — i.e. a patient with a higher income will pay more for a specific procedure than a patient with a lower income? I always thought that the fees paid for procedures were the same for all Medicare beneficiares. Can you elaborate.

     Reply

     • The Wizard says

       June 22, 2022 at 8:57 am

       Married
       Filing
       Separately…

265. Jane Jacobs says

     June 22, 2022 at 7:46 am

     MFS is married filing separately

     Reply

266. Terry says

     June 22, 2022 at 7:51 am

     Thanks. Too many acronyms. 😊

     Reply

267. bev lolr says

     June 22, 2022 at 8:23 am

     Wondering what the MFJ tiers are estimated to be?

     Reply

     • Braden says

       June 22, 2022 at 8:26 am

       The married filing jointly is double what the single filing is.

268. bev lolr says

     June 22, 2022 at 8:43 am

     Aren’t there more tiers for MFJ? Trying to figure out new tier ranges with inflation estimates.

     Reply

     • RobI says

       June 22, 2022 at 8:51 am

       See top of thread post for estimated MFJ and single tiers by year

269. RobI says

     June 22, 2022 at 8:51 am

     See top of thread post for estimated MFJ and single tiers by year

     Reply

270. Bill C says

     July 13, 2022 at 12:52 pm

     With June CPI-U Index I now have Tier 2 MFJ now rounding to $246,000 (Individual Filer $123,000) (with no increase in the index for July and August. It is very hard to imagine a drop in the index in the next two months.
     Tier 1 Individual Filer is at $97,000 but with a good possibility to round to $98,000 by August.
     Tier 1 MFJ now $194,000 and with probability of $196,000 by August.
     Tier 3 Individual Filer has recently reached $153,000 and not likely to increase.
     Tier 3 MFJ stands at $306,000.
     Tom P. and GeezerGeek do these values match your spreadsheets?

     Reply

     • Tom P says

       July 13, 2022 at 2:33 pm

       Thanks Bill. I (and Harry) agree with your calculations. I guess a couple of “good things” about inflation are I can easily see the I-Bond rate going over 10% in November if we just get a 2-point increase in the CPI-U number each month for the next three months; it could even hit 11-12% if inflation stays high. Also, with no inflation from now through September the CPI-W number from June will yield a SS increase of 9.0% next January. That alone is going to create issues for SS funding.

     • Ed Fogle says

       July 13, 2022 at 2:57 pm

       Please clarify these numbers determine MAGI limits for this year that determine IRMAA premiums in 2024.
       Thanks

     • Harry Sit says

       July 13, 2022 at 3:05 pm

       Bill was talking about 2023 numbers (based on 2021 income). I have two tables for 2024 (based on 2022 income) in the main post. Please scroll up to the top to see them.

     • Tom P says

       July 13, 2022 at 3:08 pm

       Ed, to clarify, Bill’s numbers are for the MAGI limits for 2023 based on 2021 income. See Harry’s info at the top of this thread. He also has predictions for 2024.

271. Jim M says

     July 13, 2022 at 4:24 pm

     A 9.0% increase in Social Security benefits for Jan 2023 should also mean a substantial percentage increase in the Federal income tax brackets for 2023. I don’t know if CPI-W is used to index the Federal tax brackets, but more federal income should end up being taxed at lower bracket rates. Unfortunately, the tax brackets $200,000 Single ($250,0000 MFJ) used to calculate the 3.8% Surcharge on Net Investment Income are not indexed for inflation, which will subject more people to that tax.

     Reply

     • Harry Sit says

       July 13, 2022 at 4:39 pm

       I have preliminary projections for 2023 federal income tax brackets in 2023 Tax Brackets, Standard Deduction, 0% Capital Gains, etc..

272. Paula T says

     July 13, 2022 at 4:53 pm

     Just suprised, for lowest bracket for 2023, with no inflation, it’s 97000. But, it’s only 98000 with 9% inflation (and no changes in higher brackets).

     Reply

     • GeezerGeek says

       July 13, 2022 at 6:11 pm

       Paul T, that is because most of the data for 2021 income limits is already in the calculation so the 9% projected inflation rate is only applied to the inflation increase for July and August. The data for September 2021 thru June 2022 is already fixed and the projected inflation rate will not change those numbers.

     • GeezerGeek says

       July 13, 2022 at 6:24 pm

       Paula T, It is pretty confusing what data applies to what year. The IRMAA income limits for year 2021 is calculated from the inflation data from September 2021 thru August 2022. If you exceed those income limits in 2021, you will be assessed an IRMAA penalty in 2023. Frankly, I find it kind of hard to keep all dates straight when trying to figure that out.

273. Jim M says

     July 13, 2022 at 8:08 pm

     To help minimize my own confusion, I just focus on the projected IRMAA income brackets for the current tax year (e.g. 2022) that will determine Medicare Premiums two years hence (e.g. 2024) The IRMAA bracket forecasts for the current tax year (e.g. 2022) are the most useful in terms of controlling one’s MAGI income for the current tax year to avoid exceeding the next highest IRMAA bracket and having Medicare Premiums taxed at a higher IRMAA bracket rates two years hence. The Medicare Premiums for next calendar year (e.g. 2023) will be based IRMAA income brackets for the prior year (e.g. 2001) which the IRS will publish in the fall of the current year (e.g. 2022). For most people, income for the prior tax year is no longer controllable and is water under the bridge. So I don’t pay much attention to it.

     Thank you Harry for this most useful blog and your estimates for IRMAA and other tax brackets.

     Reply

     • The Wizard says

       July 13, 2022 at 8:15 pm

       I totally agree with JimM.
       I can only tweak my 2022 AGI at this point, thru the end of December, via Roth conversions.

       I suppose in hindsight it’s interesting to see how accurate last year’s projections turned out to be even though we can’t make any changes to our 2021 AGI…

     • GeezerGeek says

       July 13, 2022 at 8:35 pm

       DItto to Jim M’s comment. 2021 is closed out so 2022 income management is my focus and I’m not even looking at the 2021 income limits. Like “The Wizard”, I do Roth conversions up to the “expected” IRMAA threshold. Looks like I could have converted an additional $6,000 in 2021 but who knew inflation would return to the level of the early 1980’s after having been so low for so long. Still, thanks to Harry, I have a much better handle on the “expected” IRMAA threshold than I did before I found this site.

274. Devorah says

     July 21, 2022 at 12:06 pm

     I am too wondering about the IRMMA brackets
     2023 income for 2025
     2024 income for 2026
     I like jumbo CD’s . I don’t want to be “just a ittle over” Boom!
     Any CMS/ Soc Sec places we can look. The online stuff is so basic or dated technical.

     Reply

     • Terry says

       July 21, 2022 at 3:42 pm

       Dont’t buy CD’s. Treasury Bill interest rates are much better than any CD.

275. The Wizard says

     July 21, 2022 at 12:14 pm

     We’re worrying about 2022 income for 2024 at present. We’ll worry about 2023 income next year…

     Reply

276. StanW says

     July 22, 2022 at 10:06 am

     I really appreciate your projected IRMAA for 2023 and 2024.
     With 0% inflation from July 2022 to August 2023, the first tier IRMAA is projected to increase from $194,000 for year 2023 to $202,000 for year 2024. Up $8000 with 0% inflation. Please elaborate a little of the calculation methodology. Thanks

     Reply

     • Harry Sit says

       July 22, 2022 at 10:20 am

       I tried showing it with that chart. Take a series of 12 numbers that are increasing, say 1 to 12. The average is in the middle, closer to 6 or 7. Take a second series of 12 numbers that start at 12 but stay flat at 12. The average of this second series is 12. The average of the second 12 numbers is still higher than the average of the first 12 numbers even when the numbers stop increasing.

277. Stanw says

     July 22, 2022 at 10:40 am

     Thanks
     I also just read your answer #146.
     Here is the calculation as I understand it
     2019-2020 1.0146
     2020-2021 1.03
     2021-2020 1.00 (No inflation)
     1.0146×1.03×1.0=1.045
     $97,000×1.045=$101,000 ($202,000 for married couple filing jointly)
     Correct?

     Reply

     • Braden says

       July 22, 2022 at 11:09 am

       This is what I have at #146 on my Mac. Is this still wrong? None of Harry reply’s are numbered. Is this something that can be fixed?
       Braden says
       AUGUST 27, 2021 AT 3:38 PM
       The only computer I use is a desktop Mac. IOS and use Safari with Google Chrome as the browser.
       Thank you for trying to help. Where near the comment is the number? I would assume it is by the name

       REPLY
       Ken says
       AUGUST 27, 2021 AT 8:41 PM
       #79 comment was by CARL and dated October 7, 2020 at about 5pm. Harry’s reply is after it.

       Harry Sit says
       AUGUST 28, 2021 AT 6:04 AM
       I fixed the comment numbers. They show up on my iPad and phone now. Please delete browser cache and refresh if you still don’t see the comment numbers.

       Thank you for bringing it up. I learned that Safari on Mac behaves differently from Chrome on Windows because Safari uses a different rendering engine.

278. Stanw says

     July 22, 2022 at 11:43 am

     Sorry. It is # 164 and not # 146

     Reply

279. Davidk says

     August 11, 2022 at 5:31 pm

     Well I got screwed for 2023. I just barely crossed the line above $91,000. If that rises to $101,000 for 2024, then I’m safe. What a nasty surprise though for 2023. I never head of this tax until August 2022.

     Reply

     • Paul says

       August 12, 2022 at 7:35 am

       Davidk,

       Harry’s projection for start of the second MAGI tier in 2023 is $97,000 (for 2021 income). That is with no increase in the CPI-U in the final month (August, reported in September) of 2022 that is used for 2023.

       If the CPI-U increases at a 4.1% (or higher) annualized rate in August, I project the second MAGI tier will start at $98,000 in 2023. Harry uses a 9% future inflation rate, and gets the same result.

       Looking forward to 2024, if the annual inflation rate is 6% during the measurement period (9/22 – 8/23), I project the second MAGI tier in 2024 (for 2022 income) will be $105,000. Harry gets the same result with 5%.

     • over65 says

       August 12, 2022 at 9:02 am

       David K:

       I don’t think you are reading the tables correctly – and this process is somewhat confusing.

       The $91k is for 2020 MAGI to be used to determine 2022 IRMAA – that is already reflected in your 2022 medicare deductions.

       You state that just above $91k is your 2021 MAGI, so you have to look at the table where the the 2021 MAGI limit of $97k determines your 2023 IRMAA tax. Sounds like you are fine going into 2023 based on your 2021 MAGI.

       click here:

       https://thefinancebuff.com/medicare-irmaa-income-brackets.html#htoc-2023-irmaa-brackets

280. ros says

     August 12, 2022 at 8:14 am

     Davidk
     MAGI or IRMAA?

     Reply

281. Vince says

     August 12, 2022 at 9:06 am

     Paul,
     Thanks for your continued work. So happy Harry started this in 2019. Can’t believe how inflation has changed since the first adjustment in 2020. Not sure yet on how high I will go on Roth conversions this year but it’s nice knowing how high the estimates for 2024 have gone up. Wish I had a crystal ball!

     Reply

282. RobI says

     August 13, 2022 at 4:26 am

     In the 2023 estimates table using 2021 income and 0% inflation, second bracket shows single as $123k. However married limit shown as $244k, not double the single number =$246k. Is this correct?

     Reply

     • Harry Sit says

       August 13, 2022 at 5:46 am

       Sorry, it should be $246k. I’m traveling outside the country right now. I will fix it when I return.

283. Ros says

     August 13, 2022 at 6:30 am

     If I understand your table above, I can assume that the minimum income for 2022 for single at the lowest bracket can be up to $101,000 guaranteed without the medicare premium going up in 2024 because of 2022 income. I plan to purchase more long term CD’s after the Sept Meeting but must stay below $101,000 to guarantee that my 2024 Medicare premium will not go higher. Trying to prepare for my Roth conversion also in 2022 and for 2023 if I am able with the new interest . When will the final projections be made for 2022 income? Can these figures change after the final projection is made this fall for IRMAA or after we have filed our income tax? I also want to sort of get a good idea for the SS increase so that I can include the interest for the CD’s I have now and ones I hope to purchase and still make a Roth conversion as my children are near retirement. I have no maturing CD’s next year.

     Reply

     • Tom P says

       August 13, 2022 at 9:35 am

       What Jim said… plus the SS increase is currently sitting at 8.9%. July was odd in that most items ticked up, but energy went down quite a bit, which led to approximately 0% increase for July. The SS Cola is based on the average of the CPI-W of July, August, September of this year compared to last year’s average. So far, we have one month for 2022 at 292.219. Last year’s average was 268.421. You can find the data here: https://www.bls.gov/regions/mid-atlantic/data/consumerpriceindexhistorical_us_table.htm

284. Jim M says

     August 13, 2022 at 8:18 am

     ROS,
     The IRS won’t finalize and publish the IRMAA income bracket levels for 2024 Medicare Premiums based on 2022 income until the fall ( mid Oct) of 2023. The final levels for 2022 income will be based on the actual inflation that occurs between now and August 2023. The $101,000 number in the table you are looking at assumes there will be zero inflation between now and then.
     The income brackets in this thread get updated as the government publishes monthly inflation updates. Between now and mid Dec 2022 updated estimates of IRMAA brackets for 2022 income will get posted here. You can use those numbers for 2022 income tax planning and then make an educated guess about how much inflation you want to allow for between January and August 2023.

     Reply

285. Vince says

     August 13, 2022 at 9:38 am

     So frustrating that the government uses a 2 year lookback period to calculate IRMAA.
     We should be able to know December 2022 what the income levels will be for 2024.
     It does help that Harry can give us an estimate but the system is messed up.
     It forces us to be conservative with Roth conversions.

