Effect of cashing an IRA on my income-related monthly adjustment amounts for Medicare Part B (medical insurance) and Medicare prescription drug coverage
It will. If you cashed in an IRA two years ago, it could affect your premium for this year. To determine your current Medicare Part B or Medicare prescription drug coverage income-related monthly adjustment amount, we use your most recent federal tax return information.
Generally, this information is for two years prior to the year in question. For example, we generally would use your 2010 tax return information for your 2012 premium. We use your modified adjusted gross income (MAGI) from your tax return to determine your premium for one year. Your MAGI is the total of your adjusted gross income and tax-exempt interest income. So, if your premium increased in 2011 because you cashed in an IRA in 2009, your premium could decrease in 2012.
For more information, see Medicare Premiums: Rules For Higher-Income Beneficiaries, call us toll-free at 1-800-772-1213 (TTY 1-800-325-0778) or visit your local Social Security office.
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