One time spike in income creates Medicare premium mess--rant (2014, state, retired)

[luv4horses]

Thanks for these comments, everyone. I am not currently complaining about the year that I've already completed (2015) with the higher premiums. What I'm trying to correct is the continuing high premiums (2016) when the 2015 income was low. No where/no one has officially acknowledged that the payments will automatically drop back. Instead, I have 60 days to "appeal". I will trek over to the county office an hour away, with my executed form (which the SS person said was not useful--maybe she was wrong), and hope for the best. I just don't want to be spending 3X the normal premium for the rest of my life based on one instance of increased income. No one ever told me I should have sold all my property before I hit medicare age.

[mathjak107]

not knowing about selling everything pre medicare age is something a good adviser would have told you . but of course few want to spend the money for advice since we all think we know all we need to know .

we were instructed to start liquidating our holding company 7-10 years before we retired .

each year has it's own new tax year your premiums are based on .

https://www.medicare.gov/your-medica...t-b-costs.html

[luv4horses]

Originally Posted by mathjak107

not knowing about selling everything pre medicare age is something a good adviser would have told you . but of course few want to spend the money for advice since we all think we know all we need to know .

You are right of course. It is hard to know ahead of time that things are not as simple for retired folk as they are pre-retirement. When you only have simple financials (401K, maybe own a home) most of us do not think to obtain financial advice, other than perhaps on taxes when there are special situations (if we move, buy a new house, get married, etc.). I wonder how many other 'gottcha' situations are lurking for the average retiree without unusual investments.

Adding: I did have a Fidelity advisor and a CPA

[mathjak107]

a cpa only means they are good at corporate audits . my daughter in-law is a cpa and works for one of the most famous hedge fund managers ever . but she knows zero about retirement planning .

most advisers know just as little as they were trained and know mostly about the accumulation side of things .

there are very few advisers that are actually in tune with all the parameters that are involved in the 2nd half of the game . finding one is not easy . but you can kind of start with some of the ed slott trained ones listed on ed's website . . just be aware that ed is a big believer in using integrated strategy's of annuity income , your own investments and life insurance ploys for reducing taxes and getting guarantees in place .

[Bungalove]

I just started receiving Medicare this past June and had to pay a higher premium due to my having taken a withdrawal from an IRA in 2013 that put me over the base amount. The letters I received at that time indicated that I would be "penalized" by the higher premium for a year. However, I was in town this week for a scan and decided to drop in to the local SS office to see if I could get the appeal form. It turned out that the one-time withdrawal would not have qualified for an appeal; however, Medicare dropped my premium to the minimum amount for 2016 anyway, since my 2014 income was lower. Yay!

[loves2read]

Originally Posted by mathjak107

the rule is selling assets is not grounds for exemption from the increase in premium . it states it very clearly once you find their definitions .

your income is your income that year , period , whether it will happen again or not .

if not then you get adjusted back down the following year . only loss of the property to arson or theft is considered a loss of income property . it says , selling a property is not an exception .

you merely traded the income for a lump sum .

in 2014 we owned some commercial lease rights that generated 25k a year for us . those lease rights were sold to an investor group by our senior partner . we had no say in it .

but we were handed a lump sum instead and had we been on medicare in 2014 we would have been bumped up to 389.00 a month from the 104.00.

it is what it is and if that was your income then it is your income with out exception .

Are you still standing by this statement--because I am thinking your 2014 MAGI which would reflect that lump sum sale income would take effect NOW for 2016 Medicare premiums...
And if that was above the base line for allowed MAGI --whether anyone was receiving SS check which would be reduced by increased premiums, then your Medicare premiums would still go up to reflect the one-time lump sum...
My understanding was that no one who had 2014 income over the MAGI base line was grandfathered into the old Medicare premiums for 2016--even if their premiums paid through SS would be reduced...

[mathjak107]

They gave us an appeal date of 4/15 so it is worth a shot

[loves2read]

Good luck
But to clarify----so your (or your wife's) premiums were supposed to go up based on the 2014 income...
Don't know if they held off because you requested the appeal...

Is your appeal is based on fact that you didn't have an option...you were basically along for the ride in the sale of the asset?

I think our best shot to ask for reconsideration comes because now my husband is terminating his defined benefit plan with his S-Corp because while the S Corp will still exist, there is not enough income from it to justify continuing the DB plan...basically he is retiring from his S-Corp employment...
Doing the rollover tomorrow at our financial advisor's office---
Will have the documents from the fiduciary that oversaw the DB plan and filed the paperwork each year to certify it met tax guidelines showing it has been terminated--no more self employment income...
As well as the W-2 for the reduced 2015 self-employment wages my husband paid himself...
All income now will be just pass-through/passive income...and likely under 30K a year...

[NewbieHere]

You need to go in person at a local office.

[mathjak107]

they give you a date to appear on the phone