Something that was instituted in 2003 (I believe) was IRMAA. It is designed to punish those who make/earn anything after retirement in order to prop up Medicare. The short story is that they look at how much income you have, and adjust your medicare payments if you exceed certain threshholds. The point is that the threshholds have been increasing an average of a little over 1% since then, but the penalties are increasing at close to 9%. What that means, is more and more people are going to find themselves paying this penalty as time goes on. The first thresshhold for married joint is $218,000. If you exceed that amount by $1, you get to pay the full penalty for medicare which is an additional $84/month... EACH. So when you start taking those RMDs from your 401k, make sure you don't go above those amounts because you will get punished. Oh, and it is based on your MAGI from 2 years ago. So you were probably earning the most as you approach retirement. The latest increase YOY for the brackets was 1.89%. The penalty increased over 9%.
Government takes WAY TOO MUCH OF OUR ****ING MONEY.
IRMAA is absolutely the most insidious thing the government has come up with since the Alternative Minimum tax.
