Will house sale profits from downsizing affect my Social Security or trigger IRMAA for Medicare?

theres a thing called IRMAA (income related monthly adjustment amount) for Medicare. its when they charge u more for Medicare part B if ur income is higher. the $$$ from selling ur house mite count depending on how much profit u made from when u bought it

The proceeds from selling your home generally won't affect your Social Security retirement benefits. Once you're at full retirement age (FRA), there's no earnings limit that would reduce your benefits. However, IRMAA (Income-Related Monthly Adjustment Amount) for Medicare is definitely something to consider. This is an additional premium amount added to your Medicare Part B and Part D if your income exceeds certain thresholds. For IRMAA purposes, the IRS looks at your modified adjusted gross income (MAGI) from 2 years prior. The capital gains from selling your home could potentially increase your MAGI for that tax year. The good news is that if your home was your primary residence and you've lived there for at least 2 of the last 5 years, you can exclude up to $250,000 ($500,000 for married couples) of the gain from your income. If your gain falls within these exclusion limits, it wouldn't affect your IRMAA. I'd recommend talking with a tax professional before selling to understand how your specific situation might be affected.

The government is ALWAYS looking for ways to take more of our money!!! Social Security doesn't care about your house sale because it only counts EARNED income when you're under full retirement age. But Medicare with their IRMAA surcharges will ABSOLUTELY hit you with higher premiums if your income goes up too much in one year!!!! This is how they punish seniors for being responsible with money. My premiums went up $176 PER MONTH just because I had to take a large IRA distribution one year for home repairs!!!! It's HIGHWAY ROBBERY!!!!!

The IRMAA thresholds for 2025 aren't officially announced yet, but based on the 2024 figures, the first tier starts when your MAGI exceeds $103,000 (single) or $206,000 (married). At that point, your monthly Part B premium increases by about $69 per person. The key factor here isn't the house sale proceeds itself, but your capital gains. So if you bought at $98,000 and sell for $315,000 (rough calculation from your numbers), your gain would be $217,000. But with the $250,000 exclusion, none of that would count as taxable income assuming this is your primary residence. However, if you've been deprecating part of the home for a home office, or if it wasn't your primary residence for 2 of the last 5 years, different rules apply. Also, if you've claimed the capital gains exclusion on another home sale within the past two years, you might not be eligible to use it again. I'd suggest using the SSA's IRMAA calculator or consulting with a tax professional who specializes in retirement planning.

my mom just went thru this last year her house sold for a lot more than she paid back in the 70s but her medicare didnt go up because of that 250,000 exclusion thing... but the money sitting in her account did mess up her eligibility for the medicare savings program that was helping with her premiums so watch out for that too!!

A couple of important distinctions: 1. For Social Security retirement benefits, once you're at full retirement age (which you are at 67), there is NO earnings limit. Your benefits won't be reduced regardless of how much you earn or have in assets. 2. For Medicare and IRMAA: If your capital gains fall under the $250,000 exclusion (which it sounds like they will), the actual proceeds from the sale won't impact your IRMAA. But be careful - if you invest that $215,000 and it generates significant taxable interest, dividends, or capital gains in future years, THAT income could trigger IRMAA. 3. Be aware that having $215,000 in assets won't affect regular Medicare, but it would affect eligibility for Medicaid or Medicare Savings Programs which are means-tested. I recommend tracking your MAGI carefully in the year you sell. If something unexpected happens and you do cross an IRMAA threshold, remember you can file Form SSA-44 (Life-Changing Event) if your income will be lower in subsequent years.

when i tried calling social security to ask about IRMAA i was on hold for 3 HOURS and then got disconnected!!! so frustrating!!! i ended up using claimyr.com which got me through to a real person in about 20 minutes. they have this video that shows how it works https://youtu.be/Z-BRbJw3puU - was totally worth it to actually get my questions answered about how my retirement income would affect my medicare costs

One more thing to consider - IRMAA is calculated based on your tax return from 2 years prior. So if you sell your house in 2025, any potential IRMAA impact would affect your Medicare premiums in 2027. This gives you some planning time. If you anticipate other large income events in the next few years (like RMDs or other investment sales), you might want to strategize the timing of everything to avoid having multiple high-income years that could trigger IRMAA.

To summarize what everyone has correctly pointed out: 1. Social Security benefits: Your house sale won't affect these at all since you're over FRA. 2. Medicare IRMAA: If your gain is under the $250,000 exemption (which it likely is based on your purchase price), there would be no impact on your IRMAA status. 3. Watch out for: How you invest the proceeds could generate taxable income in future years. 4. Timeline: IRMAA looks at income from 2 years prior, so any potential impact would be delayed. 5. Appeals: If you do get hit with IRMAA due to a one-time event, you can appeal using Form SSA-44. For peace of mind, I'd recommend consulting with a financial advisor who specializes in retirement planning before making any major decisions. They can help you structure things to minimize any negative impacts.