Taking a Look at IRMAA Thresholds and How Even $1 Can Really Cost You
February 22, 2023
Welcome to Wealth Enhancement & Preservation’s Market Minute, where we get to update you on everything that happened in the financial markets this week. My name is Darrin Cohen, and I am the CEO of Wealth E&P.
We’re really excited here: over the next couple of weeks, we have our Economic Update dinners coming up with our clients and friends! If you're not able to join us in person in Alpharetta, Cartersville, or Charleston, check out the website over the next couple of weeks; we will be recording it live and we'll post it for you to view after. We’ve got so much to share with you all.
Today I want to share something that a lot of people don't really know about, which is IRMAA and how it affects your Medicare Part B and Part D premiums in retirement. As you can see on the graph below, if your income as a joint married couple is $194,000 or less, your premium stays on par. However, when you cross over that next threshold, it jumps to $280 for Part B and goes up for Part D as well. You can see it gradually goes up over six different thresholds.
The really important thing to note here isn't just the dollar amount, income, and thresholds. This isn’t a marginal tax rate like your federal income tax where you only pay the extra dollars on the dollars above a threshold. In this case, if you cross one dollar over, it affects your premium going back all the way to dollar one. So, we don't want to reduce your income below your spending needs. However, if you are close to a threshold, you do want to watch carefully to make sure you don't go over by a dollar, which can cost you hundreds of dollars instead.
If you have any questions about this topic, your portfolio, the economy, or if you want a risk profile or a retirement projection, please feel free to reach out, visit www.wealthep.com, or give us a call at (678)-739-0175. Otherwise, stay tuned for our Market Minute next week!
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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.