Okay, we’re going to go ahead and get started. Thanks to all of you that have joined. My name is Kim Kennedy and with me today is Malcolm Horn and we are financial consultants with Alliant. We get the question often, do we actually work for the credit union and we do. We happen to work in the Alliant Retirement and Investment Services Department of Alliant. Both of us are based in Denver. We have offices in Lakewood and also the Denver Tech Center. If you’re joining from another state or even in Colorado, we’re happy to do a virtual appointment with you. Um, Malcolm is going to be walking you through the nuts and bolts of the Irma webinar today. We will take all of your questions at the end, so feel free to enter those into the chat or Q&A box at the bottom of your screen. You will receive a follow-up contact from one of us after today’s event just making sure your questions got answered and seeing if you need any help with your retirement planning or Irma planning. Uh we do have a couple more webinars coming up.
Uh Tuesday, June 30th, we’ll be doing tax planning, just talking about how taxes change for you in retirement and just making you aware of that. And then we have our next one in July, which is Thursday, July 16th, Roth conversions. Just explaining to you how a Roth conversion works, how that can help you from a tax planning perspective and even an estate perspective. We have other resources. There we go. So, Malcolm and I aren’t the only financial consultants at Alliant doing webinars. Our colleagues across the country are also doing webinars. If you go to our web page and then click on the events page itself, you will see all other webinars that are being conducted across the country. You are free to sign up for any of those. If there’s a topic that’s interesting to you, feel free. We produce an in-house podcast on the podcast page of our our website. We keep all the historical ones out there. So, if there’s a topic you’re looking to get smart on, check that podcast page. you may find uh a recording about something you’re interested in. And last and certainly not least, our website and blog both have just a wealth of information on financial topics. So again, if you’re trying to get smart on something or verify a point on a specific topic, that might be a good place for you to go. And with that, I’m going to turn you over to Malcolm. He’ll walk you through the Irma presentation. And thank you for spending part of your day with us.
Thank you very much, Kim. And so you might be asking, well, why are we doing why are you doing the webinar on Irma? And the real reason is we want to come in and make sure you’re educated on what Irma is and how it relates to Medicare because what we’re finding more and more people getting, you know, being affected by Irma and they’re saying, “Well, my Medicare Part B and D premium went up. Why was that?” And so we’re finding that Irma is causing your Medicare premiums to increase more than health care. And so today’s webinar, this is today’s agenda. We’re going to talk about what is Irma, what determines Irma, what counts towards modified adjusted gross income, which is a calculation that Irma looks at, what is excluded from MAG uh modified adjust gross income, what are the MAGI income brackets for part B and D premiums, how to appeal, strategies to reduce modified adjusted gross income, and also discussing key takeaways and actions. steps. So, this is today’s agenda and again I just want to make sure we are not going to be talking about products. We’re not talking about supplements when it comes to Medicare. Today’s webinar is purely educational. So, let’s jump off. What is Irma? Irrma stands for income related monthly adjusted amount. So this is an additional premium that you pay depending on the amount of income you have coming in for the year. So it’s affecting high income beneficiaries or people high income people that are receiving Medicare. It’s calculated using your modified adjusted gross income from your tax return. And it’s always a 2-year look back. So come 2027, they’re going to be looking at what your income was in 2025 to determine what your part B and D premium are going to be. And this took effect, Irma took effect in 2007. So let’s talk a little bit about the history of Irma because prior to 2007, Irma did not exist. Now 2007, they came in and said, “Hey, we’re going to create Irma and based on a person’s income, you’re going to be paying more into part B and D when it comes to Medicare. So as an individual, the lowest bracket started once you reached 80,000. If your income was above 80,000, your part B was going to go up. as a joint 160. In 2011, they added part D increases. So again, your part D, which is prescription drug, they came in and say, “Hey, let’s add part D and increase that also based on what your income is.” In 2011 to 2018, they came in and decided, hey, you know those brackets that cause people to pay more for part B? Let’s not increase those anymore. So, you saw what is that about 7 years of that income not increasing. In 2019, they came in and added a sixth bracket. So, they added a top tier. So, anybody over 500,000 is individual and over 750,000 for joint. So, they added a sixth tier. And then in 2019, they came in and started increasing the brackets again. And there’s no been there’s not really been a rhyme and reason why they’ve been increasing it. But the good thing is they’re increasing those brackets compared to 2011 to 2019 where those brackets stayed exactly the same. Now they look at to determine what your part B and D premium is. They’re looking at something called modified adjusted gross income. And social security uses this modified adjusted gross income to determine what your IMAR charge is. Now, it’s not a standard line on your tax return. How they determine this? They look at your adjusted gross income, which is line 11, and they look at tax exempt interest, which is line 2A on the 1040. This is what’s going to determine your modified adjusted gross income for the year. Now you might come across modified adjusted gross income is looked differently depending on what you’re applying for. It’s interesting how many like this modified adjusted gross income is calculated different depending on what you’re applying for. But when it comes to Medicare, these are the two items that they look like look at to determine what your part B and D premium are going to be.
