What Is IRMAA? (How Your Income Affects Your Medicare Premiums in Retirement)


When planning for healthcare in retirement, you may have come across the Medicare “Income-Related Monthly Adjusted Amount,” or “IRMAA” for short. It’s a fancy way of referring to the extra monthly premium amounts that you might pay on your Medicare Part B and Part D coverages.

Those extra monthly premium amounts are basically “surcharges” on your Medicare premiums, and they can apply to those with Standard Medicare and Medicare Advantage plans. Whether IRMAA applies to you and other Medicare beneficiaries is determined by your modified adjusted gross income (MAGI) from two prior tax years.

While you obviously want to maximize your income in retirement, in some cases this can lead to those additional surcharges on your Medicare coverage. If your income exceeds a certain amount each year, then you may have to pay the monthly adjustment amount on top of any taxes that you owe.

This surcharge is also in addition to the monthly premiums that you will pay for Medicare Parts B and D, which cover doctor visits and prescription drug coverage. IRMAA can raise the cost of Medicare by hundreds or even thousands of dollars per year for those whose incomes are high enough.

It’s a big but little-known issue, to say the least. In this article, we will go over the basics of IRMAA, how it works with Medicare and retirement in general, and some possible strategies that can help keep them and other healthcare costs at bay.

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Medicare Updates for 2023 — What You Should Know

If you are at least 65 and aren’t covered by an employer health insurance plan, then you will probably need to enroll in Medicare.

Every year, there are copays, deductibles, and premiums to be paid. These numbers typically adjust from year to year, so you don’t have to be caught unprepared when they change this year in 2023.

Once again, Social Security recipients have been given a large COLA (cost of living adjustment) for their benefits, which can play into these updates here. Here are the critical numbers that are important to know regarding Medicare benefits in 2023.

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Medicare Questions to Ask

If you have just turned 65, then you might be eligible to enroll in Medicare. Medicare is a health insurance program offered by the federal government to retirees and others who qualify.

There are many options for health coverage with Medicare. It’s good to understand a little bit about these options, as they may be confusing, or at least at first.

To help you get started, here are some basic questions that you probably have about Medicare – and what different things can entail.

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Medicare 101 – Understanding the Basics

If you are 65 years old or older, then you are eligible to enroll in Medicare. Medicare is the federally subsidized healthcare program for senior citizens. It’s run by the Centers for Medicare and Medicaid Services (CMS).

Funding for this program comes from three separate sources. One is the taxes you pay for Social Security and Medicare. Another is the premiums that you pay for your Medicare coverage. The third part of the funding comes directly from the federal government.

Here’s a quick rundown of the basics of Medicare. Call it “Medicare 101” — the essentials of what you need to know about this federal program for your retirement or other financial circumstances.

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Next Steps to Consider

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