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First I have heard of this increase. Will it effect people who are on SS, but not on Part B, since they have their own insurance, when they eventually get on Part B? In our case My wife is on SSDI and we are using my health insurance at work. Next August I had planned to start SS at FRA, while still working, but staying on insurance at work. I would probably work for just another year using the SS monies to pay down debt and build a small nest egg for emergencies.
Should we consider me starting SS now and getting virtually nothing from the reduced amount until I reach FRA because of the earnings reduction, to avoid the increase or just pay the higher premiums? I have heard that the penalties for having a high private income are paid back later on. Is that true?
edit: I am already enrolled in Medicare Part A only. Does that puit me in the hold Harmless realm, or do you actually have to be paying for Part B, D etc already?
One more question. Someone mentioned that premiums are determined based on income from previous years. We are about to withdraw a sizeable sum from our IRAs to purchase our retirement home with a reverse mortgage. Will that w/d "income" for this year cause our premiums to skyrocket when we do eventually enroll in Part B? If we do that this year, which years would we need to avoid stating Part B or other supplements to keep the premiums down?
Last edited by Cruzincat; 08-29-2015 at 06:53 AM..
You have to be receiving SS AND Medicare part B w/o an escalated income bracket
If the increase in 2016 Medicare part B would reduce your monthly SS benefit then you fall into the "hold harmless" class of recipients and pay no increased B premium for 2016.
Have no idea how your IRA withdrawal effects your MAGI but your eligibility should be calculated with past (not current) income tax filing -- unless you qualify for an exemption.
There are basically 4 reasons you can appeal and ask to have income reevaluated
We are considering whether our situation qualifies for an appeal.
This is another article about the increase
Are you locked into the Part B premium rate at the year you begin, or would it adjust each year based on the previous year's IRS reported income? IOW, if I have to retire next year, after taking the w\d this year, I would pay a rate based on this years inflated income, which would only be a one time increase. In 2016 my income would return to normal, falling within the 170K married filing jointly. Would that mean either retire now or wait until 2017, to avoid paying a super high Part B premium for the rest of my life? I don't think an IRA w/d qualifies as one of the exemptions.
Its just like in France. They knew what heck would be raised if they increase retirement age. So they just increased the number of years of work needed to qualify to retire. Political its a loser unless you can frame it different. It will kick the can down the road some without having to raise SS tax and/or reduce benefits as soon or reform the law by various means; also a loser with some no matter where the cost lands.
The Part B premium lowest, fixed amount based on MAGI of income tax two yrs prior
2015 Premium based on 2013 income tax
So yes-- premium will fluctuate based on reported income not the current year...
So even if you are paying a supplemental/surcharge Part B premium in 2015 (based on 2013 income), and your 2014 MAGI fell to below any surcharge level BUT you are not receiving SS then your Medicare B will go up the extra 50
If during the year you file/receivefor SS, you will still pay the increased base premium because you were not receiving SS in Dec, 2015.
And I guess that becomes your new base premium ongoing...
The $50 is not a big deal when you compare it with paying over $500 a month at the highest supplement level when your current income is well within the "hold harmless" level...
I can understand paying the surcharge if CURRENT income is over the limit, but using income from two years prior causes lot of imbalance I imagined...
Many people in this age bracket have lot of income changes for various reasons...
The $50 is not a big deal when you compare it with paying over $500 a month at the highest supplement level when your current income is well within the "hold harmless" level...
I can understand paying the surcharge if CURRENT income is over the limit, but using income from two years prior causes lot of imbalance I imagined...
Many people in this age bracket have lot of income changes for various reasons...
As a practical matter, "using income from two years prior" is the only possible way to do it. For the year 2015, for example, - and remember said year began in January, the only available data on our income was our tax return from 2013 because the 2014 return was not due until April 15. If we are paying (in 2015) a rate higher than would be necessary based on (unavailable) 2014 income information, then that will be corrected when we get the lower rate for 2016 based on the 2014 income, even though in 2015 our income might have gone way up, but that won't catch us until 2017.
So we are always getting the correct deal, just delayed, and delayed by necessity.
The people who are going to get hit with this the most are the newly eligible for Medicare at 65, but too young to collect full Social Security benefits until 66. Donut hole if you can call it.
The first year's worth of Part B Premiums has to be paid for by the beneficiary when it cannot be taken out of a Social Security check.
This just proves the point that the ages for both should be the same, both at 65.
We pay our Medicare part B quarterly and separately since it goes by your date for eligibility.
This is something most people don't factor into their budgeting. Many people get smacked when they face RMDs and have income go up and they don't have an option by to take it whether they need it. Your SS winds up being taxed and you can pay higher Part B premiums.
If you did a file and suspend you are not protected and get the full increase which as of now will be raised from 104 to 159.
This is one of the problems with delaying either not filing or suspending.
Seems that way. I see it as a tradeoff.
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