Helping People Understand, plan for, and avoid
IRMAA
Amount Paid in IRMAA Surcharges year to date
This amount has been taken out of retiree's SSI so far in 2023
To make sure you do not lose your SSI, register for our next event!
Let's start with the basics
IRMAA stands for:
I: R: M: A: A:
Income Related Monthly Adjustment Amount
What is IRMAA
IRMAA is a surcharge on top of your Medicare Part B & Part D premiums.
Medicare Surcharge
An extra expense in addition to your base Medicare rate
How do you pay for it?
IRMAA is paid for from your Social Security benefits.
How Much is IRMAA?
Similar to the US Tax Brackets, The more you make the more you are charged.
How am I Impacted?
IRMAA can Reduce and even eliminate the your Net Social Security Income.
How bad is it?
IRMAA could cause you to lose 100% of your SSI and even have you paying out of pocket for Medicare
Your own retirement savings are being used against you to:
- Increase your Medicare costs.
- Raise your taxes
- Lower your Social Security benefit
Get Your Custom IRMAA Report Today!
Complete some basic information with includes:
Your Current Income, Retirement Income Goal, Social Security Income, Other Income Sources, Age, Retirement Age, Retirement Account Balances.
The Medicare IRMAA Calculator software calculates, and returns an easy-to-read projection of your retirement healthcare costs. The report will indicate how your retirement will be affected by Medicare premiums and IRMAA brackets.
From there an IRMAA Certified Planner will contact you to review your report with you, discuss your Healthcare expense risk, and how your retirement income will be affected in retirement.
You and your Certified IRMAA Planner will then discuss options available to you to Protect your Social Security Income, and Retirement Income. They will run alternative scenarios showing you how to reduce and potentially eliminate IRMAA, and assist you in getting started.
"
The unpleasant reality is that if Medicare costs were not properly factored into a retirement plan, that retirement plan could very well be worthless.
— Dan McGrath
The 4 Rules of Retirement
There are 4 distinct federal regulations or rules that have altered how financial plans will impact both your Social Security as well as your health coverage in retirement that you may not be aware of.
Rule 01:
You have a mandatory expense in retirement
Under federal regulations to receive your Social Security benefit you must also accept Medicare Part A when eligible. Failure to do so results in the forfeiture of all Social Security benefits.
Eligibility for Medicare is age 65 or older and no longer have creditable health coverage through an employer or spouse’s employer.
Medicare also includes other types of coverage, Part B and Part D. These two types of coverage do have premiums as well as late enrollment penalties for those who do not enroll when eligible. Both Part B and D can be subject to IRMAA.
Rule 02:
Your mandatory expense in retirement is based on your income.
Your single mandatory expense in retirement, Medicare, has a cost that is based on your income.
Medicare contains an income based surcharge. Income Related Monthly Adjustment Amount
IRMAA is a surcharge added to Medicare Part B and Part D premiums for higher income earners while enrolled in Medicare.
Rule 03:
The definition of income for IRMAA is extremely broad.
Medicare defines income for IRMAA as
“adjusted gross income plus tax-exempt interest”.
Income that will be used towards IRMAA, Includes but is not limited to
Social Security, Wages, Tips, Interest, Rental Income, Pension Income, Capital Gains, Dividends and distributions from tax-deferred investment like Traditional 401(k)’s and Traditional IRA’s.
The following income types are not included in the IRMAA Income Calculation
Roth, Life Insurance, Health Savings Accounts, 401(h) plans, and Home Equity.
Rule 04:
Medicare premiums and any IRMAA surcharges are deducted from your Social Security benefit.
Federal regulations state that Medicare Part B premiums (optional Part D) as well as any surcharges due to Medicare’s IRMAA are automatically deducted from any Social Security Income benefit you may receive.
Your SSI benefit is calculated, then medicare is deducted as if your received it.
Even though 100% of your SSI may have gone to your medicare, 85% of your SSI is taxable income, even though you never received the payments.
According to the Medicare Board of Trustees, Medicare costs are projected to inflate by over 6.20% annually for the next 8 years (pre-Covid).
During this same time the Social Security Board of Trustees is projecting that the cost-of-living-adjustment (COLA) will be no higher than over 2.40% (pre-Covid).
