The Safe-Money Blind Spot: How CD Interest Can Raise Your Social Security Tax and Medicare Premiums

Moving savings into CDs or a high-yield savings account? The CD is not the problem. The interest is usually taxable income, and that extra income can make more of your Social Security taxable. If your total income crosses a Medicare IRMAA line, it can also raise your Part B and Part D premiums, generally two years later. Not for everyone: it depends on your total income and filing status. In this episode, Michael walks through the chain one link at a time: when CD interest is taxable (even if you leave it in the account), how combined income works, why "up to 85% taxable" is NOT an 85% tax rate, a worked example ($400,000 in CDs at 4% = $16,000 of interest), and when IRMAA does and does not apply. The example numbers are invented and are not a tax calculation. CHAPTERS 0:00 The short answer 0:34 The safe-money blind spot 1:11 Link 1: CD interest is taxable income 1:52 Example: $400,000 at 4% 2:14 Link 2: when Social Security becomes taxable 3:21 The chain reaction (worked example) 4:29 Link 3: Medicare IRMAA 6:38 Should you avoid CDs? No 6:58 Your 5-point checklist 7:41 Takeaway and next step YOUR CHECKLIST 1. Which account holds the CD or savings? A regular account, or an IRA (IRA rules are different)? 2. Estimate one year of interest: balance times rate. 3. Add it to your other income and see where your combined income lands (half of Social Security + other income + tax-exempt interest). 4. Check how far you are from the Medicare IRMAA line for your filing status. Remember the two-year look-back. 5. Ask a tax professional about timing: when each CD matures, which tax year the interest lands in, and whether withholding or estimated payments should change. SOURCES (accessed September 26, 2026) [1] IRS Topic No. 403, Interest received (page reviewed Sept 24, 2026): https://www.irs.gov/taxtopics/tc403 [2] IRS Publication 550 (2025), Investment Income and Expenses: https://www.irs.gov/publications/p550 [3] IRS Publication 915 (2025), Social Security and Equivalent Railroad Retirement Benefits: https://www.irs.gov/publications/p915 [4] IRS FAQ, Are my Social Security benefits taxable? (reviewed Sept 24, 2026): https://www.irs.gov/faqs/social-secur... [5] SSA POMS HI 01101.010, Modified Adjusted Gross Income (MAGI) (effective Dec 2, 2025): https://secure.ssa.gov/poms.nsf/lnx/0... [6] SSA POMS HI 01101.020, IRMAA Sliding Scale Tables (effective Dec 2, 2025): https://secure.ssa.gov/poms.nsf/lnx/0... [7] SSA POMS HI 01101.001, Description of IRMAA: https://secure.ssa.gov/poms.nsf/lnx/0... [8] CMS fact sheet, 2026 Medicare Parts A & B Premiums and Deductibles: https://www.cms.gov/newsroom/fact-she... [9] SSA, Request to lower an IRMAA (life-changing event, form SSA-44): https://www.ssa.gov/medicare/lower-irmaa IMPORTANT General education, not individualized tax or investment advice. Rules and thresholds change, and your situation is unique. Confirm with the IRS, Social Security, or a qualified tax professional before you act. The example numbers in the video are invented and are not a tax calculation. Medicare IRMAA figures are from the 2026 table (based on 2024 income); later years can change. Related:    • Turning 73 in 2026? Your First RMD Decisio...   If this helped, subscribe to Money After 60. #MoneyAfter60 #CDs #SocialSecurity #IRMAA #RetirementTaxes