Is Medicare just one room in your house?
October 25, 2026
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Show Notes
Eddie and Betty's Conversation
Welcome to The American Retirement Advisor podcast. I'm Betty, Eddie's here with me in the studio today, and we are talking about something that I think a lot of people are going to recognize right now because it is that time of year.
The mailbox is full of letters from Medicare. The TV ads are running nonstop. It's enrollment season and everyone's brains are completely locked onto their health plan.
Which makes total sense. But the piece we're working from today, Ian Schaeffer's piece, makes this point right at the top that I just loved: Medicare is not your whole house. It's one room in your house.
That image came from his dad, David, at the end of a Fiscal Fridays show. After an entire hour of Medicare questions, that's how David closed. Medicare is just one room. And Ian thought it was worth writing down, which it was.
Because the other rooms are still there whether you look at them or not, right?
And here's the thing that makes this more than just a nice metaphor: they're connected. What happens in one can show up as a bill in another two years later. That's the part that gets people.
That detail is what I want you to explain because Ian gives this specific example and it genuinely surprised me.
So here's the scenario in the article. A couple sells a rental property. Good year, big check. They're happy. Life is good.
As it should be.
Two years later, their Medicare premiums jump by hundreds of dollars a month. And they have no idea why.
Wait, that much? Not like a small nudge upward?
That spike has a name, and the name is IRMAA: Income-Related Monthly Adjustment Amount. Your Part B and Part D premiums are based on the income that showed up on your tax return from two years earlier.
So they sold the property in, say, 2026, that shows up on their 2026 taxes, and then in 2028 their Medicare bill goes up.
Exactly the mechanism. And nobody sent them a memo connecting those two events. The income decision and the Medicare bill feel totally unrelated. They're two years apart.
That is such a frustrating way to find out.
It's not just property sales either. The article flags a big IRA withdrawal, a Roth conversion, and the year your required minimum distributions kick in. RMDs for most people today start at age 73, and that first RMD can be a real jolt if your balances have grown.
And all of those can trigger the same IRMAA surcharge.
Same mechanism, yes. Income goes up in the income room, bill arrives in the Medicare room, two years later, seemingly out of nowhere.
Ian's line on that is great though. He doesn't say it's bad news. He says it's just better news when you see it coming.
Which is such a simple reframe. The math doesn't change. The surcharge is the same either way. But if you're planning around it, you're not blindsided. You're making the decision with full information.
And there's actually a relief valve in here that I did not know existed before reading this. If your income dropped because of a life change, you can ask Social Security to adjust the surcharge.
There's a form for it. SSA-44. And the examples in the article are things like retiring or losing a spouse. The two-year lookback is the default, but it's not the only option if your circumstances have genuinely changed.
I had never heard of that form before.
Most people haven't. The exact rules around when you can use it and how Social Security processes it, that's a conversation for one of our advisors rather than me guessing at the details on air. But the form exists and it's worth knowing to ask about.
Good. Write down SSA-44, ask your advisor. Okay, so Ian's article structures this as three rooms, and we've been in the health room and the income room. The third one is the family room, which I want to spend some real time on.
That's where I think people most often assume everything is handled when it might not be.
Tell me what Ian says because there's a specific thing in there about beneficiary forms that I think is going to make some people very uncomfortable.
Okay so here's the situation. You have a will. You updated it a few years ago. You feel organized. But your IRA, your 401k, your life insurance, those accounts don't care what your will says. They go to whoever's name is on the beneficiary form.
Full stop.
Full stop. So if you filled out that form fifteen years ago after a different life situation, a divorce, a death in the family, a relationship that changed, and you never updated it, that old form quietly undoes your newer plan. The will doesn't override it.
That's the phrase Ian uses and it's kind of chilling when you think about what it means in practice.
It's one of those things where there's no error message. Nothing flags it. The account just goes where the form says.
So when is the last time most people actually looked at those forms?
Probably when they opened the account. And the article's advice is simple: pull them up. All of them. Make sure the names on the forms match what you actually want today, not what you wanted whenever you first filled them out.
