Will I Avoid IRMAA Surcharges on Medicare Part B & Part D?
The Income-Related Monthly Adjustment Amount (IRMAA) is an additional amount that some individuals with higher incomes must pay for Medicare Part B and Part D premiums. The IRMAA surcharge is based on a person's modified adjusted gross income (MAGI), which is calculated by taking their adjusted gross income (AGI) and adding back certain deductions and exclusions.
The MAGI ranges for IRMAA surcharges are updated annually and can change depending on an individual's filing status. It's important to understand which MAGI range an individual falls into and how much they may need to pay in IRMAA surcharges.
There are some situations where an individual may be able to request an exception from the IRMAA surcharge. For example, if an individual has experienced a life-changing event such as retirement, divorce, or the death of a spouse, they may be able to request a reconsideration of their IRMAA surcharge. It's important to understand the specific criteria for requesting an exception and to complete the necessary forms in a timely manner.
It's also important to understand which tax year is used to calculate the IRMAA surcharge. The surcharge is based on an individual's MAGI from two years prior. For example, the IRMAA surcharge for 2023 is based on an individual's MAGI from 2021.
Overall, it's important to work with a financial advisor or healthcare professional to understand the potential impact of IRMAA surcharges on an individual's Medicare premiums and to develop strategies to help minimize these costs.
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Robert J. Pyle, CFP®, CFA, AEP® founded Diversified Asset Management, Inc., in 1996 to provide personalized, comprehensive wealth management services to successful individuals, families, single women, and business owners. His specialty is addressing the complex financial needs of self-employed professionals, corporate executives, and small-business owners. Our disclosure can be found here. The views, opinion, information, and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc. Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting, or tax advice.