A newly introduced Medicare income scale can make it more expensive to pay for Parts B and D when they go into effect in 2018. But newer reports, such as this one from Investment News, as are saying that it may make sense to use a reverse mortgage for Medicare surcharges in the future because they can potentially help homeowners protect their savings while also covering any new surcharges.
To balance Medicare, congress has gone through hoops. The result is the income-related adjustment amount, otherwise called the IRMAA. It's a surcharge that's based upon your average income and that determines what out-of-pocket costs are assigned to beneficiaries.
This new law is used by Social Security to decide what Medicare surcharges are paid from the top three modified adjusted gross income thresholds. In the future, experts say that this could mean a lot more beneficiaries are going to be paying surcharges based upon the highest levels of this scale.
Investors say that one strategy involves structuring retirement income so that cash flow is at a maximum but is not included in the MAGI calculation. One method of doing this is by using a reverse mortgage. That's because the proceeds of these home loans are tax-free and are not counted as income, and therefore are not included in the MAGI calculation and cannot result in increased Medicare surcharges.
When making a decision related to your savings and home equity, always seek the advice of an experienced financial advisor. Carefully consider what pros and cons exist with each situation and whether or not there are other alternatives that you may explore before deciding that one option, such as a reverse mortgage, is your best bet.
The benefit of these loans are that they are based upon your home equity and not your income or credit score. Provided you meet the qualifications and are of the age of 62 or older, you can get approved for a loan that does not have to repaid until you die, when the sale of your home tenders the balance due. It's this uniqueness that may make these a good supplement for tendering costly future Medicare surcharges.