How Required Minimum Distributions Can Triple Your Taxes (Part 2)

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Medicare premiums are MEANS-TESTED! Let me state that again…Medicare premiums are MEANS-Tested!

What does that mean? Well, simple. You pay higher premiums the more income you have.

“Oh, that’s only for rich people!” You might be thinking. Uh huh. Think again.

In this video I show you how a single taxpayer, let’s say a widow, can have her Medicare Part B and D premiums increase by 100% with only a 20% increase in income.

Think it can’t happen to you?

Well, your Medicare premiums are based on your Modified Adjusted Gross Income (MAGI).

MAGI is ALL the income you receive PLUS your tax-exempt interest.

MAGI is before you use your Standard Deductions or itemized deductions you may claim.

Remember, there is a huge difference between TAXABLE income and Gross Income.

And there is another difference between Gross Income and Modified Adjusted Gross Income too.

If you are ignorant of how this works, you can easily be paying Medicare Premiums well above what you anticipated when you first went into retirement.

Don’t let this be you. Plan accordingly. In fact, start planning in your 50s so you can avoid leaving your surviving spouse a huge tax bill. Because by then it’s too late to change tactics.

At that point, it’s just pay the tax man and hope he or she will be okay.


In part two of our Required Minimum Distribution video I show you the HUGE tax increase that Jane is facing with upon becoming a widow.

Not only do her income taxes (and brackets) increase dramatically but the tax on her Social Security does as well PLUS she now will pay more than double premiums on Medicare Part B and D.

It gets worse too folks.

The longer she lives, the larger her RMDs will be and the larger ALL three of those taxes will be as well.

The funny thing is that Jane actually is living on LESS income than when Bob was alive and yet is paying much more in tax!

Again, it’s not just the tax rates and taxable income you need to be considering. It’s the tax on your Social Security benefits PLUS the increase in Medicare premiums as well.

Unfortunately, now the only way Jane can avoid these increases in tax is to give her RMDs to charity. There is no other way.

Should have done tax planning in her 50s, which is what I call the “Golden Years of Tax Planning.”

I’ll post videos of some strategies on that topic soon.


Once again thanks goes out to Don Pistulka at for his wonderful spreadsheets!

Other important links:


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