SHIFT THE INCOME SOURCE; INVITE “AUNT IRMAA” TO MOVE OUT
With each of you retired from long and successful careers in the world of business, you’ve been blessed to be able to enjoy a satisfying standard of living as a couple. Then, some five years ago, an inheritance you received proved more than sufficient to refurbish your home to make “aging in place in style” a reality. Meanwhile, your husband, by taking on some consulting work a couple of years ago, supplemented your income stream, allowing you both to continue postponing taking any withdrawals from any tax-deferred accounts.
Much to your dismay, you realize (after reading endless online pieces on the subject and one tearful session with your tax advisor), 2027 might prove to be a “pay the piper” time for you from a tax standpoint. Not only must you (you are four years older than your husband, and have just turned 73) take your first (of course, taxable!) Required Minimum Distribution from your retirement account, you’ve just learned that your monthly premiums for Medicare are likely to triple in 2027.
IRMAA, (Medicare Income-Related Monthly Adjustment Amount), is what you pay in addition to your Part B and Part D Medicare premiums. Since you’re a married couple filing jointly, you’re both going to be paying the surcharge. And, with 2025 having been such a great year for extra earnings, 2027 will be the year the Social Security Administration considers when calculating IRMAA.
While there’s no avoiding taking RMD’s out of your own retirement accounts, your husband can continue deferring his Social Security benefits – and his Required Minimum Distributions.
Meanwhile, consider using your housing wealth as a “standby” income resource. With reverse mortgage proceeds classified as loan advances rather than as income, you will have a way to fund any needed or desired lifestyle needs without inviting “Aunt IRMAA” to be a permanent guest in your home!
https://mutualreverse.com/david-garrison
David Garrison, NMLS ID 1595194. Mutual of Omaha Mortgage, Inc. dba Mutual of Omaha Reverse Mortgage, NMLS ID 1025894. 3131 Camino Del Rio N 1100, San Diego, CA 92108. Indiana-DFI Mortgage Lending License 43321. Michigan 1st Mortgage Broker/Lender/Servicer Registrant FR0022702. These materials are not from HUD or FHA and the document was not approved by HUD, FHA or any Government Agency. Subject to credit approval. For licensing information, go to: www.nmlsconsumeraccess.org
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