     Reply

     • Paul says

       August 13, 2022 at 9:58 am

       Vince,

       The two-year lookback is required because they use the MAGI from your tax return, and your tax return isn’t due until April in the following year. With extensions, it could be even later.

       However, the MAGI brackets are determined by the CPI increase from August to September in the previous year. It would be nice if they used the CPI increase from a year earlier, but that would reduce the IRMMA revenue.

       The net effect would be to increase the base Medicare premium to make up the difference.

     • Jim M says

       August 13, 2022 at 1:16 pm

       The two year income lookback is quite reasonable. It would not be practical to base someone’s Medicare premiums on a on a shorter one year lookback. For example, it would be difficult for Medicare to set premiums starting in January 2023 based on 2022 income when most people will not a have filed their 2022 tax returns until April 15, 2023 with return filing extensions allowed until Oct 15, 2023.

       The lookback period is not the issue. It is the delayed calculation of the inflation adjusted income brackets that makes tax planning more difficult. The inflation adjustments are not calculated until 8-9 months after the income tax year is closed. I was surprised the IRS / Congress decided to do it this way. It would be nice from a tax planning perspective if the IRS would finalize and publish 2024 IRMAA income brackets based on 2022 income in the fall of 2022 before the 2022 tax year is done. However, that would mean that income brackets based on 2022 income would not be adjusted to include an additional years inflation during 2023. The additional years delay in calculating the IRMAA income brackets would appear to benefit most taxpayer’s since more taxpayer income ends up being taxed below higher inflation adjusted IRMAA income brackets. So I am not going to complain about the benefit that delayed IRMAA calculations are likely to provide.

286. Vince says

     August 13, 2022 at 10:47 am

     Paul,
     Yes I understand but I still wish there was a way for the government to tweak the system
     so we have a better way to get our planning to be more accurate and not have any guesswork at all when we do our conversions at the end of this year.
     Thanks for your work.

     Reply

     • Marty says

       August 13, 2022 at 10:54 am

       Personally, I don’t think our federal gov’t gives a jot about our financial planning. Get maximum revenue is the game plan.

287. Stanw says

     August 22, 2022 at 3:04 pm

     Based on your forecast, It is pretty sure that the 2023 IRMAA will be around $97,000 or $98,000 for individual or MFS
     for 2024 IRMAA, your forecast is $101,000 with zero inflation from now till August 2023.
     Following your calculation method, if inflation is -2%, the 2024 IRMAA will be $100,000
     Naturally by year end 2022, we still have 4 months of data.
     Question: What inflation figure (0%? -2% or +5% inflation till August 2023) would you recommend I use for filing 2022 return?

     Reply

288. Paul says

     August 24, 2022 at 2:10 pm

     I haven’t been able to find an answer for this, but maybe I just can’t come up with the right search terms. I think the folks on this thread know more about IRMAA than anyone!

     I start Medicare soon. I enrolled the first day it was possible (3 months before 65th birthday), so I could get the process started. I got a letter saying that I owed IRMAA, and stated the higher premium amount. I expected this, as I did a Roth conversion two years ago.

     I haven’t started Social Security yet, so I have to pay the premiums myself. I got a bill for the STANDARD premium ($170.10/month), and I paid 3 months in advance so I could use a credit card (and get the rewards!). So, my next premium isn’t due for a while.

     The Medicare.gov site now includes an IRMAA addition to my premium, and I don’t think it was there earlier (but I might not have looked in exactly the right place). But, there’s no demand for additional payment. It even implies that my next premium isn’t due for 3 months.

     I only expect to owe IRMAA for the last part of this year. I’ve carefully managed our MAGI for the past two years to be sure I don’t owe it next year.

     My question for anyone that has gone through this as they turn 65: do I need to make an additional payment for IRMAA, even though they haven’t billed me for it?

     Reply

     • RobI says

       August 24, 2022 at 4:41 pm

       The first payment is an estimate. If they overcharge they will eventually fix it but you may have to make a claim if your MAGI changed. There is a claim process for that on the site. It may take few months to sort out but I had good experience with them sorting things a few years ago.

       Good luck

     • Tom P says

       August 24, 2022 at 5:45 pm

       Paul, you didn’t specify this but if your income for 2022 has dropped or filing status changed compared to 2020 due to one of the qualifying “Life-Changing Events” you can file form SSA-44 to base your 2022 IRMAA on your 2022 income. I did that when I retired in mid-2020 and it saved us quite a bit.

     • Paul says

       August 24, 2022 at 6:07 pm

       RobI, thanks for the info. My first payment was actually an undercharge. I wanted to be sure I wasn’t supposed to “correct” it myself. If I’ll eventually be billed for it, I’ll pay it at that time. I’ve been budgeting for it all year.

       Tom, none of the life-changing events apply to me. This was a one time event that I planned: we converted IRA assets to Roth one last time, as it would only cause an IRMAA surcharge for a few months.

289. Gary says

     August 24, 2022 at 11:47 pm

     Don’t pay extra. My first 6 months were nonsensical, but I tracked it carefully and in the end they got it right.

     Reply

290. David says

     September 4, 2022 at 1:36 pm

     Harry and others,
     You may find this information useful about the number of persons paying IRMAA and the amount of IRMAA paid per year along with estimates for the future.
     2022 ANNUAL REPORT OF THE BOARDS OF TRUSTEES OF THE FEDERAL HOSPITAL INSURANCE AND FEDERAL SUPPLEMENTARY MEDICAL INSURANCE TRUST FUNDS
     Table V.E3.—Part B Income-Related Premium Information Page 199

     Reply

     • Harry Sit says

       September 5, 2022 at 7:27 am

       David – Thank you for pointing to the Medicare Trustees Report. I added the stats to the post.

291. The Wizard says

     September 5, 2022 at 2:54 am

     Link to that report doesn’t seem to be working…
     ☹️

     Reply

     • Harry Sit says

       September 5, 2022 at 7:16 am

       Here’s the link to the Medicare Trustees Report: https://www.cms.gov/files/document/2022-medicare-trustees-report.pdf

       Table II.B1 on page 12 (page 18 in the PDF) shows that 58.4 million total beneficiaries paid $111 billion in total Part B premiums, and had $406 billion in total expenses for Part B in 2021.

       Table V.E3 on page 199 (page 205 in the PDF) shows 4.8 million beneficiaries paid $10.5 billion in Part B IRMAA in 2021, which was 8.2% of the total beneficiaries and 9.5% of the total premiums for Part B.

       IRMAA reduced the government’s share of the total expenses by 2 percentage points, which is more trouble than its worth in my opinion. Simply rolling it into the tax rates on high-income households would’ve been more effective. The prevailing allergic reaction to higher tax rates brought us this convoluted IRMAA gymnastic.

292. Songbill says

     September 5, 2022 at 10:01 am

     Harry,
     Thanks for your highly informative post about those two tables. Your pointing out that IRMMA only offset 2% of total Medicare expenses ($510.4 billion) gives pause for reflection. I immediately thought of those TV ads (“Dynomite!”) encouraging eligible people to call about possibly getting their standard Medicare deduction put back into their monthly SS payment. I wonder if those of us paying for IRMMA are currently providing all of the $$ to offset this relatively new program of returned Medicare premiums derived from SS payments. I am wondering what would the $128 billion total premium amount be if that SS deduction repayment program was not in effect?

     Reply

     • Harry Sit says

       September 5, 2022 at 11:27 am

       The Medicare Part B Giveback benefit comes from certain private Medicare Advantage plans, not the government. Those private plans say enrolling in them costs less than the full Medicare Part B premium. So they’re giving the difference back as an inducement to enroll in their plans. The government still collects the full Medicare Part B premium. Your IRMAA premium doesn’t pay for the giveback.

293. Paula Thompson says

     September 5, 2022 at 10:07 am

     Actaully, the income limits on “Dynomite” are quite astrict and quite low. Very few people end up qualifying for the offset (to get whole amount, generally need income below $16000/year).

     Reply

294. GeezerGeek says

     September 5, 2022 at 10:27 am

     Thanks David! This is great information that I haven’t seen before.

     I had read on the internet some time ago that when the bill that created the IRMAA premiums (Medicare Modernization Act of 2003) was enacted, it was intended to affect no more than 5% of the Medicare participants. I used the tables on pages 181 and 199 to calculate what percentage of Medicare participants have paid IRMAA for the years available in the report and here they are:

     Year Percent
     ——- ———–
     2010 4.3%
     … …
     2015 5.7%
     2016 6.3%
     2017 6.5%
     2018 6.8%
     2019 7.7%
     2020 8.2%
     2021 8.2%

     Prior to 2011, the IRMAA brackets were adjusted for inflation, as they are now. However, the ObamaCare act (Affordable Care Act) froze the IRMAA inflation adjustments for the years 2011 to 2019. That is why you see the percent of Medicare participants paying IRMAA increasing during that time. Fortunately, the average rate of inflation was rather low during those years. Many more Medicare participants would be paying IRMAA today if inflation had been at the historical average. Still, as you can see from the above numbers, the percentage of Medicare participants paying IRMAA increased during the freeze from 4.3% to 8.2%.

     Reply

     • Braden says

       September 5, 2022 at 11:57 am

       I thought when the new laws were written for Medicare that when 8% of retirees paid higher Medicare premiums the income number would raise every year for IRMAA.

     • GeezerGeek says

       September 5, 2022 at 12:33 pm

       Braden, Could be but all of the articles that I’ve seen on this referred to the freeze being on specific years, 2011 thru 2019. Here is a link to an article published in 2014 that stated the freeze would last until 2019. https://www.kff.org/medicare/issue-brief/income-relating-medicare-part-b-and-part/

295. gary says

     September 5, 2022 at 1:07 pm

     I am trying to match my numbers up so i can calculate estimates, yours are spot on but want to ask you about the formula. please correct me if i am wrong.

     Aug 2021 cpi-u = 273.567 is this used as the base for 2023 or was it the average of the prior 12 months? if it was the prior 12 months as the base can you tell me what that base cpi-u was? . 273.567 does not add up when i do the average which is why i think it was the average month cpi-u from sep-20-aug-20 which is used

     Reply

     • gary says

       September 5, 2022 at 1:25 pm

       went back and did more math. lol i added the cpi-u from sep2020-aug2021 summed the 12 months cpi-u and divided by 12 to get a monthly average cpi-u of 265.4466

       using that as the base. and then adding sep-2021-july2022 and using same july cpi-u of 296.276 for august it would give an average monthly cpi of 285.8571,

       285.8571-265.4466=20.410 /265.4466 = 7.69% increase in irmma for 2023. =91000*1.0769 =97,997 rounded down( i believe it is not rounded to nearest ,000 but may be wrong) $97,000. is that calculation correct?

     • Tom P says

       September 5, 2022 at 2:45 pm

       Gary, close, but no cigar. What you need to do is divide the 2021-2022 average of 285.857 (using July’s number for August) by the 2017-2018 BASE year average of 249.280, which yields 1.14673. Then you multiply the BASE year first bracket ($85,000) by this number to get $97472, which rounds down to the nearest thousand to yield $97,000. The higher brackets are adjusted similarly. I think the August cpi-u could continue to drop a bit, maybe 8% increase over 2021 instead of 8.5% for July, but that won’t be enough to change the predicted numbers.

296. gary says

     September 5, 2022 at 2:59 pm

     so they always use the 2017-18 base year average and 85k , instead of the prior years average, good to know

     thanks

     Reply

297. RobI says

     September 5, 2022 at 3:50 pm

     Just a comment on the 2022 Married couple tier 2 income limits. Since its already estimated by Harry at $254k in 2022 income, with 0% inflation, its already above the $250k joint income threshold above which a further 3.8% NITT tax on investment income kicks in.

     For some, NITT could be an even bigger reason than IRMAA to manage RMDs and Roth conversions etc carefully!

     I’ve not read of any plans to increase these thresholds.

     Reply

     • Harry Sit says

       September 5, 2022 at 3:59 pm

       To be clear, NIIT only applies to the amount above the $250k threshold. If your income goes to $254k after RMD and Roth conversion, the 3.8% NIIT only applies to $4k in investment income, which comes out to about $150. It’s not on your entire investment income.

298. RobI says

     September 5, 2022 at 4:18 pm

     Thanks for the clarification Harry

     Reply

299. Paul says

     September 13, 2022 at 11:17 am

     Harry, have you recalculated the IRMAA thresholds based on today’s CPI release?

     What source do you use for the CPI-U? I’ve been getting it from here:

     https://data.bls.gov/timeseries/CUUR0000SA0

     However, the CPI-U at this source actually went down slightly from July to August, contradicting the BLS press release saying it increased by 0.1%:

     https://www.bls.gov/news.release/cpi.nr0.htm

     Is there another authoritative source with different CPI-U’s?

     Reply

     • Harry Sit says

       September 13, 2022 at 11:23 am

       I already updated everything in the post. You have the correct numbers. The press release uses seasonally-adjusted numbers. We need to use not-seasonally-adjusted numbers.

     • Paul says

       September 13, 2022 at 11:32 am

       Thanks, Harry. I was wondering if “seasonal adjustments” were the culprit. I appreciate the clarification.

       One thing I’ll note: I’ve been tracking the difference in the IRMAA thresholds calculated per the US Code and the CFR (they are slightly different). It appears the beginning of the second IRMAA bracket will start at $97K per the US code, and $98K per the CFR. The other thresholds are the same.

       I wrote my Congressman about the discrepancy earlier this year, and they forwarded my calculations to the Social Security Administration (I think that’s who is responsible). But, neither of us have received a response. I guess we will find out soon which method they use.

