irmma QLE "retirement" minimum amt work in year?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
jbinpa59
Posts: 150
Joined: Wed Jul 10, 2019 3:29 pm

irmma QLE "retirement" minimum amt work in year?

Post by jbinpa59 »

I will be retiring end of 2022 at earliest and of 2023 at latest. but probably somewhere in the middle

I'm 62yo (be 63 in Oct 2022) DW 61 in Aug 2022
I'm considering Roth Conversions as well and don't want to get hit with IRMMA

As I understand it if I go over an IRMMA cliff while still working (due to doing a Roth Conversion) then retire at the end of that year
I can appeal the IRRMA increase and mostl likely get it repealed.
(should of been doing all Roth TSP since it was first offered, deffered then at 15% and now want to pay taxes at 22% to avoid taxes at 27.75% :oops: )

My question is has far into a calender year do I have to work to be able to claim "retirement" as a Qaulifing Life Event?
2weeks, 2mo, 6mo, 7mo?
working 2-3 months into 2023 to get 2 years to the top of the 22% bracket without worrying about IRMMA cliffs would be worth it to me

the question may be moot if the 2024 IRMMA cliff is higher than the 2022/2023 22% bracket top (looks like it may be)

TIA
User avatar
FiveK
Posts: 15693
Joined: Sun Mar 16, 2014 2:43 pm

Re: irmma QLE "retirement" minimum amt work in year?

Post by FiveK »

https://www.ssa.gov/forms/ssa-44-ext.pdf is the current appeal form.

There is no qualifier on "into a calendar year" - just that you had one of the "life changing events" and consequently had (or reasonably expect to have) a lower MAGI for Medicare premiums (IRMAA tiers) than the one Medicare used to set your premium.
chemocean
Posts: 1561
Joined: Mon Dec 19, 2016 8:45 pm

Re: irmma QLE "retirement" minimum amt work in year?

Post by chemocean »

I am not a lawyer or a CPA or Medicare expert
I don't think you can appeal based on a QLE until you actually retire.

You turn 63 in Oct 2022
You turn 64 in Oct 2023
You begin Medicare in Oct 2024, at which time you may have to pay IRMMA.

If you retire in 2022, you can appeal the four (?) months of 2024 IRMMA based on your QLE retiring event in 2022.
As far as the appeal is concerned from this form and listening to the IRA and Retirement podcast, the only two facts that are of concern as far as appealing the 2024 IRMMA is 1) did you have a qualifying event, and 2) what is your PROJECTED 2024 MAGI. The sources of the 2022 income at this point doesn't matter.

Be warned if you project your 2024 income at one level and then decide that you are in the clear, and do a end of the 2024 Roth conversion, SSA will bill you for the IRMMA in 2025 based on your actual MAGI from your 2024 tax return.

As for as retiring in 2023, you still can appeal the partial 2024 year IRMMA based on a QLE. Whether you will be charged a full year 2025 year IRMMA will depend what your 2023 MAGI is. Since you retire (QLE) in 2023, you can appeal your 2025 IRMMA based on your projected 2025 MAGI. If you don't retire until 2023 and do a large Roth conversion in 2023, this income will not matter as far as your 2025 IRMMA appeal is concerned. But check with professional before taking this action.
User avatar
22twain
Posts: 4016
Joined: Thu May 10, 2012 5:42 pm

Re: irmma QLE "retirement" minimum amt work in year?

Post by 22twain »

jbinpa59 wrote: Mon Aug 08, 2022 4:13 am As I understand it if I go over an IRMMA cliff while still working [...]
I can appeal the IRRMA increase and mostl likely get it repealed.
A friendly tip: see my signature below. :happy
Meet my pet, Peeve, who loves to convert non-acronyms into acronyms: FED, ROTH, CASH, IVY, ...
SuzBanyan
Posts: 2008
Joined: Thu Jun 02, 2016 11:20 am

Re: irmma QLE "retirement" minimum amt work in year?

Post by SuzBanyan »

FiveK wrote: Mon Aug 08, 2022 7:35 am https://www.ssa.gov/forms/ssa-44-ext.pdf is the current appeal form.

There is no qualifier on "into a calendar year" - just that you had one of the "life changing events" and consequently had (or reasonably expect to have) a lower MAGI for Medicare premiums (IRMAA tiers) than the one Medicare used to set your premium.
This.

There is no partial year* or reduction simply because you had a QLE. All a QLE allows you to do is to ask to have a later year used to determine your IRMAA tier. In the most common situation, you quit your job (or reduce hours) in 2022. Your MAGI is lower in the tax years 2023 and 2024. This may be directly because your quit working or reduced hours, but it doesn’t matter why as long as you have a QLE. What is important is that your MAGI for 2023 and 2024 would mean you are in a lower IRMAA tier than your MAGI for 2022. You can essentially ask that the 2023 MAGI be used to determine IRMAA for 2023 and then ask that 2023 or 2024 MAGI be used to determine 2024 IRMAA.

* Partial year applies only in the sense that if you turn 65 part way through a year, the IRMAA will only apply to the months your are receiving Medicare. But if your MAGI is $250k for the year you turn 65, it won’t matter that you earned all of that in the first 6 months.
Topic Author
jbinpa59
Posts: 150
Joined: Wed Jul 10, 2019 3:29 pm

Re: irmma QLE "retirement" minimum amt work in year?

Post by jbinpa59 »

SuzBanyan wrote: Mon Aug 08, 2022 2:09 pm
FiveK wrote: Mon Aug 08, 2022 7:35 am https://www.ssa.gov/forms/ssa-44-ext.pdf is the current appeal form.

There is no qualifier on "into a calendar year" - just that you had one of the "life changing events" and consequently had (or reasonably expect to have) a lower MAGI for Medicare premiums (IRMAA tiers) than the one Medicare used to set your premium.
This.

There is no partial year* or reduction simply because you had a QLE. All a QLE allows you to do is to ask to have a later year used to determine your IRMAA tier. In the most common situation, you quit your job (or reduce hours) in 2022. Your MAGI is lower in the tax years 2023 and 2024. This may be directly because your quit working or reduced hours, but it doesn’t matter why as long as you have a QLE. What is important is that your MAGI for 2023 and 2024 would mean you are in a lower IRMAA tier than your MAGI for 2022. You can essentially ask that the 2023 MAGI be used to determine IRMAA for 2023 and then ask that 2023 or 2024 MAGI be used to determine 2024 IRMAA.

* Partial year applies only in the sense that if you turn 65 part way through a year, the IRMAA will only apply to the months your are receiving Medicare. But if your MAGI is $250k for the year you turn 65, it won’t matter that you earned all of that in the first 6 months.
my normal w2 income is uder 100K
DW is retired not drawing SS yet
we file MFJ

So if I understand all the above posts correctly :

A) I just need w2 income for some small part of a year that I retire in, which is then a QLE

B) I can do Roth Conversions to whatever level of tax pain I can deal with in 2022 and 2023, probably the top of the 22% bracket
which might trigger IRMAA for 2024/2025

C) but as long as the year the QLE is in (retirement probably early to mid 2023 ) is in or before the year I turn 65 (Oct 2024)
I can Appeal an IRMAA increse based on a QLE and lower income expected for 2024 I just need to be sure to stay under the IRMAA cliff in 2024

worse case if for some reason Medicare denies the appeal for 2024 IRMAA l(ack of income data?) I pay 4 months IRMAA in 2024
and reappeal IRMAA for 2025 using 2023 QLE and 2024 income data if the Roth Conversions in 2023 pushed us over the cliff.
Post Reply