And then there's David's question in the article, the one he asked the whole room at Fiscal Fridays, about when people last sat down with their kids and actually talked through the plan.
His read on the room was that everybody had thought about having that conversation. And almost nobody had done it.
Ha, yeah. That tracks. There's a big difference between planning to do it and actually doing it.
And it's not even a complicated conversation necessarily. It's: here's where things are, here's where you'd find them, here's who to call. Just making sure the people who would need to find things know where they are.
That second part feels so practical and also so easy to never get around to.
It's the kind of thing where everyone means to do it and then life happens and the folder stays in the drawer and nobody's had the talk.
Okay so let's actually walk through what the annual review looks like, because Ian lays this out room by room and I think it's a genuinely useful checklist even if we're not going to just read it out loud.
So the health room questions are probably the ones most people already know to ask this time of year: are your doctors still in network, is your drug list current with the right names and strengths and pharmacy. But the one Ian specifically calls out is looking at what a bad year would cost you. Not just the monthly premium.
What does that mean exactly, a bad year?
A year where you actually use the coverage heavily. A hospitalization, a string of specialist visits, expensive prescriptions. The monthly premium is what you pay when nothing happens. But what's your out-of-pocket max? What's the cost if something does happen? That's the number that matters when you're comparing plans.
And do it before December 7, not on December 7. That's in the article too and I appreciate the specificity.
That's the last day of the Annual Enrollment Period. Doing it that morning with a deadline looming is a different experience than doing it in October or early November with time to actually think.
Then the income room review, which connects back to the IRMAA piece.
Know where it's coming from next year, Social Security, pensions, withdrawals. And flag any big one-time events, a property sale, an IRA conversion, anything that's going to spike things in a given year. Because that spike will echo two years later in your Medicare premium.
That two-year delay is what makes it so hard to connect the dots on your own.
Which is why having someone who can model it out in advance is so useful. Our team at American Retirement Advisors can run those scenarios, see what a Roth conversion or a property sale actually does to the IRMAA calculation before you make the move, not after.
Rather than getting the surprise bill in year two.
Precisely. And the specifics of how different income types get treated in that calculation, that's exactly the kind of question to bring to an advisor rather than guess at.
So the big picture here, and this is what I keep coming back to from Ian's piece, is that these three things, healthcare, retirement income, and what you're leaving for your family, they don't get managed in three separate conversations.
The rooms share walls. That's the whole point. And most people, through no fault of their own, are only looking at one room at a time because that's the one that's loudest in a given season.
And right now the health room is deafening.
But you've got the folder out. You're already in the mindset of reviewing things. Ian's point is that this is the best possible moment to walk through all three rooms, not just the one that's sending you mail.
That's a genuinely good argument for doing it now rather than waiting until, I don't know, something goes wrong in January.
That's when the premium bill arrives. October is when you can still make decisions.
There's a nice symmetry in the article too. David describes the annual review as a spring cleaning for your financial plan. And I like that framing because spring cleaning isn't a crisis. It's just maintenance.
You do it so you don't end up with a situation where something leaks from one room into the next, which is Ian's phrase and I think it's a good one.
We have been talking about this for a while now and I want to make sure people know there's a lot more in the full article. Ian has the complete room-by-room checklist, there's more on how IRMAA actually works, and links to deeper reading on the RMD piece.
All worth it. It's not long but it's dense in the best way. A lot of useful stuff in a short space.
And if you want to actually do the walk-through with someone, not just read about it, the number is 602-281-3898. That's American Retirement Advisors, healthcare, retirement income, and inheritance planning all in one place.
The article puts it that way too. Under one roof. Which lands a little differently when the whole episode has been about what happens when your rooms aren't connected.
Ha, look at you noticing the metaphor.
I have my moments.
If you're in the middle of enrollment season right now and it feels like a lot, just start with one room. Pull up one beneficiary form. Look at one plan comparison. And if you want help making sure the rooms are talking to each other, that's what the team is there for. Thanks for spending time with us today.