       If they use the CFR (without changing it), it might require a lawsuit to force them to follow the SCOTUS precedent: the US Code supercedes the CFR, as long as it is clearly stated and not left to “interpretation”.

300. Tom P says

     September 13, 2022 at 12:17 pm

     Paul, you can get the CPI-U and CPI-W (for SS COLA) here: https://www.bls.gov/regions/mid-atlantic/data/consumerpriceindexhistorical_us_table.htm, or https://www.bls.gov/news.release/cpi.t01.htm if you just want CPI-U. Sometimes the historical table lags the release update by a day or two, but lately it’s been updated the same day as the release.

     Reply

301. Mary Tully says

     September 16, 2022 at 6:15 pm

     Thanks, Harry, for this useful information!
     I thought that untaxed Social Security benefits were included in the income for determining IRMAA. I went back and read the other comments regarding this, and now I see I’ve been in the dark about this. Thanks for enlightening me!

     Reply

302. Steve says

     September 18, 2022 at 11:15 am

     Harry, thanks for the post. The 2024 estimates (based on 2022 income) are helpful for my end-of-year 2022 tax and income planning.
     Looking forward to your upcoming guidance for preparing that pesky Form 1116 (foreign tax credit) in 2022.

     Reply

303. David Schaeffer says

     September 23, 2022 at 1:53 pm

     This is by far the best and most useful analysis of IRMAA I have found. I hope that by subscribing I get occasional updates. Even better would be a specialized calculator to help manage this year’s withdrawals.

     Regarding public policy, IRMAA should be replace with something like income tax brackets which have no “cliffs”. Consideration of Medicare fees should not drive financial decisions.

     Reply

     • Ed Fogle says

       September 23, 2022 at 1:59 pm

       Totally agree. As much as I believe there shouldn’t be such a thing as IRMAA the “cliff” issue is totally ridiculous. Only a bureaucrat could have come up with it. They don’t think like normal people.

     • powderriver says

       September 23, 2022 at 2:12 pm

       Income tax brackets have no cliffs??? That’s not what my form 1040 instructions indicate. The % of taxable income you owe certainly hits “cliffs” at the tax-bracket upper-limits.

     • GeezerGeek says

       September 23, 2022 at 3:48 pm

       While I don’t think the IRMAA cliffs are fair, I can understand why they were implemented in that manner. As it is now, the Part B premium can be any one of five different amounts, depending on which which IRMAA bracket you are in. If the IRMAA penalty was implemented as an percent of the amount over the bracket, then the amount of the Part B could be any amount within the range of the brackets, which would be a real nightmare for CMS to manage, especially with the systems they had back in 2003 when IRMMA was implemented. IRMAA is an income tax but it isn’t administered by the IRS. I think it would be better if IRMAA was implemented as an income tax surcharge administered by the IRS but that would probably mean that the IRMAA would be paid as a lump sum as part of your income taxes rather than spread out as 12 monthly payments. Once again, I’m not in favor of the cliffs and would like for it to be modified so that it is more fair but that is my take on why it is what it is.

304. Terry says

     September 23, 2022 at 2:19 pm

     Income tax brackets do not have cliffs. If you reach a higher bracket, all income from the lower bracket is taxed at the rate for the that bracket. Only the income over the threshhold is taxed at the higher rate. For IRMA, if you go over the threshhold, your entire premium goes up substantiallly. Not the same animal at all.

     Reply

305. Harry Sit says

     September 27, 2022 at 7:13 am

     The 2023 standard Medicare Part B premium will be $164.90 per month (versus $170.10 in 2022). All the 2023 IRMAA income brackets in this post have been officially confirmed. See page 11 of the PDF below:

     https://public-inspection.federalregister.gov/2022-21090.pdf

     Reply

     • Paul says

       September 27, 2022 at 9:20 am

       Thanks, Harry! Looks like they decided to use the algorithm in the US Code, instead of the (erroneous) algorithm in the Federal Register.

       However, I do see an error in my calculations for start of the fourth tier: it starts at $153K instead of $155K. I’ll go back and figure out why.

     • Paul says

       September 27, 2022 at 9:21 am

       Sorry, I had a brainfade: CFR is “Code of Federal Regulations”, not “Federal Register”.

     • Tom P says

       September 27, 2022 at 11:04 am

       So, what formula do they use to produce the total premiums? They differ from my calcs by 10-20 cents. I’m using the same methodology I used for 2022 that gave the correct results. I thought the 1st tier adjustment was the base premium x 1.4, rounded to the nearest 10 cents, then the 2nd was x 2.0, the 3rd x 2.6, the 4th x 3.2 and the final x 3.4. If the 2nd tier adjustment is x 2.0, there’s no way you can get $329.70 as shown instead of $329.80 ($164.90 x 2.0).

     • Harry Sit says

       September 27, 2022 at 11:16 am

       The $164.90 must have been rounded already (from $164.85?). The introduction in the PDF has more information.

     • GeezerGeek says

       September 28, 2022 at 2:05 pm

       Did I overlook seeing the Part D premium IRMAA adjustments in this announcement or are they still pending? I Googled it and found from another CMS news release (https://www.cms.gov/newsroom/news-alert/cms-releases-2023-projected-medicare-basic-part-d-average-premium) that “the average basic monthly premium for standard Medicare Part D coverage is projected to be approximately $31.50 in 2023. This expected amount is a decrease of 1.8% from $32.08 in 2022.” Since the release said “projected”, I don’t know if that is the actual number they will use to calculate the Part D premium adjustments. If it is, the additional Part D premium will be $11.70, $30.30, $48.80, $67.30, and $73.50 according to my calculations.

     • Tom P says

       September 28, 2022 at 7:31 pm

       Geezer, the actual Part D Base Beneficiary Premium is $32.74, see: https://www.cms.gov/files/document/july-29-2022-parts-c-d-announcement.pdf, which can be obtained from this page: https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Ratebooks-and-Supporting-Data. This data is posted on or about July 29 of each year.

       This produces Part D adjustments of $12.20, $31.50, $50.70, $70.00, and $76.40, which is the same as 2020, coincidently.

     • GeezerGeek says

       September 28, 2022 at 10:23 pm

       Tom P,
       I’m was a bit perplexed by these numbers since the press release I referred to and the publication you referenced were released on the same date, Jul 29, 2022. However, I did find another CMS press release that confirms the IRMAA numbers you provided(https://www.cms.gov/newsroom/fact-sheets/2023-medicare-parts-b-premiums-and-deductibles-2023-medicare-part-d-income-related-monthly) and it was just published yesterday, 2022/09/27. So it is official, the Part D adjustments for the 2023 brackets are as you stated, $12.20, $31.50, $50.70, $70.00, and $76.40. Thanks.

306. Tom P says

     September 27, 2022 at 11:50 am

     Yeah, that would explain it as the numbers work out if the premium amount is $164.85.

     Reply

307. David P says

     October 3, 2022 at 2:51 pm

     It appears to me that if as a two person household, income was something like $180,000 you would be in good shape to not advance a bracket with a little more income in the next few years but that if you were to become a single household through death or divorce you would leapfrog into the under $500,000 bracket and have a significant increase in premium even though you reduce to one premium.

     Reply

308. Ed says

     October 3, 2022 at 7:38 pm

     Yep, now you understand bureaucrat logic. Welcome to the club.

     Reply

309. Celia says

     October 13, 2022 at 8:00 am

     Hands down the best explanation I have ever found on the subject and, being an over 65 tax preparer, numbers wonk, investor and on Medicare myself, I’ve read many. It’s a highly important and little understood subject and not all information found is accurate and most is not written in an understandable way for most people. Kudos on a great article.

     Reply

310. Marc says

     October 14, 2022 at 7:26 am

     I am trying to fine tune my 2022 income to stay below the 2024 IRMAA limits. The 0% inflation results in 202,000 income while the 5% results in 208,000 income; I am trying to calculate what inflation would have to be for a 204,000 income limit. Please check my methodology. The 2023 IRMAA single income is 97,000. The average of CPI-U for 9/21 – 8/22 was 285.848. To get to 204,000 for 2024 the average for CPI-U for 9/22-8/23 needs to be 101,501/97,000 x 285.848 or 299.283. Is my methodology correct? Given that 9/22 CPI-U was 296.808 it would seem that a 1% increase in next few months followed by basically flat should get to that average , is that also correct?

     Reply

     • Tom P says

       October 14, 2022 at 11:07 am

       Marc, you need to go back to the base year, 2017-2018, which had a Sep-Aug average of 249.280. The first single tier back then was $85,000, so you need the 2022-2023 average to be 249.280 x 101,501 / 85,000 = 297.673. I think it’s a pretty safe bet the 2024 tier will be $204,000 or higher for MFJ as I’ve seen some predictions that inflation may go HIGHER next year. If every month from Oct 2022 through Aug 2023 is 5% higher than the previous year the number will be $206,000. I think Harry compounds month-to-month at a 5% annualized rate.

311. bev lolr says

     October 14, 2022 at 2:21 pm

     No one can reliably predict IRMAA tiers for 2024. Even Tom and Harry come up with different numbers for MFJ. Tom’s is a range of $204,000 to $206,000 and Harry’s is $208,000 with 5% inflation.
     I would do another QCD rather than go over the cliff for IRMAA. I think Congress needs to address the tiers especially now with the added 3.8% investment tax over $250,000.
     What are the verified tiers for 2023?

     Reply

     • Ed Fogle says

       October 14, 2022 at 2:50 pm

       So, does this mean I’m very safe budgeting $200,000 MAGI this year? I think Tom and Harry are good enough in their calculations I won’t lose any sleep with this number.

     • Tom P says

       October 14, 2022 at 3:05 pm

       Bev, Harry and I do get the same numbers, which is what I implied but didn’t specifically state. If I increase the CPI each month by a factor of (1.0 + 0.05/12) from Oct through Aug 2023 I get $208,000. What I said above was that each month was 5% higher than the previous year, so no compounding. Harry lists the 2023 tier numbers at the start of this discussion.

     • Paul says

       October 15, 2022 at 7:29 am

       Bev,

       To add to Tom’s comment, if you vary the projected inflation rate and recalculate the threshold for 2023, you’ll find that a range of inflation rates results in the same threshold for any given tier.

       An annualized inflation rate of 5.0% – 7.1% will result in a $208,000 threshold for the second tier. That gives you a target to shoot for. Watch this article as September, 2023, approaches… Harry’s projections will become more accurate as fewer and fewer monthly CPI reports remain.

       However, the inflation rate range(s) will be different for the other tiers, due to the methodology.

     • Paul says

       October 15, 2022 at 7:39 am

       Tom,

       Here’s the calculation I use to avoid compounding the inflation rate monthly, so that the annualized rate isn’t slightly higher:

       CPI = X*((1+Y)^(1/12))

       X is the previous month’s CPI
       Y is the projected annual inflation rate

       I think you could accomplish the same thing by applying adding 5% to the same month in the previous year and repeating for each month, but I haven’t tried that.

312. Ros says

     October 14, 2022 at 2:59 pm

     Does that mean that it would be $100,000 for the first tier for 2022 income for 2024 Medicare premium to not change from the bottom tier?

     Reply

313. bev lolr says

     October 14, 2022 at 3:18 pm

     Thanks Tom! This is totally overwhelming to figure out. Next year we will be paying next to the highest IRMAA tier subsidy due to a “forced” sale of long held real estate. Typically I convert traditional IRA monies to a Roth a little less than the cliff amount.
     One cannot reliably plan since the tiers are not known until very close to the year the subsidies are garnered. I’ m not poker player :)/
     I am very humbly grateful to folks like you and Harry who try their darndest to help neophytes like myself :(/

     Reply

314. Jean Jones says

     October 19, 2022 at 8:07 pm

     Reading this has made for the most entertaining and informative evening in a long time! The big takeaway is that there is a lack of communication, esp for older people who don’t get online! I would never have known about the possible increased Medicare premium if it hadn’t been for my sister. Then found this article while looking online and was able to get lots more information! So now trying to juggle to keep income under the threshold!

     Reply

     • Terry says

       October 19, 2022 at 8:49 pm

       I agree. I found this site a few years ago and the information provided here is invaluable.

315. Bev Lolr says

     October 20, 2022 at 8:22 am

     Having the 3.8% extra tax on investment income over $250,000 adds another layer of confusion to me in figuring IRMAA.

     Reply

     • Tom P says

       October 20, 2022 at 2:22 pm

       Bev, the 3.8% tax on investment income is not part of your Modified Adjusted Gross Income (MAGI) calculation so it has no effect on IRMMA. MAGI includes your AGI plus any Tax-Exempt Interest.

316. Mary says

     October 20, 2022 at 12:04 pm

     I just found this site and its been helpful. I have been using some of my IRA required minimum distributions (RMD) to make direct donor charitable contributions that I would have donated anyway. I still have IRMMA , but stay out of the top tiers and higher tax brackets. Just be sure to follow Direct Donor regulations. Its not a break-even process though.

     Reply

317. Bev Lolr says

     October 20, 2022 at 7:16 pm

     Tom, thank you for your help. I understand the 3.8% does not affect IRMAA. It does make one pay more in taxes along with the IRMAA hit. Staying under $250,000 even if tier is projected to be $256,000 MFJ with 5% inflation seems safer. I always learn something on this site. BTW, I never liked math or algebra so these amazing calculations are over my head.

     Reply

     • Jeff Enders says

       October 23, 2022 at 12:44 pm

       and remember, the 3.8% is only on the divends/ capital gains / interest that is over $250,000.

