Social Security Report

Q & A

My income is very low. Why is Medicare telling me I should pay a higher premium?

Complete Question: Merry Christmas to me! Medicare just sent me a letter that says my income is so high, I need to pay a higher premium. That does not make any sense. I retired in 2013, so my income is very low now that I only have my Social Security benefits. What should I do?

Answer: There are higher Part B and Part D premiums for higher income beneficiaries. The problem is that income fluctuates, especially around retirement age. The Social Security Administration is looking at your last income tax return when they determine if you are a “higher income beneficiary”. It would make sense that for most people right now, that last income tax return would be the one filed in early 2014 for 2013 income. Therefore, if you retired in November of 2013 and your income in 2013 until retirement was $90,000, you would be considered a “higher income beneficiary”. Then say your Social Security benefits only add up to about $20,000/year in 2014. In this case, Social Security does not require you to pay a higher premium; however, they do want you to report that you had a life changing event (in this case, a job loss). You can do this by filling out the form “SSA-44”. You can also use this form for other life-changing events that reduced your income (i.e. death of a spouse).

Notice: If you have additional questions about high-income Medicare premiums or any Social Security questions, please send them below. If you would like to discuss your situation privately, you can email cmiles@amac.us. Please do not send personal identification information such as Social Security numbers.

This posting is presented for informational purposes only and does not represent legal or financial guidance. Any opinions or interpretations presented are either those of the original author or, in the case of articles authored by the AMAC Foundation, are the opinions of AMAC Foundation staff, originally trained and accredited by the National Social Security Association (NSSA) and certified via the AMAC Foundation. Any links included in the article are valid on the posted date; socialsecurityreport.org cannot guarantee the duration of the links’ validity. NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (https://amacfoundation.org/services/) or email us at ssadvisor@amacfoundation.org. Because we are a non-profit organization, there is no charge for these services.