Selling your home after 63 can be a punishing Medicare mistake. Why it could cost you thousands in added premiums
View original at finance.yahoo.comSelling your home after 63 can be a punishing Medicare mistake. Why it could cost you thousands in added premiums For many retirees, selling their home is one of the biggest financial windfalls they’ll see outside of work — especially if they’ve owned it for decades, given the rapid rise in home prices…
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IRMAA surcharge becomes a consideration for any home sale occurring after the seller turns age 63, due to the two-year lookback period for Medicare premium determination
80% confidenceIRMAA is calculated based on MAGI and generally includes capital gains, meaning the net profit from the sale of a home can push income over the IRMAA threshold
80% confidenceIRS allows exclusion of up to $250,000 in capital gains for single filers and up to $500,000 for married filing jointly on primary residence sales, provided the owner lived there at least 2 of the past 5 years
80% confidenceCertain home improvements, selling expenses and some closing costs can be added to your cost basis, potentially reducing taxable capital gain
80% confidenceIn 2026, the IRMAA threshold is $218,000 for a married couple filing jointly and $109,000 for a single individual
80% confidenceThe Social Security Administration generally uses income from two years prior to determine current MAGI, meaning 2026 premiums are based on 2024 income
80% confidenceA typical 65-year-old is estimated to spend roughly $172,500 on total healthcare-related costs over the course of retirement
80% confidenceMedian home equity for homeowners age 65 and over was about $250,000 in 2022
80% confidenceMonthly Medicare premiums could rise from above $202.90 to as much as $689.90 under the highest IRMAA tier
80% confidence