       If you have more than $6,000 of these income types and your AGI is $256,000, you tax is 3.8% times $6,000 or $228.

       if you have less than $6,000 of these income types and your AGI is $256,000, your tax is the total of these income types times 3.8%, so somthing less than $228.

     • Jeff Enders says

       October 23, 2022 at 12:52 pm

       also, my approach is to determine the a) highest marginal ordinary tax bracket I am willing to pay and 2) the IRMAA tier I am willing to pay. Then I target my 2022 MAGI that yields the lower of the two. The NIIT 3.8% tax is the tail of this dog as is any state income tax.

     • Steve says

       November 18, 2022 at 4:34 pm

       Thanks for all of this great info and, I have a question. My wife and I are turning 65 at the end of this year and we got IRMAA notifications today for our 2023 premiums based on our 2021 tax returns. Our letter said we are in the second IRMAA bracket. I stopped working in 2021 and I can get a determination to put us in the lowest bracket based on the 2021 return. However, our 2022 income reported to the IRS in 2023 is likely to be in that higher bracket because of a one time capital gain. Will they look back when they get out 2022 return and re-increase our IRMAA for all of 2023?
       Thanks.

     • Harry Sit says

       November 18, 2022 at 11:42 pm

       The SSA-44 form asks for the date of the life-changing event (2021 in your case) and your income in the next two years (2022 and 2023). Just fill out the form truthfully with the income from your one-time capital gain in 2022.

     • Steve R says

       November 19, 2022 at 1:18 pm

       Thanks Harry,
       When do you think we should file the SSA-44? Any advantages/disadvantages to filing now with a rough idea of our 2022 income vs. early January when I’ll have a good idea of our 2022 income vs. mid-April when we will have the 1040 available.
       Thanks, Steve

     • Tom P says

       November 19, 2022 at 7:52 pm

       Steve, I’m not following why you think filing an SSA-44 form will reduce your IRMAA for 2023. From what you said, the SSA sent you a letter that said your 2021 income puts you into the 2nd tier for 2023, but you also said you quit working in 2021. That’s fine, but if your income wasn’t actually reduced that year, I’m confused why you think filing the SSA-44 form will help.

       However, what I think you could benefit from is filing the SSA-44 for 2024, when your income will (I assume) be reduced due to work stoppage in 2021. That way, any IRMAA associated with 2024 will be based on the actual or projected income for 2024, not 2022 when you had the capital gain.

       In many cases it’s best to call your local SSA office and discuss. We had to do that after we filed our SSA-44 and didn’t get the expected results.

       Hang in there, it can be frustrating.

     • Steve R says

       November 22, 2022 at 10:53 am

       Hi Tom,
       Thanks for your reply and indeed, it is frustrating and very hard to comprehend. I have talked with people at Medicare twice, and still have no idea about the concepts, rules and even the process involved. In the last call the other day, the person said I am not actually appealing, rather I am asking for reconsideration. So, let me start with what I thought was a common sense example and then get more specific for my case.

       Someone retires in October 2021 after making $50,000 in wages that year. He and his spouse had $150,000 in other income for a total of $200,000 MAGI on the 2021 tax return. He and his spouse just got a letter that they are in level 1 (for lack of better term) IRMAA for 2023. Since work stoppage is one of the allowed life-changing events, it makes sense that he and his spouse would file for a reconsideration (or is it an appeal?) indicating that he is no longer working and their 2023 income is likely to be $150,000 and so shouldn’t have to pay IRMAA for 2023. Is this too simplistic? Does 2022 income or the 2022 tax return have anything to do with the reconsideration/appeal in this case? I’m just trying to wrap my head around some of the basics here.

       Our case:
       My wife just turned 65 and I am turning 65 next month so this is our first go round with IRMAA. We just received our IRMAA letters saying we are in level 2 IRMAA for 2023 based on our 2021 tax return. I retired in June 2021 and had enough wages in 2021 that if that amount were not included, we would drop one IRMAA level. However, in 2022, one of the stocks we own was bought out for cash resulting in an unexpected one-time capital gain (which I see is explicitly excluded as an acceptable life-changing event). That gain would keep us in level 2 IRMAA if somehow 2022 income were germaine. In 2023, hopefully without an unexpected capital gain, we will be in level 1 IRMAA. Do we have a path to have our IRMAA reduced for 2023?

     • Harry Sit says

       November 22, 2022 at 11:11 am

       The form is simple enough. It doesn’t matter in which month you file it. If they deny it for 2023, you will file it again next year for 2024.

     • Tom P says

       November 22, 2022 at 7:46 pm

       Steve, I would file the SSA-44 now and input your expected 2023 income. If things don’t get straightened out before your 2023 SS payment the SSA will refund what they owe you when it’s all settled. That happened to us. Based on your 2022 income you will have to pay IRMAA in 2024.

     • Steve R says

       November 23, 2022 at 11:34 am

       Thanks, Harry and Tom, I appreciate it.

318. James Abbott says

     October 24, 2022 at 9:13 pm

     My income for 2020 and 2021 was over the IRMAA limits, but I never got a letter from social Security telling me this. Since I mail in paper returns, I am guessing that the IRS was/is still so far behind that they have not processed my 2 most recent returns. When they eventually get around to doing this are they going to send me a lump sum bill?

     Reply

     • The Wizard says

       October 25, 2022 at 3:11 am

       You should be getting a letter in late November detailing your SS and Medicare monthly amounts for 2023 based on your MAGI from your 2021 tax return.
       No idea if they will bill you for 2022 IRMAA in arrears after they process your 2020 return. It could be exciting…

     • Tom P says

       October 25, 2022 at 10:12 am

       James, login to your SS account (you do have an online login, correct? If not, get one!) and check your Benefits and Payments, which will include your SS payments and Medicare deductions.

319. Keith says

     October 24, 2022 at 9:48 pm

     1. Have you checked to see if they processed your 2020 and 2021 tax return? I’m speaking about processing the tax returns, not the IRMAA bill.

     2.Maybe they already have been billing your for IRMAA surcharge. Have you checked your monthly social security check or direct deposit amount to see if the amount reflects your gross social security amount minus your medicare payment amount or gross social security amount minus your medicare payment amount plus IRMAA surcharge?

     Reply

320. James Abbott says

     October 25, 2022 at 1:24 pm

     Medicare A & B cost is 170.1, no IRMAA, in fact, they miscalculated my monthly payment and this month sent an extra $48.00!! Yes, know about the IRMAA letter that is supposed to show up in November. After entering retirement I successfully appealed the IRMAA letter for 2 years in a row as my income fell so much after I stopped working full time. Without getting into the IRS COVID tax snafu, and the amended returns I am working on for 2020 & 2021, I am just trying to figure out how Social Security handles it when the make the mistake, and then send me an IRMAA letter 2 years late!

     Reply

321. Andrew Morris says

     November 24, 2022 at 11:23 am

     Can you define MAGI as it relates to IRMAA – specifically what gets added back to AGI to determine MAGI.

     I keep reading that tax exempt interest (e.g. interest from Municipal Bonds) is added back from to AGI to calculate MAGI but then I read (on some web sites) the list of items added back to AGI and tax-exempt interest is not included.

     From the Social Security Handbook (Notice the last revised Feb 1, 2008):
     2501.
     What is Modified Adjusted Gross Income (MAGI)?
     Modified Adjusted Gross Income is the sum of:
     The beneficiary’s adjusted gross income (AGI) (last line of page 1 of the IRS Form 1040 (U.S. Individual Income Tax Return)), plus
     Tax-exempt interest income (line 8b of IRS Form 1040)

     2501.1
     How Is MAGI Used?
     MAGI is used to determine if an Income-Related Monthly Adjustment Amount (IRMAA) applies. It is provided by IRS and is generally information that is two years prior (but not more than 3 years prior) to the year for which the premium is being determined. We will use the appropriate sliding scale table (�2503) to determine the IRMAA.

     Last Revised: Feb. 1, 2008
     ——————————————————————————————-
     From a non-IRS web site called IRS.com (a privately owned website that is not affiliated with any government agencies):
     Deductions Not Applicable to MAGI
     Your MAGI is determined by taking your AGI and “adding back” certain deductions. These are items which can be subtracted from your AGI, but must be included in the calculation of your MAGI:

     • ½ of self-employment tax (self-employed individuals are required to pay “payroll” taxes that an employer would otherwise take; these extra taxes can be deducted from AGI, but are included in MAGI)
     • Student loan interest
     • Tuition and fees deduction
     • Qualified tuition expenses
     • Passive income or loss
     • Rental losses
     • IRA contributions and taxable Social Security payments
     • Exclusion for income from U.S. savings bonds
     • Exclusion for adoption expenses (under 137)

     For me the following would apply to my calculation of MAGI:
     1/2 of self employment tax
     tax exempt income

     But I’d like to get accurate information as to how MAGI is calculated in regard to IRMAA and I haven’t been able to find a consistent source of that information.

     Are there different flavors of MAGI as it applies to IRA contribution limits versus as it applies to IRMAA? Or is there only one MAGI?

     And one last question:
     Are contributions to a Solo 401k added back to AGI for calculating MAGI in regard to IRMAA?

     Reply

     • GeezerGeek says

       November 24, 2022 at 2:11 pm

       What is confusing is that there is more than one definition of MAGI and which definition is used is dependent upon what it applies to. The definition quoted in the first part of your email is the MAGI that is used IRMAA: “The beneficiary’s adjusted gross income (AGI) (last line of page 1 of the IRS Form 1040 (U.S. Individual Income Tax Return)), plus
       Tax-exempt interest income (line 8b of IRS Form 1040)”

     • Jeff Enders says

       November 27, 2022 at 2:13 pm

       this may be the best source of the definition of MAGI in this case. it also explains the difference calculation of MAGI for a variety of federal medical programs

       https://sgp.fas.org/crs/misc/R43861.pdf

       it was written in 2018…..

     • Jeff Enders says

       November 27, 2022 at 2:16 pm

       another source, probably more definitive:

       https://www.ssa.gov/OP_Home/handbook/handbook.25/handbook-2501.html

322. The Wizard says

     November 24, 2022 at 2:31 pm

     Once you’re familiar with IRMAA details, that particular MAGI is very simple to understand…

     Reply

323. John EP says

     December 3, 2022 at 12:56 pm

     I am planning to do Roth conversion in 2022 up to near the maximum for tier 1 of IRMAA, which for joint returns in $246k MAGI in 2023. IRMAA in 2024 (for 2022 returns) is unknown but will likely go up if we have inflation. It will only drop if there is negative inflation which is rare. I want to be sure to stay in the first IRMAA tier. What is a relatively safe MAGI for that?
     I am thinking around $235k.

     Reply

324. Jane J says

     December 3, 2022 at 3:16 pm

     I was in the same position in 2021 and kept our MFJ IRMAA MAGI just below $242k. As it turns out I could have gone $4k higher. But I was happy we didn’t go over the cliff into the next band. If it were me I would go to at least $246k this year. Of course, there is always the risk that extra bits of unexpected investment income will trickle in right up to the end of December. I made a conservative guess in early December making the bulk of the Roth conversion then (some had already been done earlier in the year) and then ‘trued up’ within a few days of the end of the year.

     Reply

325. Jim M says

     December 3, 2022 at 3:46 pm

     $235,000 seems safe but too low for me.

     For 2022 MAGI Income (2024 Medicare Premium) the bottom of the first IRMAA bracket for Married Filing Jointly is estimated to be $256,000 assuming 0% annualized inflation from November 2022 through August 2023. This is up from $254,000 a month or two ago. The estimate is $260,000 if inflation is 5% annualized from November 2022 through August 2023.

     The November 2022 CPI inflation data should be published before year end. That will leave 9 months (December 2022 through August 2023) of going forward inflation to guess before 2022 year end.

     I expect the inflation rate to slow but it seems unlikely that it would fall to zero or less in the next 9-10 months. Staying below $250,000 AGI avoids the 3.8% surcharge on net investment income.

     Reply

     • Jeff Enders says

       December 4, 2022 at 4:13 am

       The 3.8% is only on investment income and only on the part that is above $250,000 of AGI ($200,000 for a single filing return). So if your non-investment income is let’s say $216,000 and your investment income (interest, dividends, capital gains) is let’s say $37,000, then the 3.8% is only on $3,000.

326. Jim M says

     December 3, 2022 at 8:28 pm

     Correction: I meant to say “top”.

     For 2022 MAGI Income (2024 Medicare Premium) the top of the first IRMAA income bracket for Married Filing Jointly is estimated to be $256,000 assuming 0% annualized inflation from November 2022 through August 2023. This is up from $254,000 a month or two ago. The estimate is $260,000 if inflation is 5% annualized from November 2022 through August 2023.

     Reply

327. Ken W says

     December 7, 2022 at 7:16 pm

     Questions about 2024 IRMMA brackets:
     Hi all, We are a retired CSRS couple who file jointly. Questions: 1. What is the last day we can make supplemental thrift plan distributions in December 2022 to ourselves that shows up in 2022 income? Is it 12/28/22?____________ 2. The 2022 income estimate affecting 2024 IRMMA for couples filing jointly is $204,000 (as shown above assuming 0% inflation), $208,000 ( as shown above assuming 5% inflation). But inflation is obviously higher this year. What is a conservative estimate of the actual limit of 2022 income to prevent IRMMA in 2024 considering the higher inflation this year___________ ?
     3. I will attain age 72 in August of 2024 and my wife in November of 2024 . We understand that RMD distributions will start in the year we attain age 72, and might make supplemental Thrift plan distributions trickier. So far, except for one year, when we did not pay close enough attention, we have avoided IRMMA, but we may not be so fortunate when the RMDS start. Any recommendations?

