How to inform Medicare that your income is lower

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, Toni.

--Joseph from Tulsa, Okla.

Hi Joseph:

Yes, taking your RMD at 72 can raise your Medicare Part B and D premiums. Many Americans do not realize that any increase in your MAGI (Modified Adjusted Gross Income) when you are filing jointly can increase your Medicare premiums. Medicare bases your premiums on both you and your spouse’s income whether one is Medicare age or under.

Your RMDs and Social Security check, combined with your wife’s income of $250,000 raised your Medicare premiums. The 2024 Part B premium of $454.20 and $53.80 for Part D tells me that your joint income in 2024 was from $322,001 to $386,000.

I have good news for you, Joseph. Since your wife is no longer employed as of September and earning a salary of $250,000, you can file an appeal with Social Security to have your Medicare Parts B and D reduced.

Do you want to wait 2 years for the IRS to inform Medicare via Social Security that your income has decreased due to a “Life-Changing Event” (such as lay-off, death of a spouse or divorce)? Or do you want to let Medicare know now by filing a form with Social Security notifying them you have had a “Life Changing Event” and are no longer in that income bracket?

The Social Security form is SSA-44 “Medicare Income-Related Monthly Adjustment Amount - Life-Changing Event” and is available at www.ssa.gov/forms. The SSA-44 form can help to lower your “IRMAA” (Income Related Monthly Adjusted Amount). Examples of life-changing events that can lower your reported MAGI are:

-- You have gotten married or divorced, or your spouse has died.

-- You or your spouse have stopped working or have reduced your hours.

-- You or your spouse lost an alternate income source (e.g. income-producing property, pension income).

Fill out form SSA-44 and attach the original documents or certified copies to verify your change in income. (Chapter 8 of Toni’s Medicare Survival Guide Advanced edition includes the Social Security forms to enroll in Medicare properly such as CMS-L564, CMS-40B and the SSA-44.) Once Social Security is satisfied with the evidence, it will update its records and correct your Part B and Part D premiums to reflect your current income.

Many Americans believe that everyone pays the same amount for their Medicare Parts B and D premiums. In fact, your current premium is based on the amount you filed on your yearly IRS income taxes, whether as an individual or jointly.

In 2024, if your income as an individual is over $103,000 or married over $206,000, your Medicare Parts B and D premiums will be higher. Social Security explains in the letter they mail how they arrived at the Part B and D premiums based on your MAGI from your last filed tax return. Joseph, your MAGI was over $322,001 and the letter you received from Social Security shows what the Part B and Part D premium adjustment will be. You will have to keep filing the SSA-44 form each year until your annual income, whether as an individual or couple, finally corresponds to the year’s MAGI lower amount.

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Toni King is an author and columnist on Medicare and health insurance issues. She has spent nearly 30 years as a top sales leader in the field. For a Medicare checkup, call the Toni Says call center at (832) 519-8664 or email info@tonisays.com regarding your Medicare plans and options. Toni Says Medicare Survival Guide Advanced edition is available at www.tonisays.com.