Ask Rusty – Will inheritance money affect my Social Security?

Published 12:00 am Saturday, March 27, 2021

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Dear Rusty: I will turn 66 this year and am considering claiming my Social Security. I have already applied for Medicare. My parents passed on several years ago, and the estate will probably settle this year. I would like to know if my inheritance money will have any effect on my social security benefits. If so, how? Signed: Wondering Heir

Dear Wondering: No, your inheritance money from your parents’ estate will not affect your gross Social Security benefit in any way. Your monthly SS benefit is based solely on your lifetime earnings record from working, and income from other sources is not counted when computing your Social Security benefit amount. But if you claim your benefits and have your Medicare Part B premium deducted from your Social Security payment, it’s possible your inheritance could affect your Medicare Part B premium amount, thus lowering your net Social Security payment. 

Most Medicare beneficiaries pay a standard premium of $148.50 per month (2021 amount) for Part B, which is coverage for doctors and other outpatient services. But there is also a special provision known as “IRMAA” (Income Related Medicare Adjustment Amount) which adds a supplemental amount to the standard Part B premium if your “provisional income” from all sources exceeds certain levels. Your “provisional income” would include income from all sources, including any money you receive from an inheritance, any tax-advantage investment withdrawals, tax free interest and half of the Social Security benefits you received during the tax year. The name for this is your “Modified Adjusted Gross Income” (MAGI), and the clip levels which cause IRMAA to affect your Medicare premium are different depending on your IRS filing status. 

If you file your income tax as “married/jointly” and your MAGI is over $176,000, then IRMAA will apply and you’ll pay a higher Medicare premium thus reducing your net Social Security payment (if you file as a single, the clip level is $88,000). IRMAA can cause your Part B premium to go to anywhere from $208 to $505 per month, depending upon how high your MAGI is. Note that your Medicare premium for the current year is determined by your MAGI from two years prior, so if that inheritance money is reported on your 2021 income tax return, it would be your 2023 Medicare premium amount that would be affected. And the higher Medicare premium would self-adjust back to a lower level if MAGI for subsequent years are below the IRMAA level. 

The other way your inheritance might affect you is through income taxes on your Social Security benefits. If your MAGI exceeds $32,000 filing as married/jointly ($25,000 if single), then 50% of your Social Security benefits will become part of your taxable income. Or if your MAGI is more than $44,000 filing as married/jointly ($34,000 if single), then up to 85% of your Social Security benefits for the tax year will become part of your taxable income at your standard IRS tax rate. 

The bottom line is this: Your gross monthly Social Security benefit amount will not be affected by your inheritance, but if your inheritance increases your Medicare Part B premium your net SS benefit will be temporarily lower. And the inheritance may also influence how much of your Social Security benefits are subjected to income tax.

This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website ( or email us at