     Reply

     • Jeff Enders says

       December 8, 2022 at 5:40 am

       1) check with your thift plan
       2) the conservative plan is using the 0% factor – that is why is it provided with the caveot that if inflation goes negative (it can happen!), the conservative limit could be less than $204k. Remember, that of the 12 months used to calculate the limit for 2024, 2 months are already ‘baked in’ and is incorporated in the $204k-$208k range; a 3rd datapoint will be available before December 31st.
       3) this is the whole problem with attempting to avoid IRMAA – once SS and RMDs kick in, that income stream is ‘locked in’, making it more difficult to avoid. You may just have to accept the first tier of IRMAA and enjoy life…… (and remember as you age, RMDs continue to increase)

328. barb H says

     December 10, 2022 at 9:21 pm

     I don’t like but can live with higher part b payments. What I think is crazy is the stepping stone aspect of it along with needing a crystal ball to guess what size and where the steps will be. Each of the first 3 steps have the same tax/magi-amount-in-the-step so has anyone thought to just make the tax a straight percentage of the magi amount that is above a certain line with an upper cap? That would eliminate the stepping stones. It would make the tax payers’ lives much less stressful and would not be any harder for Uncle Sam to calculate.

     Reply

329. Ed Fogle says

     December 10, 2022 at 9:25 pm

     Sorry, it’s been suggested but makes too much sense. It wouldn’t be ridiculous enough for the bureaucratic brain.

     Reply

330. Bev says

     December 10, 2022 at 10:52 pm

     Can someone explain what the 101,501 is representative of for the IRMAA calculation referenced in post 310? Thank you.

     Reply

     • Harry Sit says

       December 11, 2022 at 6:40 am

       101,501 is the lowest integer number that rounds up to the nearest 1,000 to 102,000. Inflation must push the number to at least $101,501 before rounding for the threshold to hit $102,000 after rounding.

331. Ken W says

     December 12, 2022 at 11:57 pm

     Hi Jeff Enders, Thank you for your sound advice.
     Yes, you are right I checked with the AARP calculator and RMDS keep rising for at least 20 years, more than we will likely still be around.. We might avoid IRMMA for a couple of years but first tier seems inevitable.
     However, I just just learned that selling ones house, even with the exclusions for home ownership for over 2 years, can result in some very significant IRMMA. We are getting older and we have been giving a great deal more thought to downsizing and moving to something more manageable. I knew we would likely have to pay capital gains taxes on the sale of our house but I was not expecting very significant IRMMA, two years later as a result of that sale.

     Ken W

     Reply

332. Guy says

     December 13, 2022 at 6:44 am

     Opened my mail from SSA dated December 7, 2022, and big surprise. Got a retroactive bill for IRMAA covering the 2022 year. It seems that the IRS did not have the 2020 MAGI tax numbers and SSA used the ones available for 2019 to figure the IRMAA for 2022. It sucks as it around the Holidays.

     Reply

333. Harry Sit says

     December 13, 2022 at 6:48 am

     The last inflation number before the end of 2022 came out this morning. It was negative month-to-month. I updated the 2024 brackets with 0% and 5% inflation assumptions accordingly. Scroll up to the main post to see the updated numbers.

     Reply

     • RobI says

       December 13, 2022 at 7:29 am

       Thanks. Looks like monthly a CPI drop of -0.1% in Nov (led by energy costs) was just enough to move the 2022 first IRMAA bracket (married joint) down from $204000, to $202,000. Its right on the edge, so it would take a big drop in prices to fall for the bracket to below $202k. I’m taking your current table as the target for 2022 income.

     • Terry says

       December 13, 2022 at 7:52 am

       I am seeing a rise of 0.1% month to month in CPI. Am I looking at the wrong number?

     • RobI says

       December 13, 2022 at 9:04 am

       Unadjusted for seasonality it fell 0.1%, and the adjusted number went up 0.1%

       Not sure which one is used for the IRMAA calculation

     • Tom P says

       December 13, 2022 at 10:15 am

       You can look at these tables for the numbers:
       Monthly:
       https://www.bls.gov/news.release/cpi.t01.htm
       Historical:
       https://www.bls.gov/regions/mid-tlantic/data/consumerpriceindexhistorical_us_table.htm

       To me, it’s the year-over-year numbers that matter. If we assume that number drops by ~0.5% per month through August 2023 the year-over-year would be down to 2.5% in August assuming December 2022 drops from 7.1% to 6.5%, January to 6.0%, etc.

       Plugging these numbers into the equation yields a MFJ number of $206,000 for 2024. I’m hoping it’s at least $204,000 as I got blind-sided by a change in how PayPal reports payments, and that is going to put me just over $202,000 for the year.

334. Vince says

     December 13, 2022 at 7:29 am

     Thanks Harry for all the work you do throughout the year.
     Inflation figures are confusing because the built in affects of price increases are painful even with declining Inflation.

     Reply

335. Dave Ganser says

     December 13, 2022 at 9:50 am

     I have a question regarding methodology to estimate 2024, based on partial 2022/2023 CPI data. The relevant section of article makes the statement: “If inflation is 0% from December 2022 through August 2023, these will be the 2024 numbers:”

     It appears to me a clearer statement would be: “If inflation from December 2022 through August 2023 remains at the November 2022, these will be the 2024 numbers.”

     My reasoning is with November 2022 inflation at 7.1%, your estimated IRMAA numbers for the ‘0% inflation’ case are correct only if inflation Dec 2022 through August 2023 remains at 7.1%, not zero.

     Am I correct or an I missing something?

     Reply

     • Paul says

       December 13, 2022 at 10:19 am

       Dave, the projection is zero inflation for the remainder of the year of measurement (Sept thru Aug), i.e. no further change in the CPI. There is already some increase baked into the projection, from September until now.

     • Harry Sit says

       December 13, 2022 at 5:18 pm

       The 7.1% is looking backward. November 2022 CPI number was 7.1% higher than November 2021 CPI number. We’re looking forward. How will CPI numbers increase from the current level in the upcoming months? 0% inflation means the CPI number in each of the following months will be exactly the same as the latest CPI number. 5% inflation means the CPI number in each of the following months will increase slightly above 0.4% over the previous month.

336. Jeff Enders says

     December 13, 2022 at 2:50 pm

     Ken W – while it may not be a panacea, think of your IRMAA as no different, it’s just the capital gains rate is higher than 15%.

     Capital Gains on house sale is: Selling price LESS sales expenses (which includes any sales commission) LESS what you originally paid for it LESS all the improvements while you owned it.

     Then less $500,000 exclusion (assuming joint filing status and lived in the home at least 2 of the last 5 years) to determine what is taxable.

     Also, if your reported income in that year exceeds $250,000, there is an NIIT tax of 3.8% on the lesser of a) capital gains+ dividends + interest or b) total reported income – $250,000

     Reply

337. Allan says

     December 14, 2022 at 6:38 am

     -If the next nine CPI numbers come in at -0.1%, does the $256K number for married couples stay at $256K or will it move down to $255K or $254K?

     -How about if the next nine CPI numbers come in at -0.2%, what does that do to the $256K number for married couples?

     Reply

     • Harry Sit says

       December 14, 2022 at 8:04 am

       -0.1% or -0.2% every month for the next nine months will knock it down to $254,000. It can’t be $255,000 because it’s in $2,000 increments for married filing jointly.

338. Bill says

     December 16, 2022 at 12:37 pm

     If the CPI is widly negitive for the remainder of the year, can the 2024 number go below the final 2023 number? Just trying to leave myself some margin of error.

     Reply

     • Tom P says

       December 16, 2022 at 2:23 pm

       Bill, if the CPI-U stays at the November number, 297.711 through August 2023 that would mean that year-to-year inflation would be down to 0.52% by next August. Does anyone see that happening? Don’t think so since the Fed is planning to keep rates high through 2023.

       If you really want to be on the safe side a single income of $100K ($200K MFJ) would be very conservative IMO since a fixed CPI-U of 297.11 through August still yields $101K ($202K).

339. RobI says

     December 16, 2022 at 2:50 pm

     Bill
     By my estimate is that the $100k level would only be reached if the average monthly inflation until August was -0.3% EVERY month making it -2.1% YtY vs August 2023. Highly unlikely in my view.

     Reply

340. Bob W says

     December 22, 2022 at 8:32 am

     Is there a reliable estimate for IRMAA brackets for 2025 based on 2023 income?
     Next year (2023) I must take my first RMD from my IRA and I want to try to guess how much I should give to a qualified charity via a QCD and how much I can receive myself to avoid Medicare surcharges.

     Reply

     • Jeff Enders says

       December 24, 2022 at 11:54 am

       Assuming no inflation, which is the conservative approach, then the number posted for 2022/2024 can be used to determine the MINIMUM IRMAA tier levels. Determining RMD can’t occur until after the first of the year since that requires the 12/31/22 IRA balance.

       What year were you born? Secure Act 2.0 passed by Congress as part of spending bill this week, changes first year of RMD to 73 years old effective 1/1/23. Born in 1950, first RMD requirement is 2022 (or no later than April 1, 2023) which is no change, but if born in 1951, first RMD requirement is 2024 (or not later than April 1, 2025). That could change things for you if you are a 1951 baby.

341. GeezerGeek says

     December 22, 2022 at 8:49 am

     Any IRMAA estimate will become more accurate as more monthly cost of living data is available. The last monthly COLA data that be available in 2023 will be published on 12/12/2023. I would wait until then to determine the amount of the charitable contribution. However, I’ve read that setting up a charitable from a IRA account can take several days, maybe weeks, so I would work on the logistics of the transfer before then.

     Reply

342. GeezerGeek says

     December 26, 2022 at 12:23 pm

     Just a few thoughts about what inflation rate we might expect for projecting the IRMAA brackets for 2022 income (2024 IRMAA adjustments).

     1. Although there was a drop in the CPI from October to November, it is unusual for the annual inflation rate to be negative. The last time the U.S. had a negative annual inflation rate was in 2009 (-0.4%) during the Great Recession. Prior to that, the last negative annual inflation rate was in 1955 (-0.4%).
     2. You also have to consider the dynamics of the inflation rate. The biggest year over year drop in the annual inflation rate was also in 2009, when the inflation rate dropped from 3.8% in 2008 to -0.4% in 2009, a absolute change of -4.2%.

     We don’t have the inflation data for December yet, but the annual inflation rate for 2022 will probably be at least 7%. If there was an absolute drop of 4% in the annual inflation rate, the inflation rate for 2023 would be 3%.

     That said, I think that assuming an annual inflation rate of 3% for 2023 is a very conservative estimate. Since many are anticipating a recession in 2023 and the economy is presently in a slump, I don’t think that we can expect in 2023 anything similar to the drops in the inflation rate that we saw during the Great Recession.

     Reply

343. MMP says

     December 27, 2022 at 10:05 am

     Harry, I just wanted to thank you for maintaining this website. Obviously many of us are kind of in the woods here trying to determine how to calculate our income for the current year in order to not be penalized for it two years later. How ridiculous is it that we have to do this!
     While you give good calculations (and some of your readers are more interested in reproducing the calculations than others), for now I’ll rely on your numbers, more or less, and go from there.
     It’s telling to me that whenever I look up this topic, your website is the most frequently referred to.
     Once my other end-of-the-year tasks settle, I’m going to review some of your other topics in order to receive more good un-biased information in plain English.
     Thanks again Harry and Happy New Year!

     Reply

344. Don says

     December 27, 2022 at 8:02 pm

     Great article. This is the only link I found offering definitive do-it-yourself info about the process and inflation timing Medicare uses to calculate income targets. Thank you so much for publishing this.
     Please note that the 2024 assumptions should be adjusted or relabeled. (I recommend relabeling – I prefer to use the income levels as posted.) The 0% assumption uses a ~4% annualized inflation rate from Dec. ’22 – Aug. ’23. The 5% assumption uses a ~6.5% annualized inflation rate from Dec. ’22 – Aug. ’23.

     Reply

     • Terry says

       December 27, 2022 at 9:18 pm

       I am no expert on this (far from it), but the description for the 2024 0% assumption states that it is based on prices staying flat at the latest level. How does that equate to a 4% inflation rate from Dec 22 – Aug 23? I am confused.

     • Harry Sit says

       December 28, 2022 at 12:15 am

       Please see replies to comment #335. Different people seem to see inflation in different ways. Some people look forward – how much will prices go up from today? Some people look backward – how much will prices have gone up from a year ago? It’s just different ways of looking at things.

       I use the forward view. If prices freeze at today’s level through August 2023, that’s 0% inflation to me. To people looking backward, flat prices from the latest number would be 6.8% higher than a year ago in December, 5.9% higher than a year ago in January, …, all the way down to 0.5% higher than a year ago in August 2023. The forward-looking way is more straightforward to me but the backward-looking way matches news headlines.

       I’ll continue to use the forward-looking view. 0% inflation means flat prices from the latest CPI number. 5% annualized inflation means a steady increase of about 0.4% every month from the latest CPI number. The backward-looking numbers will be different.

     • Paul says

       December 28, 2022 at 8:29 am

       Don, the IRMAA calculation is based on a specific period: the average CPI from September to August in each year. That is compared to the average CPI from Sept-2017 to Aug-2018.

       For the period ending Aug-2023, we already know the CPI for 3 months (Sept, Oct, and Nov of 2022). Those won’t change. The unknown: what will be the CPI in each of the remaining 9 months (Dec-2022 thru Aug-2023)?