Now what’s counts towards modified adjusted gross income? Taxable income increases this number. So if you’re working, you have the earned income or self-employed, that’s part of your adjusted gross income. If you’re taking money out of your IAS, 401ks, it’s a part of the equation. taxable portion of your social security which is 85% of that up to 85% of your social security is included in this number. So it’s the taxable portion. Some of you may let’s say only 50% of your social security is subject is subject to tax. So they’re looking at the taxable portion. If you’re receiving passive income, capital gains, interest, dividends, munipal bond interest, this is part of the equation. If you do conversions, that’s part of your modified adjusted gross income. Rental income, your taxable portion of rental income is all part of this modified adjusted modified adjusted gross income. Now, what’s not part of your modified modified adjusted gross income is Roth Roth withdrawals. Again, as long as you’ve had that account for five years, you’re over 59 and a half, it’s considered a qualified distribution. All earnings and interest come out tax-free. It’s not part of your modified adjust gross income. If you’re taking qualified distributions from a health savings account, again, it’s not part of the equation. Let’s say you’re taking money out of a life insurance that has cash value. Again, it’s not part of the part of the modified adjusted gross income. So, these are items that currently not not part of the modified adjusted gross income.
Here’s the chart that you can look at to determine what your part B is. Now, remember, it’s always a 2-year look back. So, again, in 2026, they were looking at what your income was in 24. In 27, they’re going to be looking at what your income was in 25. These bracket do increase a little bit. For example, this past year it increased around the single bracket increased about $3,000. So last year was 106, now it’s 109. So for example, if you’re a single person and your modified adjusted gross income is $140,000,
that means that when it comes to part B, your part B is 405. this amount if you’re collecting social security will be automatically deducted from your social security check. You’ll get a letter saying, “Hey, by the way, your part B is this amount now and this is what’s going to be deducted from your social security check when you receive receive it.” Now, this is the same way for part D for prescription drugs. If you’re modified adjusted gross income is $140 and you’re single person, your premium now is $37.50 50 plus whatever your your Part D premium is. So, for example, if you you have a prescription drug plan and it’s costing you $14 and now you’re in a higher tier for Irma, it’s $14 plus this additional $37.50.
