Selling your home after 63 can be a punishing Medicare mistake. Why it could cost you thousands in added premiums

For galore retirees, selling their location is 1 of the biggest fiscal windfalls they’ll spot extracurricular of enactment — particularly if they’ve owned it for decades, fixed the accelerated emergence successful location prices.

According to the Joint Center for Housing Studies (JCHS) astatine Harvard University — which utilized information from the 2022 Survey of Consumer Finances — median location equity for homeowners property 65 and implicit was astir $250,000 that year. (1) As a result, selling the household location could consciousness similar cashing successful a lottery ticket.

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However, the transaction could besides trigger a hidden Medicare trap that increases your premiums. Without due planning, you could wage thousands of dollars successful unnecessary healthcare costs.

Here’s what older American homeowners request to cognize earlier pulling the trigger.

Medicare is simply a analyzable strategy with galore moving parts, but successful this lawsuit it’s important to absorption connected Income-Related Monthly Adjustment Amount (IRMAA).

IRMAA is simply a surcharge that tin summation premiums for Medicare Part B and Medicare Part D if your income is supra a definite threshold. In 2026, the threshold is $218,000 for a joined mates filing taxation jointly and $109,000 for a azygous individual. (2)

In practice, IRMAA is calculated based connected your household Modified Adjusted Gross Income (MAGI). It mostly includes superior gains, meaning the nett net from the merchantability of a location tin propulsion your income implicit the threshold, according to the AARP. (3)

So if you purchased your location for $200,000 successful the 1990s and merchantability it for $800,000 today, the resulting superior summation could easy enactment you supra the IRMAA thresholds and trigger premiums.

Depending connected the magnitude of your MAGI, your monthly premiums could emergence from supra $202.90 to arsenic overmuch arsenic $689.90 nether the highest IRMAA tier, according to the Medicare Rights Center. (4)

Selling your location conscionable earlier you suffice for Medicare isn’t a solution. The Social Security Administration (SSA) mostly uses income from 2 years anterior to find your existent MAGI, which means your 2026 premiums are determined by the income you earned successful 2024. (2)

In effect, this surcharge becomes a information if you merchantability your location astatine immoderate constituent aft turning 63.