       There’s no point in looking backward, as those CPI’s are already published. The question is how the CPI will change in the next 9 months. Harry projects the IRMAA thresholds if the CPI does not change, as that is likely the lowest possible values. That’s a 0% increase, independent of how much it has increased in the past 3 months.

       If the CPI increases at an annualized rate of 5% for the remaining 9 months in this period, that’s about 0.41% each month (the exact calculation is a bit more complex than dividing by 12, due to compounding), or about 3.7% over the next 9 months. But, that is looking forward, and independent of what happened in the past 3 months.

345. Gary says

     December 28, 2022 at 9:55 am

     The BLS is changing the CPI calculation method in January, 2023. Any thoughts on how this will affect the IRMAA brackets for 2024?
     “Starting with January 2023 data, the BLS plans to update weights annually for the Consumer Price Index based on a single calendar year of data, using consumer expenditure data from 2021. This reflects a change from prior practice of updating weights biennially using two years of expenditure data.”

     Reply

346. BJ says

     January 12, 2023 at 10:07 am

     I’ve worked the recent CPI-U numbers and been able to verify (I think) how Harry comes up with the $101,000 IRRMA income number using 0% base inflation for the remainder of the 2024 IRRMA calculation period. My number was $101.263.25.
     Monthly inflation change for Dec to Nov was -0.1%, annualized inflation change was -0.6% (7.1 to 6.5%), CPI-U change was from 297.711 to 296.797.
     I am trying to estimate the 2024 IRRMA using negative monthly inflation (say -0.1% or – 0.2% per month) and need to know how to estimate the CPI-U when this happens.

     Reply

     • GeezerGeek says

       January 12, 2023 at 11:16 am

       BJ, Having a negative annual inflation rate is very unusual. That has happened only twice in the last 70 years. In 2009, during the great recession, the annual inflation rate was -0.4% and in 1955, the annual inflation rate was also -0.4%. Assuming a negative monthly inflation of -0.1% would result in an annual inflation of almost -1.2%, which is almost 3 times the highest deflation rate of the last seventy years.

       We also have to consider the dynamics of change. It would be very unusual for a year of historically high inflation to be followed by a year of historically low inflation.

       Of course, no one knows what extreme events can happen in the coming year, but I’m thinking that an inflation rate of 2% is a conservative estimate of the lowest inflation rate that we expect for 2023. If inflation did drop that much from 2022 to 2023, it would be the largest year over year drop in the inflation rate that the US has ever experienced in the last 70 years.

347. Paul says

     January 12, 2023 at 10:24 am

     BJ, the key is to use the actual CPI values, not the annualized percentage rate. That’s how the law specifies the calculations, and how Harry does the calculations.

     If you scroll back through the history of comments, you’ll find a post that explains it. Look for post #164 by me.

     Reply

     • BJ says

       January 12, 2023 at 2:15 pm

       I used the actual annualized CPI-U numbers and did my estimate calculation like Harry recommends (no change in CPI-U for Jan-Aug 2023) and came up with $101,263 or $101,000 rounded for 0% inflation through Aug 2023. I’m trying to estimate the CPI-U number for Jan if there is a 0.1% monthly inflation decrease so I can determine its effect on the annualized CPI-U. The CPU-I number will go down, question is how much. I don’t you can multiply the CPU-I by 0.999 (a 0.1 % decrease) as one is an annulized number and the other a monthly.

348. Jeff Enders says

     January 12, 2023 at 12:48 pm

     BJ – take the CPI-U value from December of 296.797 by .999 to get an estimate for January (296.5) then multiple THAT number by .999 to get February and keep going. That is a .1% drop (1-.001= .999) each month.

     Reply

     • Tom P says

       January 12, 2023 at 4:03 pm

       If you multiply each previous month’s CPI-U by 0.999 that will result in vastly underestimating inflation and will result in negative year over year results for several months. That’s not going to happen.

       My approach was to pick an amount the CPI-U might drop each month. I chose 0.006, which resulted in an estimated rate for December of 6.5%. The actual was 6.45%. Doing the same for each following month brings inflation down to 1.7% by August, which seems unrealistic, but that still pushes the Sep-Aug average high enough to bump the MFJ to $204,000. Holding the value at the current 296.797 is also unrealistic as that brings inflation down to 0.0021% by August.

       As usual, YMMV.

     • Tom P says

       January 12, 2023 at 5:26 pm

       Sorry, my last percentage should be 0.21%.

     • Jeff Enders says

       January 12, 2023 at 6:00 pm

       Tom P – while I agree with your that it is ‘unlikely’ to happen (and I can’t guarentee is CAN’T happen)l what the OP asked was simply how to calculate a .1% deflation each month for the rest of the year. My response to THAT question remains multiply each value by .999, which is 1-.1%, for each month remaining in th year.

349. Dale T says

     January 28, 2023 at 2:21 pm

     The 127,000 figure for the Single 1.4 bracket for 2024 seems incorrect. My calculation after the Dec 2022 CPI comes out to $127,625. (Thank you post #164!). Rounded to $128,000. Correct?

     Reply

     • RobI says

       January 28, 2023 at 5:51 pm

       I think one difference may be an adding in an assumed CPI rate for the remaining 8 months. Using Tom Ps’ great Excel model, I looked ahead and added the same 296.797 Dec 22 CPI number for each of the months Jan to Aug 2023, then recalculated the 12 month average (this reflects zero monthly inflation).

       This makes the 1.4x number come out at $127,472. (I’m not up on the official calculation methodology, but it appears rounding down to nearest 1000 may come into play in this case).

       (That stated, there is good chance your higher number will be ok since zero monthly inflation for rest until August 2023 is pretty conservative as it also implies annual inflation rate falls below 3% by April!)

     • Jeff Enders says

       January 31, 2023 at 6:48 am

       I get the same result as RobL – $127,472 and since the result is rounded to the nearest $1000, the result is $127,000

350. Tom P says

     January 28, 2023 at 3:16 pm

     FWIW, I get the same $128,000.

     Reply

351. Sara Holt says

     January 31, 2023 at 12:42 pm

     I think you may have a type-O under the – 5% Inflation Assumption for 2025 – heading. I think you meant to say “……. January 2023 through August 2023 …..”, not August 2024.

     Reply

     • Harry Sit says

       January 31, 2023 at 2:43 pm

       Not a typo. 2025 brackets need inflation data through August 2024.

352. RobI says

     February 13, 2023 at 7:56 pm

     Harry
     Have you written anything on potential if tax rates increase, tax bands are reset and higher standard deduction all expire in Dec 2025. It could impact IRMAA planning. Most of what I’ve found online financial advice surrounds things like accelerated Roth conversions, but seems to ignore retirees and the impact of higher IRMAA bands.

     I’m looking at the tradeoff of taking higher income in 2023-25, while accepting the 40% uplift on IRMAA costs in those years in order to reduce effects of potentially higher taxes in 2026 onwards.

     My quick calculation shows its potentially worth taking a higher IRMAA hit now?
     Appreciate any thoughts

     Reply

     • GeezerGeek says

       February 13, 2023 at 8:27 pm

       Robl, last year, I came to the same conclusion: Take the IRMAA hit now before the Trump tax cuts expire. I increased my Roth conversion to what I hope to be the upper limit of the first IRMAA bracket (1.4). I am planning to do the same this year. Prior to last year, I limited the Roth conversions so that I would stay below the IRMAA threshold. I now think that might have been a mistake.
       The other thing that drove my decision was the dip the market took last October. The best time to do a Roth conversion is when the market is down so that when the market comes back, the gain is in the Roth instead of the conventional IRA.
       If we do have a major recession this year, that would be a great opportunity for another big conversion. I feel kind of bad about hoping for a recession because I know the pain that a recession will cause so many others. I don’t think the tax savings opportunity that a recession would give me is worth all the pain that a recession would cause others but if it happens, I’d be a fool not to take advantage of it.

     • GeezerGeek says

       February 13, 2023 at 8:42 pm

       Robl, One more thing: Although I thought that moving my income above the IRMAA threshold made sense for me, I think that it may not be the best thing for everyone. I’ve been very fortunate financially and I would afford to pay the taxes for the conversion with ordinary income. That are several factors one must consider before you can determine if such a move makes sense. It sounds like you have done the math, like I did. Everyone else needs to do the math to determine if such a move is good for them.

     • Harry Sit says

       February 14, 2023 at 7:16 am

       Rob – To be clear, the expiration of the Trump tax cuts in 2026 doesn’t affect how much income will put you in which IRMAA tier, which is the main topic of this post.

       The factors you mentioned affect how much Roth conversion you’ll want to do while accepting a higher IRMAA surcharge. I wrote about a tool that aids in that decision in Roth Conversion with Social Security and Medicare IRMAA. The tool displays a chart of the tax rate you’ll pay on incremental Roth conversions, including the effect on IRMAA. You can compare that chart with the anticipated post-2025 tax rates and decide where to stop in your Roth conversion. Let’s move the discussion on Roth conversion in general to that post and keep this one narrowly focused on IRMAA itself.

     • RobI says

       February 14, 2023 at 7:47 am

       Thanks Harry. That’s the post I was searching for

353. BurtP says

     February 13, 2023 at 9:50 pm

     Great topic to explore and think about (paying some IRMAA in exchange for lower tax brackets, before the 2025 expiration).
     Another factor to consider is any other credit or rebate one might be interested in using. For example, the Inflation Reduction Act rebates on various home electrification projects. For those persons inclined to such things, one can suppress taxable income and arrive int the rebate range, securing considerable benefit.
     While not for everyone, worth considering.

     Reply

     • The Wizard says

       February 14, 2023 at 3:36 am

       I’ve been paying more than first tier IRMAA since I started Medicare at 65, so will continue using Harry’s projections for my very modest Roth conversions now at age 73 and up.

       When the Trump TCJA(?) tax change went into effect, my marginal federal rate changed from 28% to 24% but the DOLLAR amount of my federal income tax stayed about the same due to the $10,000 deduction limit on state and local (property) taxes.

       If they remove this $10k limit in a few years, I expect my federal tax dollar amount to be similar when tax brackets revert…

     • GeezerGeek says

       February 14, 2023 at 5:59 am

       To The Wizard: In my case, I didn’t lose anything by the change in the cap because I don’t have any local or state taxes. Your situation is a great example of why everyone needs to do the math to see what is the best strategy for them.

     • Terry says

       February 14, 2023 at 3:50 pm

       IRMAA is based on adjusted gross income (actually modified adjusted gross income), not taxable income. Credits wouldn’t affect taxable income anyway, only tax liability.

354. BJ says

     February 14, 2023 at 2:52 am

     I need to confirm the calculation process. The 2024 IRRMA surcharges are based on your 2022 income and the corresponding IRRMA bracket. If I understand it correctly, the 2024 IRRMA brackets are calculated using the Sept 2022 thru Aug 2023 CPI numbers. Is this correct?

     You would think the government would use Jan-Dec 2022 inflation numbers for the 2024 IRRMA bracket calculations. This would make it easier to determine Roth conversions and lower the chances of exceeding your desired IRRMA income bracket…..

     Reply

     • Jeff Enders says

       February 15, 2023 at 4:01 am

       your understanding is correct

355. Jimdog says

     February 14, 2023 at 3:38 pm

     Harry, thank you much for tracking the upcoming 2024 IRMMA bracket. I see you just updated the numbers slightly upward due to the CPI post today. Looks like it’s 204M now for a married couple, if inflation stays at zero the remainder of the year.

     Reply

356. Steve says

     February 25, 2023 at 9:25 am

     Harry, thanks for the 2025 numbers. Useful for 2023 income tax planning.

     Reply

357. Ros says

     February 25, 2023 at 9:49 am

     I have been stocking up on CD’s and just totaled the interest up with my income for 2023.
     I am at less that $300 below the $102,000 projected for 2023 for a single filing for 2025. I can forget the Roth conversion but wondering if you can foresee a scenario where the $102,00 will be lowered? Will even a slight recession make the number lower?

     Reply

     • Jimdog says

       February 25, 2023 at 1:12 pm

       The 102 figure you mentioned is what the est. 2024 IRMMA bracket is for a single. This will be based on 2022 income, not 2023 income. Do you have your year’s straight?

     • Jeff Enders says

       February 27, 2023 at 10:14 am

       Even if the inflation rate was CONSISTENTLY reported at -.1% for each of the remaining 7 months of the measurement year, the threshold would still be $102,000. Stated the other way, there would have to be deflation of AT LEAST -.1% each month to tip the threshold back down to $101,000.

     • Ros says

       April 30, 2023 at 9:47 am

       Jim Dog
       I do have my years straight. Scroll down further. I have been a widow for many years and single is the bracket that I have to follow. The new rates are now posted at $103,000 up from $102,000 for 2023 income for 2025 premiums at this moment with no inflation. But there still may be a slight downturn or slight inflation and if there is it may change even further before 2025 one way or the other. I am very risk adverse and $102,000 or 103,000 are the figures I will be using and if it goes below and I may choose to close or withdraw a lot from a high interest CD because my CD’s are near the limit for 2 beneficiaries and I will decide in Oct. because I am so close to $102,000 or $103,000 already. I already am not able to make a Roth conversion this year.

358. Ros says

     February 25, 2023 at 1:17 pm

     Jimdog
     copy and pasted from this site.
     0% Inflation Assumption for 2025

     If inflation is 0% from February 2023 through August 2024 (prices staying flat at the latest level), these will be the 2025 numbers:2025 Coverage (2023 Income)
     Standard Single: <= $97,000
     Married Filing Jointly: <= $194,000
     Married Filing Separately <= $97,000 Single: <= $102,000
     Married Filing Jointly: <= $204,000
     Married Filing Separately <= $102,000

     Reply

     • Ed says

       February 26, 2023 at 12:35 pm

       This is confusing. You have Married Filing Jointly down twice with different numbers. Please explain.

