IRMAA stands for Income Related Monthly Adjustment Amount and it is an extra charge (penalty) you will be charged by Medicare if your modified adjusted gross income (MAGI) exceeds a set amount. IRMAA should be an essential component in tax and retirement planning and could add thousands of dollars to a person or couple’s Medicare annual premiums.
Medicare uses your MAGI from two years earlier to determine if you will be required to pay IRMAA in 2020.
The Social Security Administration establishes the four income brackets that determine your IRMAA. These brackets, beginning in 2020, will be inflation-adjusted in the same way COLA is calculated for Social Security.
BOTTOM LINE: The higher your MAGI, the likelier you will be surcharges to your Medicare Parts B & D. If you are subject to IRMAA, rest assured there are strategies you can take to avoid or reduce the extra charges.
STRATEGIES TO AVOID OR REDUCE IRMAA
To learn more about these strategies or to get a second opinion on your current financial plan, call the advising team at TrueWealth Advising Group. Initial consultations are complimentary. TC117927(1120)1
Source: | SPECIAL TO USA TODAY | 12:33 pm EST January 3, 2020