And again, sometime in October, November, we’ll know what the brackets look like for 27 when they’re looking at income in 25. So let’s let’s run through an example. George and Martha both are retired. They’re collecting they’re receiving Medicare part B and D and in 24 their modified adjusted gross income was 205. At the end of the year, they received unwanted capital gains from some mutual funds that they own, which added additional 50 $15,000 to their modified adjusted gross income. So now their modified adjusted gross income is $220,000 for in 24. Now in 26 they get a letter saying, “Hey, by the way, your part D and pre part B and D premiums are increasing to by $81.14 per $14 per person.” And they’re like, “Well, why?” Well, they forgot about what happened in 24 in regards to that unwanted capital gain that increased their modified adjusted gross income. So now because of that income, they’re paying an additional $2,300 for Medicare. So the thing when it comes to Irma and these brackets of Medicare, if you go over this bracket by $1, your Part B premium increases. So they’re at 220. Based on the 220, we know their part B premium is 284 and they’re they’re going to see a part D or this is sorry part D part B increase to 2.84. When it comes to part D, they’re going to see an additional $14 increase to their part B. So, it’s something just to be aware of that says, “Hey, if we go over these certain limits, we’re going to get a letter two years from now that says, hey, by the way, you are over this modified adjusted gross income, so your premium increases.” Now, there are some strategies to kind of look at to help you reduce your modified address gross gross income. Now again in 26 we don’t know what they’re going to look at because whatever our income is in 26 it’s going to catch up to us in 28 20 in 2028 they’re going to say hey what was your modified adjusted gross income in 2026 and that’s going to determine what your part B premium is. So in 26 it’s looking like hey well we know what they were looking at in 24 and that’s a good bracket to look at and try to understand is there a way to kind of reduce and get in these lower tiers. So there’s something called a qualified charitable distribution. This is available for anybody that’s over 70 and a half. You can come in and give money out of your IRA and give it directly to charities. So, let’s say that you’re 75 years old and you’re subject to a required minimum distribution of $20,000. You can decide, hey, I’m going to give this money, $20,000 to a charity. So, instead of taking my RMD, I’m going to give 20,000 to a charity. And this money then does not land on your modified adjusted gross income. It satisfies your RMD for the year. And so it’s a way to reduce your taxable income for the year because if you come in and say, “Hey, I’m just going to take my RMD and I’ll I’ll eventually give it to a charity.” Well, if you took your RMD and put it in your savings account, that’s 20,000. That’s added to your taxable income. Where you can come in and say, “Hey, let’s take my RFD, give it to a charity, satisfy my RD, and I still give money to a charity, and I’m saving taxes. I’m reducing my tax liability.” So, that’s one way to reduce your modified adjusted gross income if you’re subject to RMDs. Another thing you could do is looking at doing Roth conversions. Roth conversions is where you’re coming in and taking money out of a traditional IRA and you’re moving it over to a Roth IRA. Yes, that that conversion you do becomes taxable, but eventually what you’re doing is you’re helping reduce that money that you have in the traditional IRA, and it’s helping reduce what you’re going to be required to take out of the IAS 10 years from now, which is also helping you reduce your tax liability in the future. And best times to do this would be, let’s say you retire at 65 and you’re going to delay social security till 70. Maybe those are good years where you really don’t have any income at all and you’re able to convert at a lower rate, lower tax rate, or maybe you’re self-employed and you had kind of a a crappy year and you have very low revenues. Maybe those are good years to do Roth conversions. So, there’s always good times to say, “Hey, this is probably a good time to do a Roth conversion, reduce the money that I have in my IRA, which is going to help me reduce what I’m going to be required to take out down the road.” Now, I’m not saying everybody should do a Roth conversions, but it’s something to consider to help you think about the future and reduce some of the future tax liability that you’re going to have. Tax lost harvesting has to do with capital gains. So, for example, the easiest example of tax loss harvesting is this. Let’s say that you own Coca-Cola. You purchased it for $10,000. Coca-Cola went down and now it’s $7,000. You sell Coca-Cola and you turn around and buy Pepsi with that $7,000 now is being used to buy Pepsi. you’re still invested within the market and you have you’re invested in two very similar companies and usually companies in the similar sectors perform very similar. So by doing so now you have $3,000 of capital losses that you can use to offset capital gains to help you reduce your tax liability. And you can also take up to $3,000 of capital losses each year. So, so there are ways to come in and say, “Hey, I have $60,000 of capital gains. I need to reduce that.” So, by capital loss harvesting, you’re helping yourself reduce these capital gains, which is ultimately helping you reduce your taxes, which ultimately is helping you reduce your modified adjusted gross income for the year.