359. AnnaC says

     February 26, 2023 at 12:52 pm

     Looks like she copied data from the table ‘0% Inflation Assumptions 2024’ that contains two years of info side by side but did not copy well. The first number is for 2023 Coverage (2021 income) & the second number is for 2024 Coverage (2022 income).

     Scroll to the top of this thread to see the tables being referenced.

     Reply

360. Jimdog says

     February 26, 2023 at 1:38 pm

     I’m a little confused as to why the 2025 IRMMA brackets based on 2023 data, show the same as the 2024 IRMMA brackets.

     Reply

     • Harry Sit says

       February 26, 2023 at 2:46 pm

       The 0% inflation assumption means prices freeze at the latest levels. There hasn’t been much inflation since last September. Naturally the brackets will stay the same when prices stay the same.

361. AnnaC says

     February 26, 2023 at 2:21 pm

     I believe it’s due to assuming 0% inflation / no change. It’s a bit early for 2025 as not data points / only assumptions.
     Harry can verify.

     Reply

362. AnnaC says

     February 26, 2023 at 2:23 pm

     If you look at the 5% assumption chart you will see a change in the numbers.

     Reply

363. Ros says

     February 27, 2023 at 10:36 am

     Thanks Harry.
     I will watch the numbers are through August and I should have a pretty good idea what it will be and will have time to close or withdraw some from a CD to stay below what I hope will be the number. Right now I will be about $400 less than $102,000. Purchased too many CD’s. I do ladder long term Cd’s but it is 2 Roth’s that will mature this year.

     Reply

364. jimdog says

     March 14, 2023 at 1:26 pm

     Anyone have the latest calculation on the single 2024 Irma number as a decimal to see how close we are to rounding up over the est. married est. of 204M? I understand the single number is rounded to the nearest 1M then doubled to calc. the married number.

     Reply

     • Paul says

       March 14, 2023 at 1:30 pm

       Without rounding:

       0% future inflation: $204,270
       5% future inflation: $205,742

     • Jeff Enders says

       March 14, 2023 at 5:45 pm

       take the single number, round and then double. (you can get an incorrect result if you take the single number, double and THEN round).

       Appears if inflation simply averages 3% from February – August, we’ll move from $204,000 to $206,000.

       0% – $102,135; $102,000; $204,000
       2% – $102,435; $102,000; $204,000
       3% – $102,585; $103,000; $206,000
       4% – $102, 737; $103,000; $206,000
       5% – $102,888; $103,000; $206,000

365. Jimdog says

     March 14, 2023 at 6:41 pm

     Thx for that good info. Since we already have the Feb. number. It appears that if it avg. 2 1/2 percent from March to August, it might just barely round to 206M. Would that be a correct assumption? Thanks!

     Reply

366. Tom P says

     March 14, 2023 at 6:52 pm

     I think inflation will average more than 2.5%. February was 6% year-to-year, so next month might drop to 5.5% or maybe not drop at all. Who knows? But if Mar-Aug are all 2.5% year-to-year, we’ll still be at $204,000. However, if the year-to-year rate drops 0.5% each month so we are down to 3% in Aug, the bracket will be $206,000.

     Reply

     • Jeff Enders says

       March 15, 2023 at 4:37 am

       You can’t think of it as ‘year to year’ – it has to be ‘month to month’. the historical inflation is already baked in the IRMAA calcuations – it is only the future inflation that is not in the numbers.

       So if you want to state the “annualized expected inflation from March to August is 2.5%” that works, but that is not the same thing as the “year to year inflation as being 2.5%”. The former implies 6 expected data points; the latter implies 12 data points, six of which duplicate what is already in the IRMAA calcuation.

     • Tom P says

       March 15, 2023 at 5:41 pm

       Jeff, you can think month to month if you want and I’ll do it year to year. What I’m saying is if you drop year to year inflation by 0.5% each month from the 6% we had in Feb, we’ll be down to 3% by August. This gives CPI-U monthly figures from Mar-Aug of 303.317, 303.564, 305.449, 308.163, 306.646, and 305.056 based on the previous year’s known CPI-U. Using these numbers with the 6 we already have yields a single value bracket of $103,000; married of $206,000. If the Feb CPI-U holds steady at 300.840 the results will be $102,000 and $204,000.

     • Terry says

       March 15, 2023 at 5:55 pm

       Tom P, you can do it year to year if you like, but the actual calculation to determine IRMAA uses the month to month CPI numbers.

367. jimdog says

     March 14, 2023 at 7:12 pm

     Thx so much. My income in 22 was just barely under 204M, so I’m sweating it a little bit on IRMMA, ha. Too close for comfort.

     Reply

368. Tom P says

     March 15, 2023 at 7:10 pm

     Terry, obviously IRMAA uses the published monthly data, but if you look up the data at https://www.bls.gov/news.release/cpi.t01.htm the first data point listed other than the current CPI-U is the year to year change, which last month was 6%. It’s listed this way because that’s how the media report the change… and how most consumers understand the data… on a year to year basis. You can’t calculate the current month’s CPI-U from the prior month based on the previous month’s change listed as that’s a rounded number. The ONLY number that matters for IRMAA calculations is the actual monthly CPI-U. All I’m doing is trying to make some kind of projection what the next 6 months might be, and I’m choosing to do it on a year to year basis. Not sure why this is so hard to comprehend. Look at this table, which lists all the historical data and the year to year changes: https://www.bls.gov/regions/mid-atlantic/data/consumerpriceindexhistorical_us_table.htm. I’m just extending that table by adding 5.5, 5.0, etcl down to 3.5 in Aug.

     Reply

     • Jeff Enders says

       March 15, 2023 at 8:35 pm

       Tom – your approach is not hard to comprehend…. the reason i suspect you are getting the ‘push back’ is it not the method this site uses to project the inflation in its 5% forecasts.

       Your approach may be the way the media reports it and most consumers understand it, but it’s not the approach this community has been conditioned to understand.

       This site uses a 5% ANNUALIZED projection over the remaining period of time until August reporting, so it simply uses 5%/12 or .41667 for each remaining month in the measurement year.

       If someone wants to use 3% ANNUALIZED, then the consistent approach to the way this site calculates it would be 3%/12 or .25% increase for each month remaining in the measurement year.

369. Buickman says

     March 18, 2023 at 11:39 am

     First time poster here, but a long time reader of this website. Thank goodness for this website and thanks to its many contributors.

     One thing I don’t understand is how the monthly CPI-U can actually go up in a month when the year-to-year inflation goes down. For example, from January 2023 to February 2023 the CPI-U went up from 299.170 to 300.840 (up by 1.67) when annual inflation went down from 6.4% to 6.0%. I would have thought CPI-U would have also gone down.

     Conversely, from November 2022 to December 2022 when annual inflation went down from 7.1% to 6.5%, the CPI-U also went down from 297.711 to 296.797, which to me seems logical.

     Obviously, there is something I don’t understand. Any help would be appreciated. I am using the Excel model and am trying to run projections for 2022 MAGI /2024 IRMAA. I still have the ability to reduce my 2022 MAGI though an IRA contribution and may have overdone my 2022 Roth conversion. Thanks.

     Reply

     • Paul says

       March 18, 2023 at 2:35 pm

       Buickman,

       The CPI-U is an index that starts at 10 in January, 1914. More recently, it was approximately 100 in July, 1983. As long as the prices that comprise it increase, the CPI-U will increase. CPI-U won’t decrease unless there is deflation (i.e. prices decrease) during the period.

       Further, the annualized inflation rate is based on the change in the CPI over the past 12 months. So, the basis for calculating the inflation rate advances each month, and the rate of change in the CPI 12 months ago will affect the most recent month-to-month change in the annualized inflation rate.

     • Buickman says

       March 18, 2023 at 4:35 pm

       Paul,
       Thanks you for your reply. I think what I’m having trouble understanding is Tom P’s reply above when he indicates that if inflation decreases by .5% per month for the next 6 months the CPI-U monthly figures for Mar-Aug would be 303.317, 303.564, 305.449, 308.163, 306.646, and 305.056. All of these are higher than the 300.840 reported for February.

       So, maybe what I’m missing is that this still represents inflation, albeit at a decreasing level, and not deflation from a CPI-U perspective. I tend to agree with Tom P’s assumption regarding a .5% monthly decrease in inflation and was pleasantly surprised to see that, if true, the third IRMAA bracket for 2024 married couples would actually increase from $320K to $324K.

     • Paul says

       March 18, 2023 at 4:38 pm

       Buickman,

       I can’t speak for Tom, but I think what he meant was that inflation would be something like:

       February 6%
       March 5.5%
       April 5.0%
       etc….

     • Jeff Enders says

       March 19, 2023 at 1:18 pm

       Buickman – that is why it is best to use Harry’s approach and use the current month reported index value of CPI-U and only project foward. It is much easier and simpler to understand that way.

       best to use Harry’s analysis at the top of this webpage and especially the section titled “2024 IRMAA Brackets”. He gives you what occurs to 2024 IRMAA cutoffs if the MONTHLY inflation over the remaining 5 months of the measurement period is zero and what occurs to IRMAA if the MONTHLY inflation over the remaining period is 5% ANNUALIZED (i.e. 5%/12 or .416667 per month.

       it’s really a simple method; it is so simple, it doesn’t require any bandwidth to understand what occured in the past!

     • Buickman says

       March 19, 2023 at 5:04 pm

       Jeff,
       So are you then saying that if MONTHLY (the month over month) inflation actually declines by .5% each of the remaining 6 months that the CPI-U, which is currently 300.840, would also go DOWN each month? By how much, I’m not sure how to calculate. If I understand Harry’s zero inflation scenario correctly, it is assuming that the CPI-U remains unchanged at 300.840 for the next 6 months, correct?

     • Jeff Enders says

       March 20, 2023 at 1:45 pm

       Buckman – that is correct. And you would multiply 300.84 times (1-.5%/12) and the result by the same formula each subsequent month if you believed there would be 6% annualized DEFLATION. The August data point would be 291.93. The threshholds would be (single) $101,000; $127,000; $159,000; $191,000… double them for joint filings.

       And it is correct that Harry’s 0% scenario assumes CPI-U remains at 300.84 for the next 6 months.

370. Jeff Enders says

     March 20, 2023 at 5:39 am

     Buckman – that is correct. And you would multiply 300.84 times (1-.5%/12) and the result by the same formula each subsequent month if you believed there would be 6% annualized DEFLATION. The August data point would be 291.93. The threshholds would be (single) $101,000; $127,000; $159,000; $191,000… double them for joint filings.

     And it is correct that Harry’s 0% scenario assumes CPI-U remains at 300.84 for the next 6 months.

     Reply

     • Jeff Enders says

       March 20, 2023 at 10:04 pm

       sorry about that: – 300.84 times (1-6%/12) or 300.84 times .995

     • Buickman says

       March 21, 2023 at 10:11 am

       Jeff,
       Thank you very much for your replies and clarification. I think I now understand the calculation much better. Without creating a firestorm, am I correct in understanding that you do not agree with Tom P’s 3/15 analysis wherein he projects that the CPI-U would increase from Mar-Aug to 303.317, 303.564, 305.449, 308.163, 306.646, and 305.056 respectively, if month over month inflation decreased by .5% per month? This may be contributing to my previous confusion.

     • Harry Sit says

       March 21, 2023 at 10:46 am

       It depends on what you mean by “month over month.” Tom was talking about March over the previous March, April over the previous April. If these numbers drop at a moderate pace, the CPI numbers in the coming months will still increase. Jeff was talking about March over February, April over March. If these are negative, the CPI numbers will drop (by definition).

     • Buickman says

       March 21, 2023 at 5:30 pm

       Harry,
       Thank you! That clarifies things. Now I understand the difference between the two approaches. And thank you for hosting this website. I have referred friends to it who are also fighting the IRMAA battle.

371. Jeff Enders says

     March 21, 2023 at 2:35 pm

     Buicken – it’s not a matter of agreeing or disagreeing – it’s a different method of coming up with a forecast, but not the one normally used by this site. Tom’s was using a forecasted INFLATION of 6% while you were asking about a 6% DEFLATION.

     just stick with Harry’s forecast of 0% and 5% and the resulting analysis… life is simpler that way!

     Reply

372. Buickman says

     March 21, 2023 at 6:03 pm

     Jeff,
     What I was trying to ask about, perhaps unsuccessfully, was gradually decreasing inflation, from 6% to 3%, at .5% per month, not deflation. This is what I believe Tom was forecasting. Based on what Harry just said, that would still result in increasing CPI-U numbers over the next 6 months. Based on Tom’s calculations, the third IRMAA bracket for 2024 would increase from $160K/$320K to $162K/$324K. Harry’s 0% inflation scenario shows the third bracket remaining at $160K/$320K. And assuming .5% month over month deflation for the next 6 months still only reduces that third IRMAA bracket to $159K/$318K.
     So, I’m personally comfortable at $318K as a worst case scenario. And I have to believe that $320K is the real bottom, and $324K is a reasonable expectation.
     Thanks again for your responses.

     Reply

373. Lisa says

     March 22, 2023 at 3:25 pm

     I’m seeing $258,000 for 2.0 times if we have 0% inflation as well as for 5% for 2024. Am I reading this correctly?

     Reply

     • Harry Sit says

       March 22, 2023 at 4:22 pm

       That’s correct. It happens when one number rounds up and the other rounds down.

374. Lisa says

     March 22, 2023 at 4:37 pm

     I should add greater than $258,000

     Reply

375. Lisa says

     March 23, 2023 at 11:49 am

     How close to it being round up to $259,000? What is the actual #? Thanks!

