How To Inform Medicare That Your Income is Lower

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"I began taking my RMDs (Required Minimum Distributions) from my 401(k) when I turned 72 and my Medicare premium in 2024 is $454.20 for Part B and $53.80 for Part D. Did taking my RMD with my Social Security check raise my Medicare premiums? My wife, Karen, was working last year and made about $250,000. Are both of our incomes used to determine my Medicare premium?

Also, Karen was laid off from her job in September and our joint income has changed drastically since she is no longer making $250,000. How do I let Medicare know that my income level has changed Thanks!" - Joseph

• Did taking my Required Minimum Distributions (RMDs) along with my Social Security check increase my Medicare premiums?
• Is my wife's income, which was $250,000 last year, considered in determining my Medicare premium?
• How can I inform Medicare about the significant change in our joint income after my wife was laid off?

Toni Says:

Understanding How RMDs Affect Your Medicare Premiums

Yes, taking your Required Minimum Distributions (RMDs) at age 72 can increase your Medicare Part B and D premiums. Many Americans do not realize that an increase in your Modified Adjusted Gross Income (MAGI) when filing jointly can lead to higher Medicare premiums. Medicare calculates your premiums based on both your and your spouse’s income, whether one is Medicare age or under.

Impact of Combined Income on Premiums

Your RMDs, along with your Social Security check and your wife's $250,000 income, have contributed to the rise in your Medicare premiums. The 2024 Part B premium of $454.20 and Part D premium of $53.80 indicates that your joint income for 2024 was between $322,001 and $386,000.

Filing an Appeal to Reduce Premiums

I have good news, Joseph. Since your wife is no longer employed as of September and her $250,000 salary has ceased, you can appeal to Social Security to have your Medicare Parts B and D premiums reduced.

You don't have to wait two years for the IRS to inform Medicare about your reduced income due to a “Life-Changing Event” such as a lay-off. You can proactively inform Medicare by filing a form with Social Security.

How to Notify Medicare of Income Changes

Use the Social Security form SSA-44, “Medicare Income-Related Monthly Adjustment Amount-Life-Changing Event,” available at www.ssa.gov/forms. This form can help lower your income-related monthly adjusted amount (IRMAA). Examples of life-changing events include:

• Marriage, divorce, or death of a spouse.
• You or your spouse stopping work or reducing hours.
• Loss of an alternate income source (e.g., income-producing property or pension income).

Complete form SSA-44 and attach original documents or certified copies to verify your income change. Once Social Security reviews and accepts your evidence, they will update their records and adjust your Part B and Part D premiums accordingly.

Understanding Medicare Premium Calculations

Many Americans assume everyone pays the same Medicare Parts B and D premiums, but these are based on your IRS income tax filings, whether individually or jointly. In 2024, if your income exceeds $103,000 individually or $206,000 as a married couple, your Medicare premiums will be higher. Social Security explains the premium calculations based on your MAGI in the letter they send out, detailing your Part B and D premium adjustments.

Joseph, given that your MAGI was over $322,001, the letter from Social Security outlines the premium adjustments. You will need to continue filing the SSA-44 form annually until your income aligns with the lower MAGI threshold for that year.

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