Managing withdrawals is really important when it comes to retirement. Again, you retire, you know, you want to have a specific amount of income coming in, but you know, if I take out this amount of money out of my IAS to live on, I’m going to be going into a higher tax bracket and I’m also going to be crossing the Irma brackets. So maybe managing withdrawals is really important because you come in and say, “Okay, I’m going to take some money out of my I’m going to take some money out of my savings and I’m going to take some money out of my Roth IAS to get you the income that you need, but also keeping yourself below these Irma brackets. So managing the withdrawals with all these different accounts is really important cuz I know a lot of people say, “I’m going to retire. I’m just going to live on my cash. Once I deplete my cash, I’m going to use my IRA. Well, I think there’s a better way to manage that because if you’re in a low tax bracket, why not take money out of your IRA, pay little tax on it, and you’re ultimately helping reduce your RMDs down the road.
Also, timing large income events. you know, if you’re going to sell a business, you know, see if there’s a way you can spread that out over a certain amount of years or you know that you’re going to sell real estate at some point. Does it make sense to sell it sooner while you’re in a lower tax bracket? You know, kind of think about the future a little bit and say, “What am I going to be faced with if I have a business or have rentals or if I do decide to sell my home down the road? What kind of liability am I going to have if I sold the house? So start thinking about those large income events.
Also make sure that once you reach 65, maybe it makes sense to contribute to a 401k and reduce your taxable income to lower your adjusted gross income. Contributing to traditional IAS will help you reduce your taxable income. Does it make sense? It may. if it’s going to help you reduce your modified adjusted gross income and stay below certain tiers. Now, there are certain things, lifechanging events that will allow you to complete a form SSA-44
which will allow you to ask for a lower part B and D premium. For example, in say in 26 you do decide to retire and you’re going to collect social security Medicare and you’re going to collect social security. You’re going to collect Medicare. Medicare is going to automatically come back and say, “Hey, in 24 your income was this amount and now your part B is this amount.” You can complete this form that says, “Hey, look, I’ve retired. I had no longer have this income.” And you can appeal this process. Now, you’re going to have to do it in 26 and you’re going to have to do it in 27 because remember, it’s always a two-year look back. So, if you retire in 26 and have a low income year, you know, you’re not going to see that kind of roll off until 28. In 28, they’re going to look at your income in 26 and say, “Hey, your income is low. This is what your part B is.” But if you retire in 26 and collect Social Security and Medicare this year, they’re always going to be looking at 24. So, retirement, death of a spouse, divorce, loss of a pension or incomeroucing property, employment settlement payment, sale of a business, you sold a business, you can appeal that and say, “Hey, I just sold a business like reduce my premiums.” There are certain things that, you know, if you do a Roth conversion and you went over the brackets by a dollar and you try to appeal it, they’re going to say, “Sorry, you know, you you did a conversion. We’re not going to lower your premiums.” Or you sold some real estate that cause you to be have much higher capital gains in that year. Those are certain things that you’re just not going to be able to appeal. But again, there are certain things to appeal and you complete that SSA.44 form to do so.
So, some key takeaways and action steps. Make sure you’re reviewing your modified adjusted gross income. Now, of course, you can’t change what happened in 24 and 25 at this point. So, it’s 26. Understanding what your modified adjusted gross income is in 26. And if you are kind of really close to those brackets based on the 24 numbers we have, then look at ways how do we reduce the modified adjusted gross income? Because again, you go a dollar over that bracket, they’re going to hit you with these higher Medicare premiums. Make sure you’re looking at a calculator. Consult with your professional and start planning to reduce some of the modified modified address gross income. And it might be a situation where at the end of the day, you have to pay higher premiums. There’s nothing wrong with paying these higher premiums. I just worked with someone yesterday. they inherited IRA and they said well we’re just going to take the required minimum distribution out and that’s fine and dandy but in six years or sorry in 10 years when that IRA has to be liquidated all of a sudden they have to liquidate the whole thing in one year and it causes them to be in a 37% tax bracket where it makes more sense to kind of spread it out stay within a 24% tax bracket pay a little bit or for part B, but it reduces we can reduce the tax liability much more that way. So sometimes it’s it’s one of those things. Yeah, you’re just going to have to pay more for part B and D based on some of the planning future planning you’re trying to do when it comes to your financial situation. Now, here’s an example. Let’s talk about an example. John and Mary Smith, they came and saw us. They’re both retired. They’re both retired at 65. One has a life expectancy. Baby has some health issues. Mary has a life expectancy of 95.
