IRA contributions to reduce AGI and avoid future larger Medicare premium

Submitted by alberto vega on Thu, 2018-11-15 18:14

Wife(W) 67, Husband (H)71 in 2018. Salary Income is $1,500 for W only. No salary for H. Interest, dividends, capital gains with salary will be close to $170,000 in 2018. Therefore in order to avoid additional Medicare increased premium in future years, they are considering
making a deductible IRA contribution for 2018 rather than a Roth IRA contribution for W. to keep MAGI below the Medicare extra premium threshold

1. H can not make any more IRA contributions because of age. Correct?
2. Maximum IRA (Roth or traditional or combination thereof) contribution in 2018 is $ 1,500 only?
3. Can they wait until April 15, 2019 to determine their MAGI to see how close are they to the Medicare earnings limit to
avoid the extra Medicare premium tax, and then determine how much of the $ 1500 they could place in a Roth IRA or a
traditional deductible IRA for wife by April 15, 2019 designated as a 2018 contribution.
4. Is there any way W could contribute more than $ 1500 to IRA’s in 2018 or the only way is to have more Salary for W



Submitted by Alan - IRA critic on Thu, 2018-11-15 22:02

  1.  No TIRA contribution for H, but a Roth contribution is possible. W could make either a TIRA or Roth contribution.
  2. Yes, 1500 is max total contribution for 2018.
  3. Yes, they can wait until that date to make a 2018 contribution. The only contribution that will reduce MAGI for IRMAA purposes is a TIRA contribution that can be deducted. No deduction is possible if W is covered by a retirement plan at work at anytime in 2018. If no deduction possible, then a Roth contribution should be made (if eligible), but MAGI will not be reduced.
  4. Correct, more salary will be needed.

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