     Reply

376. Tom P says

     March 23, 2023 at 1:56 pm

     Lisa, it can’t be $259,000… it’s either $258K or $260K since MFJ is just double the single rate, which is rounded to the nearest even thousand.

     Reply

377. LIsa says

     March 23, 2023 at 4:53 pm

     Thank you, Tom, good to know. So What is the actual number for single for 1.4 times?

     Reply

378. Tom P says

     March 24, 2023 at 2:53 pm

     Lisa, here are some “what if” numbers.
     With the data we have so far, the Single 1.4 unrounded bracket is: $128008.38, so $256K MFJ since the Single rate is first rounded to the nearest $1000 and MFJ is double that.

     If you extend the Feb CPI-U number (300.840) through Aug (no monthly change in inflation number, which IMO is virtually impossible since the number always changes based on historical data, we get: $128570.13, so $258K for MFJ.

     Using the projected year-to-year inflation adjustment method and dropping the yearly rate by 0.5% each month (6.0% Feb, then 5.5% Mar, 5.0% Apr, etc.) we get: $129540.62, so $260K for MFJ.

     If you want to be ultra conservative, use $256K, middle of the road, $258k, optimistic, but easily within reality, $260K. Data from the next 2-3 months will help solidify the direction.

     Reply

     • The Wizard says

       March 24, 2023 at 3:33 pm

       For most of us, the main importance of the projected IRMAA tiers for 2025 has to do with controlling our AGI/MAGI for 2023 to be a thousand dollars or so UNDER the particular tier threshold of interest.
       We control our AGI by deciding how big a Roth conversion to do or possibly how big a capital gain to take.

       But there is very little we can do in late March of any year, aside from monitoring the CPI. But by late NOVEMBER, we have a good handle on what our income for the year will be AND a much better idea what the safe IRMAA tier projections are.

       So most people should wait till November/December before sweating the deets…

     • Jeff Enders says

       March 24, 2023 at 5:13 pm

       Wizard:

       but even in Nov/ Dec there is uncertainly.

       While the 2023 MAGI ‘locks in’ on December 31,2023, the 2025 IRMAA threshholds do not ‘lock in’ until the August, 2024 CPI-U is announced.

     • Jeff Enders says

       March 25, 2023 at 8:09 am

       Lisa – I would think about it a little differently. Based on Harry’s appoach, the reported inflation rate is going to have to average slightly MORE THAN .42% per month (5% annualized) over the remaining 6 months of the reporting year for the IRMAA bracket to adjust to $260k.

       look at the chart on at the bottom of the first page of this link and consider the likelihood that the next 6 data points AVERAGE slightly MORE THAN .42%:

       https://www.bls.gov/news.release/pdf/cpi.pdf

       If Jay Powell gets his way, inflation would be expected to average BELOW .42% over the next 6 months, meaning the bracket would NOT adjust to $260k. That is the risk you are facing. Good luck!

379. Lisa says

     March 24, 2023 at 5:14 pm

     Thank you so much, Tom, for taking the time to provide me with the information. Much appreciated!

     @The Wizard, I agree with you. The reason I’m “sweating” it now is because I just picked up my 2022 taxes and my AGI is $258,673! Unfortunately, for some of us, projecting AGI is not as clear cut as it’s for others. I guess it’s going to be a case of wow, I did such a great job in estimating or I messed up big time. Wish me luck!

     Thanks again, Tom!

     Reply

     • jimdog says

       March 25, 2023 at 10:42 am

       Lisa, have you considered lowering your 2022 AGI by making a tax deductible trad. IRA contribution before 4/15? Of course you can only do this if you have wage income, so I don’t know your situation.

380. Lisa says

     March 25, 2023 at 11:27 am

     Jimdog, thanks for the suggestions. Unfortunately, or fortunately, I’m retired and do not have any wage income.

     Years ago, on my very first cruise, I placed my first bet ever, $5 on snake eyes at the crap table. My husband laughed at me. I walked away with $150! Maybe it’s a very slim chance, but I still have a chance. The half full part of this is, I turn 65 Aug 24, so I will only have to pay the extra for 5 mos plus the 12 mos for my husband. Let’s see, how else can I make myself feel better? Oh, the premium is being deducted from our SS check, so I won’t miss something that I never received? Just like 401K deductions, right? 🙂

     I left $ on the table for 2021, that’s why I got a little too aggressive in 2022 with Roth conversion. Maybe I’ll get it right for 2023. This Cliff and two year look back stuff is too much for this old lady!

     Thanks everyone for your comments!

     Reply

381. Marty Y says

     March 25, 2023 at 11:38 am

     Lisa,
     If misery loves comfort, we are in the same boat with AGI of 258,914. I’ve been following this blog for years, and thought we would be safe after arranging charitable gift distributions. The truth is, with the variation in inflation it has been a very difficult year to predict the AGI cut off for IRMAA. Sigh.

     Reply

382. George Young says

     March 27, 2023 at 9:32 am

     Well, it looks like I may have overdone it with a 2022 Roth conversion. Depending on inflation remaining to be experienced for the next six months, I very possibly may be exceeding the next year’s IRMAA threshold for going to the next higher bracket. My solution strategy is as follows: Pay the taxes due now (by April 18th) and then request a filing extension to take me out to October 15th. By then maybe we’ll know what the 2024 IRMAA brackets will actually be. In any case, I’ll file a paper return on October 15th. I can’t believe the IRS will then process my paper return and learn my 2022 IRMAA MAGI before the time they (IRS) and Medicare are due to be determining 2024 IRMAA premiums. So whether or not I’ve gone over, it will be too late and they’ll have to use my 2021 MAGI. Do you think this will work?

     Reply

     • Jeff Enders says

       March 29, 2023 at 8:14 pm

       no; i doubt it will work, just my hunch.

       People file back taxes and amendments for prior tax years all the time. You mean they all avoid IRMAA?

       I can’t imagine the IRS and SSA ‘snap a chalk line’ late in the year in a “once and done” fashion and anything received up until that date gets billed IRMAA and everyone else is Scot free. It incents paying the tax, but not filing the return.

       if your stategy really had legs, I have a better way to do it. 1) Just underreport your income, so you are below the appropriate IRMAA threshhold, but pay enough to cover what you underreporterd. 2) wait for the IRS and SSA to ‘snap the chalk line’. 3) submit an amendment to report the income that was under-reported; since you overpaid the tax originally (and did not request a refund in anticipation of the amendment), there is no penalties or interest.

       I gotta believe that after the initial report from the IRS to SSA, there are ongoing follow up analysis to catch those that filed late, those that amended their tax returns, etc.

       as someone else posted, can you make a 2022 TRAD IRA contribution prior to April 18 to lower your MAGI? You would need earned income to pull this off, but it is a quite legitimate way to lower MAGI at this late date.

     • Joe says

       March 31, 2023 at 12:47 pm

       George, Marty,

       There is a 2 year lookback on tax returns for IRMAA purposes.

     • Joe says

       March 31, 2023 at 12:51 pm

       Jeff,

       When you under-report your income in step 1, you will get a big refund.

       Thus, when you add in (via amendment) the previously under-reported income in step 3, you will owe a bunch of tax, plus a big penalty.

     • James says

       April 28, 2023 at 2:40 pm

       No, see post #332 from Dec 13th, 2022. What happens is around fall (Oct / Nov) the IRS transfers the updated master file to Social Security. This filed includes any Form 1040x’s that were filed that changes (increase / decrease) MAGI. And you can get a retro active bill!

383. Marty says

     March 27, 2023 at 9:48 am

     George, I think when the IRS catches up with your paperwork, they will calculate and retroactively deduct any IRMAA payments due from your SSA payments. You either pay them now or pay them later.

     Reply

384. Keith says

     March 31, 2023 at 12:41 pm

     Harry,

     We will get the August 2023 inflation numbers about Sept. 10 or 12. So at that time, we can make a pretty accurate, but UNOFFICIAL, estimate on the 2025 brackets.

     But when, EXACTLY, do the 2025 brackets get OFFICIALLY announced?

     Reply

     • The Wizard says

       March 31, 2023 at 12:50 pm

       The IRMAA tiers and monthly amounts for this year, 2023, were announced on September 27, 2022.

       So we can expect the numbers for 2025 to be announced around 9/27/2024…

     • Tom P says

       March 31, 2023 at 1:20 pm

       Keith, the August 2023 CPI-U will determine the *2024* IRMAA brackets, not the 2025. You’ll have to wait another year for the 2025 brackets, which is what makes estimating them so challenging. Once the August CPI is announced on September 13, 2023, we’ll know with 100% accuracy what the brackets will be. The official announcement should be later in the month.

385. Ally says

     March 31, 2023 at 1:23 pm

     I have been following this site for 2 years now. I have been retired since 2008 and am a widow. I convert to a Roth for my kids in Dec after I add up my income, interest etc. I am so risk adverse I am only in CD’s. But I get Harry’s numbers in Nov and then convert the 2nd or 3 rd week of Dec and have that money put in a Roth IRA savings and then add it to a CD the first of the years where many places will allow it that I already have unless they or someone else offers a higher rate. I have to split one of the Roths in July and one in Jan. because with the last interest that is added to it it will be just over the limit for insurance.
     Some of my children are in their 60’s and near retirement so I want them to use the Roth’s and it will not count toward IRMAA. Now that the IRA’s have to be spent in 10 years this helps a lot.
     I hope Harry knows how much he helps people with this blog.
     Also prepare because only businesses will keep the lower tax rates. Most of will be paying higher income tax after 2025 with the trump tax cut, unless Congress changes the laws again.

     Reply

386. Michael Darroch says

     April 8, 2023 at 8:47 am

     I have tried following your calculations and now think I understand how the calculations are done. I tried doing my own and come close, but don’t end up with the same numbers.
     These are my numbers for 2023 2023
     $193,511 $194,000
     243,596 244,000
     303,926 304,000
     364,256 364,000

     Where the three highest brackets are all $2,000 lower than your calculations.
     The numbers I am using are – Average CPI-U 283.74; Difference 34.468 and percentage increase of 13.83%
     Any idea of where I am going wrong?

     Reply

     • RobI says

       April 8, 2023 at 9:45 am

       I get 299.532 avg for 2022/23 using zero change from now until August. CPI-U has not been lower than 296.797 in this period. Are you maybe using the 2021/22 period data?

     • Harry Sit says

       April 8, 2023 at 10:05 am

       The average CPI-U from September 2021 to August 2022 was 285.848.

     • Tom P says

       April 8, 2023 at 10:30 am

       Michael, one issue you have is you are rounding the wrong number. You must calculate the single filing number first and round that to the nearest 1000. For 2023, the single filing number is calculated by first dividing the 2021-2022 CPI-U average by the average from 2017-2018. So, 285.848/249.280=1.14670.

       Then you take that number and multiply what the single filing bracket was in 2019. The tiers were $85,000, $107,000, $133,500, $160,000, and $500,000. So, for the 1st tier in 2023 you get $85,000×1.14670=$97,469.5 which rounds to $97,000. Multiply that by 2 to get the MFJ number of $194,000. The other tiers are done in an analogous manner, except for the top tier, which is fixed at $750,000 for MFJ.

       The same method is used for any year going forward, except the top tier starts adjusting in 2026-2027, effective year 2028.

387. Michael Darroch says

     April 8, 2023 at 6:58 pm

     Thank you for clarifying the calculation – REALLY appreciate your work and giving us the tools to help minimize the impact on the Medicare IRMAA Premiums. It has save us in the past and sure will help in the future. Looking forward to getting into some of the other tools you have.

     Reply

388. Layne Z says

     April 13, 2023 at 10:29 am

     Harry, I’ve found your work to be really useful. I think I understand the approach and usually agree with your numbers. But with the Mar 2023 inflation adjustment, your bracket (for %5 Inflation Assumption for 2025, Single , Standard*2.0) <= $169K differs slightly from mine. Could you please review my approach and point out where I've gone wrong?
     – Mar 2023 CPI-U of 301.836
     – assumed monthly inflation factor = 1 + 0.05/12 = 1.0041667
     – resultant CPI-U's for 2025 IRMAA bracket:
     Sep-2023 (309.461) , Oct (310.750), … , Aug-2024 (323.945)
     – with an average CPI-U = 316.653
     – 2018 base year
     Average CPI-U = 249.280
     Standard*2.0 Single bracket = 133.5
     – so, I would project a Standard*2.0 Single bracket of
     = 170 (rounding 169.581 = 133.5*316.653/249.280)
     Where have I gone wrong?

     Reply

     • Tom P says

       April 13, 2023 at 11:06 am

       Layne, FWIW I get the exact same numbers as you if you round each computed monthly CPI number to 3 digits before applying the next month’s increase. The only number that differs from Harry’s is the 3rd tier being $170K instead of $169K. Based on recent inflation numbers it seems doubtful that inflation will hold at 5% for this long, but it could be in the 3-4% range, so the 0-5% bracketing does seem like an effective way to put some bounds on the numbers considering we have zero data available for 2025 brackets.

     • Harry Sit says

       April 13, 2023 at 11:15 am

       A 0.4167% increase per month compounded for 12 months would be over 5%. I use a 0.4074% monthly increase for the 5% annual inflation estimates.

     • Layne Z says

       April 13, 2023 at 11:30 am

       Tom – yes I agree that assumed inflation of 0% and 5% are effective for bounding the 2025 IRMAA brackets.

       Harry – the monthly inflation factor as 1.0040741 (so that yearly [compound] inflation factor is exactly 1.05) clears up my confusion, thanks.