They’re both receiving social security. Mary’s receiving a pension also. So, you know, total of 60 almost a little bit over 100,000 of taxable income. They have money in IAS and they have money in savings. In other words, a little bit over 2.5. they spend $4,000 a month. You know, you add in healthcare, $500 per person, that’s what they would spend. And then we’re looking at federal and state taxes for their situation. So, once we put these pieces together, we already know that based on their social security and the pension they’re receiving, they’re not even spending that amount of money. But one thing that kind of surprised them was that at 73 when they’re required to start taking money out of their IAS, their combined required minimum distribution was $115,000, which they were like, “Wow, did not know that.” So now all of a sudden, the IRS comes in and says, “Hey, we’ve been giving you, you know, all this benefit all all of this time at 73 or 75. We require you now to take money out.” So you come in and add $115,000 to their taxable income. So right now they’re in a 12% tax bracket, but at RMDH now they’re in a 22% tax bracket because of required minimum distribution. When you look at this, you break this down, their modified adjusted gross income prior to RV age is 135,000. So based on that number, you’re just paying normal part B and part D premiums. But when RMDs kick in, they’re modified modified gross income jumps to 241,000, which means based off today’s numbers, they would be in a second tier bracket. So their part B premium and D increases for that year.
So, it’s something to be aware of now. And that’s where it comes into, well, does it make sense to do Roth conversions? If we did a Roth conversion, basically paid some taxes today, is that going to help you down the road? And that’s what we’re able to model. We come in and say, “Hey, if we stay within a 22% bracket, convert over the next 6 years, does that help your situation?” So our model basically kind of lays out this is the amount you can convert gives us the tax savings. So for this situation they’re able to save almost $400,000. That $400,000 is money that you get to keep that you are not giving to the IRS by doing these conversions. It helps reduce your tax liability, but also at the same time, yes, we might be paying a little bit more upfront, but in the end, when we look at R&D, now we’re at that 2020 209 level. We’re below those Irma brackets. So, by doing some of this upfront leg work of doing conversions, getting in a lower tax bracket helps us down, helps us into the future. So we’re able to model this and really analyze does it make sense or not.
So I’m happy to answer any questions for you today. I mean that again this webinar is not that long but hopefully we got a lot of good questions to able to help you. I mean we’re here Kim and I have been doing this for over 20 years. We probably have over 50 years of experience helping people plan for retirement. We can help you with so many different things. Social Security, pension, cash flow management, taxes, Roth, you name it. We can we’re here to help you with multiple things. So, with that, let’s let’s kind of dig into some questions that people might have regarding Irma. Do you want to start the poll first, Malcolm? Yeah. Yeah. Yeah. Yeah. If you would like us to schedule a meeting, if you like to schedule a meeting with one of us to really kind of dig into your own personal situation, I’m going to post a poll that you can indicate, yes, I’d like to schedule a meeting. Let’s really dig into my own situation to look at uh am I going to be affected by Irma and is there certain ways that we can reduce tax liability? So, I just posted that. Kim, did you see that come up on my end? It came on and then went off. So, I don’t know if you should try it again. Yeah, let me try it again. That was weird. First question is, will the slides be sent? And no, we’re not allowed to send out the slides, nor do we record. So, that’s just part of the compliance process. So, still there, there’s your poll. See it now. Okay. So, first question. I’m assessed Irma for 2026. Since my prescriptions are included in my plan C Medicare, Medicare Advantage, should I also be excessed the extra $14? You should be. And it’s probably automatically just coming out of your Social Security check. Even on Medicare Advantage, well, it’s a part D. No, it’s a plan. It’s a C. It’s Medicare Advantage. It’s plan C. That it’s a MAPD. So, a Medicare advantage that includes prescription drugs. I don’t I bet you anything. I mean, part C is just a combination of B and D. So, I bet you anything it’s built into this part C if you’re already going up. So, I mean, yeah, double check. I mean, that’s a really good question. I I would say yes. But I would ask the the person that the company that’s offering the part C and see if it because a lot of times they just pass that on to you and you don’t even really I mean, you may recognize it, you may not recognize it. Great. Okay. So, next question. What’s your take on doing systematic Roth conversions prior to RMD age knowing that I’ll be increasing my Irma premium search charges in those windows of opportunity years. However, in the big picture, you are reducing income tax exposure. Not an easy one-sizefits-all question, but really realistic for many IRA and 401k quote millionaires. Yeah, I mean I’m all for it. I mean the reality of it. If there’s any way to reduce the tax liability in the future, I mean that’s that’s the whole planning that we do is looking forward. I mean you might go see accountant. The accountant is always looking backwards. They’re saying hey what was your income? Let’s do your taxes. Where we’re coming in and saying we need to look forward because we know that taxes are not going away. So if there’s ways that we can reduce your tax liability today for the future, it makes a lot of sense. And yeah, if we mean if we have to pay a little bit more for part B premiums, so be it. It’s probably still going to be very beneficial when you look at this overall picture. Again, my screen is still up in regards to the planning aspect, but when you look at this, when a spouse passes away, they’re going to jump to a 24%. So even if taxes stay the exact same over the next 20, 30 years, when one spouse pass away, if you’re married, your taxes will go up. So, but you know, considering the amount of deficit the US has, you you someone would have to argue this as our taxes are going to go up at some point. I could be wrong and I hope I am wrong, but you know, anyways, go ahead. Okay, next question. When does Social Security or Medicare or the IRS release the 2027 Irma income brackets? From a tax planning perspective, such as modeling Roth conversions, should one assume the Irma brackets will increase in the next two to five years based on guesstimating an inflation or CPI factor? I do believe that in early November is when they’re released. Yeah, they’re going up by some CPI inflation factor. I don’t know if it’s same one they do social security with or not, but yeah. And it really they just I mean last year they just did 3,000 flats. So I mean yeah a lot of times when we planning that it is waiting till November December to understand what those brackets are to do a little bit better planning. Yeah. Uh with the two-year look back how does that affect when one’s spouse passes
regard well it’s a life-changing event. So, you would apply the SSA-44 form when one spouse passes away. It’s a life-changing event. So, does your income went down? Yeah. Okay. Is this look back something that applies every year or does it just apply at the start of collection of Medicare? It happens every year. It’s always a two-year look back. No matter how old you are, you could be 90 years old, they’re still doing a two-year look back, right? So, as your income might change, then maybe you can hopefully work yourself out of Irma or at least end up in a lower Irma bracket. Does the sale of a primary residence with cap gains count as a qualifying event in order to appeal? Nope, not at all. I mean, with sale of primary residence, you have 250 per person. So, it’s anything above that amount which would be added to the capital game. But again, it’s not a uh a qualifying event to appeal. How much of a reduction of business income qualifies for Irma relief on the SSA44? What percentage reduction? I mean, anything that’s anything that reduces below those tiers, I guess. I mean, how