Avoiding IRMAA
My wife and I are on social security and my pension, we have CD’s and annuities With our S,S. and pension we don’t draw on any of our savings. With high interest rates on our CD’s and some annuities coming due the taxes due will be much higher . What advisors would be best for us to use to help with keeping our taxes lower and not earning too much to effect our Medicare payments ?I am 73 and my wife is 68.
Terry Says
That’s a lovely problem — and there’s not much you can do about it. Right now, tax rates are pretty low. And if you want to keep your money safe, there is not much you can do to protect yourself from the higher earnings that come with CDs and T-bills when rates are high. (That might not be such a big problem in future years, if we get inflation under control –and rates come down!) Income from CDs and T-bills is taxed as ordinary income (although T-bill interest is exempt from state income tax).
You could “roll” the annuities — depending on what you have. For trusted advice go to www.StantheAnnuityMan.com and show him what you have. That would keep the money growing tax-deferred. I trust him completely to guide you on this portion.
And do you know the IRMAA levels? They change each year.
The IRMAA is calculated on a sliding scale with five income brackets topping out at $500,000 and $750,000 for individual and joint filing, respectively. These figures change annually with inflation. IRMAA calculations have a two-year lag time. Whether you pay an IRMAA in 2024 depends on your 2022 tax returns.
For 2024, beneficiaries whose 2022 income exceeded $103,000 (individual return) or $206,000 (joint return) will pay a total premium amount ranging from $244.60 to $594.00 depending on income.
Read more here.
