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My Wife (60) and I (61) retired a couple of years ago and are currently receiving a subsidy for health insurance under the ACA. We want to sell 3 rental properties and realize it is probably going to change the amount of our subsidy and / or increase our premium for medicare part B depending on when we sell.
If I sell within 2 years of starting Medicare And realize more than $170,000 gain we will pay more. I get that part, but will we be locked into that Medicare part B premium forever?
TIA...I tried searching and just couldn't find the answer.
My experience (so far) is that Medicare looks at the reported (IRS) income from two years prior to the current year. They use that value to determine my premium for Part B. .So, my premium has gone down, then up again just recently because 2015 was > than 2014. Please others, correct me if I'm wrong on this...Also, when we first started, it took them several cycles to "settle" on the premium amount, so don't be surprised if you start at (say) $104/mo, then get a bill saying that you owe more.
The premiums are determined by your income 2 years prior. For 2017, they use your income from 2015. If you make a lot of money one year but not another, you'll just have to pay the higher premiums for one year. It's not permanent, if it's just one high year.
How does it work starting mid year 2020? I'm guessing they will.still look.at 2018 taxes? And then when my Wife starts in 2021 they will look at 2019 for both of us.
How does it work starting mid year 2020? I'm guessing they will.still look.at 2018 taxes? And then when my Wife starts in 2021 they will look at 2019 for both of us.
Per Medicare:
Quote:
If your modified adjusted gross income is above a certain amount, you may pay an Income Related Monthly Adjustment Amount (IRMAA).
Medicare uses the modified adjusted gross income reported on your IRS tax return from 2 years ago (the most recent tax return information provided to Social Security by the IRS).
You might want to consult an estate planning attorney, especially one that has worked with property transfer and sales. There may be some very legal ways to deal with this situation, putting the properties in a trust, etc.
This higher premium can be appealed assuming you do it within 60 of notification, and the high income is not going to be continued. In our case it was the year we retired and husband got severance pay and was leaving a high paying job.
We did not appeal in time for his case so have to pay the penalty for this one year. I will start Medicare in June when I turn 65, so once notified will appeal immediately. the higher premium per person in our case is $285. a month.
This higher premium can be appealed assuming you do it within 60 of notification, and the high income is not going to be continued. In our case it was the year we retired and husband got severance pay and was leaving a high paying job.
arwenmark is correct and a number of people on CD have been successful doing this, when the higher income is a one-off due to sale of appreciated property. So, look into that as well. Mathjak is one I remember, but there many others who've posted on a successful rollback of that higher Part B premium.
This higher premium can be appealed assuming you do it within 60 of notification, and the high income is not going to be continued. In our case it was the year we retired and husband got severance pay and was leaving a high paying job.
We did not appeal in time for his case so have to pay the penalty for this one year. I will start Medicare in June when I turn 65, so once notified will appeal immediately. the higher premium per person in our case is $285. a month.
Good info, thank you
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