much of the reduction of business qualifies for relief? Yeah, that’s a really good question. If so, I think the question has to do with like if you’re a self business, you’re self-employed and your income went down one year, but then next year it increases again. I It’s kind of a year. I think you’ll just ride that Irma train from year to year. On the low income years, you’ll be less. Yeah. Okay. If I submitted an SSA44 in early year 2025 when I retired in late 2024 and Social Security granted my appeal, can I submit another one later this year once I receive the letter for Medicare for next year stating my life changing event was retiring in 2024? Yeah, you’re going to have to you’re going to have to appeal every year for the first for the so if you retire in 24, you’re going to have to appeal in 25 and you’re going to have to appeal in 26 because it’s again it’s always two-year look back. So until you get to the year where you’ve actually retired, Medicare is still going to pick up those years while you’re you were working. Yep. My husband sold a business and we had to do that. We had to go in and appeal it two years in a row to get past that. In general, when considering IRA withdrawals, which can be more costly, Irma, which can be more costly, Irma increases or going into a higher tax bracket? I don’t know. You We would just have to look at your situation to kind of determine what tax bracket you’re in and and what Irma bracket you would be in. So, that I mean, that’s kind of a Did you want to add some? I was just going to say and what will happen down the road, right? A lot of people are like, “Oh, I don’t want to pay Irma. I don’t want to pay Irma.” But if you do some IRA withdrawals or Roth conversions and you eat a little Irma increase now, but by the time you get to RMD age, maybe you don’t. Or maybe you only bump one level. So you got to look at the big picture not only now, but in the future as well. Um, Roths are tax-free, but is the interest received on the Roth part of Irma? That’s the beauty of Roths. All earnings and interest come out taxfree. So So no, it doesn’t apply to Irma. Yeah. Yeah. Do they always look back the previous two years or do I have to tell them to reassess for Irma? No, it’s always a two-year look back. I think the reason it’s two years is because people can file extensions on their taxes. So I think just trying to get all cleaned up, that’s why it’s a two-year look back. Um, how do you charge fees to manage my portfolio? Is it a flat fee? Yeah, we always use a uh we use a flat fee. I know there’s other advisors that are out there that do tiered fees. For example, like give you an example. Like let’s say you have a million dollars in an advisory account. Some advisor will come and be like, well, the first 250 we’re going to charge 1%, the next 250 we’re going to charge 75 bips and so on. We charge a specific flat fee on those assets under management. So it’s not a tiered system.
You want to tell them what it is? I don’t know what it is because I don’t know the I mean I don’t I mean again all our recommendations are all based on the planning we do like our our our we come in and do planning understand your situation and then we’ll provide you kind of recommendations and based on those recommendations that are kind of tied in with the planning your fee is going to vary depending on what makes the most sense for your situation. So, I I mean I don’t I mean I can tell you that our fee I’ve never had a client over a 1% pay more than 1% on their account. So, and from there it’s less than that. So, anyways, what will be the single Irma 2026 modified adjusted gross income for 2028? Will it just go up $3,000 every year? We don’t know. I don’t know. Your guess is good as well. No crystal ball what they’re going to do, but in November, we’ll probably know. We usually tell people if you want to be safe, plan, plan based on the numbers that we have knowing that they’ll probably be a little bit more than that.
Um, I have a Medicare advantage and I just looked it up. I pay both A and B Iras. No, there’s no Irma on part A, so that can’t be right. Uh so when Roth conversions raise Maggie and thus Irma, will Irma be reduced in the years when Maggie decreases? Probably not.
