Retired federal employees with pensions and $890,000 in TSP accounts may incur hundreds in annual IRMAA fees due to lost hold-harmless protections.
A retired federal employee with $890,000 in a Thrift Savings Plan (TSP) discovered his pension disqualified him from the Medicare IRMAA hold-harmless rule, leading to unexpected surcharges. Those paying Part B premiums directly to CMS, rather than via Social Security deductions, lose this protection and face higher costs annually.
Federal retirees, including GS-13s with FERS pensions and steady Social Security income, often assume they are shielded from income-related monthly adjustment amounts (IRMAA). However, the hold-harmless provision does not apply to them, resulting in premiums hundreds of dollars higher than peers with similar income. Many only learn of the discrepancy after surcharges are locked in for the year.
Options to mitigate IRMAA include filing Form SSA-44 for reconsideration, switching to direct Social Security deductions for Part B premiums, or executing Roth conversions before required minimum distributions begin. The issue has gained attention in federal retiree forums and Medicare planning discussions.