Why not? Wait, wait, wait, wait, wait, wait, wait, wait. Sorry, sorry. I reread it. I thought the talking about that. Yeah. Yeah. Kidding. Just kidding. Uh yeah, if you do Roth conversions, ultimately you’re reducing the amount of the money that’s in the IRA, reducing your RMDs, which hopefully reduces your modified adjusted gross income down the road. Yeah. So, as your income and they look at your income every single year. So, if your modified adjusted gross income goes down and it below drops to a lower Irma bracket, then yes, Irma would be less. For tax loss harvesting, does it need to be with a stock or can it be with a mutual fund? And are there restrictions on what you do with what you get when you sell the stock? Yeah. So, capital loss harvesting can be done with mutual funds. And there’s something called a 30-day wash rule. Meaning, if you sell a stock, you cannot buy that exact same stock within 30 days. But after 30 days, you can turn around and buy that stock back. So, as long we had some people during the, you know, the financial crisis when things really dropped that had long-term stocks and we couldn’t get a lot of people to have the stomach to do it. But if you could sell it at a 30% loss, wait one month and buy it again, you had a great tax loss to carry forward for ever most likely. Yeah. Uh the big thing with that is just understanding that it has nothing to do with IAS. That’s nonirra type money without knowing the new tiers for the look back period. Do you just do a Roth conversion and stay under the current? Yeah, that’s kind of what I mentioned. That’s the safe way to do it because we don’t know what the amount of the increase will be. Um, okay. I have a timing question. If you want to start collecting social security in January at the start of my retirement leveraging Medicare, when should I complete and submit that SSA44 so that my deductions starting in early January are not inflated due to Irma based upon my salary when I was working. I mean, I’d be submitting that SSA44 as soon as possible. maybe submit it at the same time you start collecting it because once you I mean you apply and I think you can you can apply 3 months before and so during that same time submit the SS44 I mean you would you change anything would you say anything else? No. Yeah, I’d probably do it right after you apply. Uh, this person is asking what percentage. I think this has to do with the the the flat fee of managing our portfolio. So, I guess I would say it a little bit different than Malcolm. If we are managing your money and it’s in a managed portfolio, we charge 1%. If it’s over a million, we might drop down from there. But generally, we end up diversifying your money’s in different buckets. I mean, maybe half the money is in a product that has no fee and half the money is in a managed account that has 1% fee. So in that scenario, your overall blended rate is a half a percent. Yeah. The whole question. Yeah. And it’s just going to depend on the recommendation. I mean, it it’s kind of like going to the dentist and saying, “Hey, dentist, look at my mouth. Dentist, what’s it going to cost to do a cavity? Well, we don’t know if you have a cavity or not. So why why why should they give you a price to do?” Generally, people people are asking about managed accounts, I think. Okay. And then somebody said I meant part B and part D. Okay. Um, which brainiac in Congress proposed Irma in 2007 in the first place. Lol. I don’t have any. I’m sure there was a brain trust that came up with that. Somebody that thought it was wise, but um probably, you know, although we don’t like to pay it, but you know, we also want Medicare to be around, right? So maybe that’s a way to Yeah. Who I mean I’m not I’m not the best history person, but who was president in 2007?
Where’s my handy Google? Bush. Bush. George W. Bush. Yep. So let’s see. I think there might be some more questions over here. How does one estimate Irma two years out? We already covered that. Uh I guess some of the Thanks for the web info presented. Thank you. St. Does starting a business with its added expense count as a life-changing event. Are the MAGA limits incre? So that’s one question. Does starting a business with its add expense count as a life-changing event? I mean I mean starting a business depending on what your expenses are might help you reduce your income but at the end of the day Irma is all based on income. So Irma doesn’t care if you start a business or not. They care about your income. Yeah. So if the previous year you had a job and you had income and then the next year you start a business and you have less income because of the expenses, I think your Irma would just adjust year to year based on what the Maggie number for each year is. Wouldn’t you, Malcolm? Yeah. Irma has no feelings. She doesn’t care. She All she cares about is what your income is. Yeah. There you go. There you go. Our mag limits for Irma increased annually. Yes, I think we got that too. So, um, okay. So, I think we are good to go. That’s it. So, this is great. I mean, I love all these questions. I mean, yeah. Yeah, I mean the presentation is so much short, but it’s to the point. So, this is great. I mean, we’re able to answer a lot of these questions. So, all right, everybody. We look forward to talking to you in the next uh few days and or next week or so. And um I think we got everything. Did you see something else, Malcolm? Yeah, there was one one more question. Close the corporation. Oh, close the question. Well, read it out loud so people Oh, sorry. Sorry. We We closed the corporation at the end of 23 and continue the business operations as sole proprietor. Our schedule C income is greatly reduced from the corporation income. Does the change of entity screw up the reduction of income arguably for the asset? I mean, it’s a life-changing event. So, you close the business, so I might as well apply. The worst case scenario that they’re going to say is no. Yeah. Yeah. Um, I mean, yeah, worst case scenario, they’re going to say no. So, yeah. All right, cool. All right, everybody. Thank you very much. We look forward to talking to you soon. Have a great day. Bye.