Could your income cause you to pay more for Medicare?
Many retirees are surprised to learn that their income can affect how much they pay for Medicare. One factor
that often goes overlooked is IRMAA, which stands for Income-Related Monthly Adjustment Amount. And no,
it is not the 2017 hurricane!
IRMAA is an additional charge that some higher-income Medicare beneficiaries pay on top of their standard
Medicare Part B and Part D premiums. For 2026, it may apply to individuals with a modified adjusted gross
income above $109,000 or married couples filing jointly with income above $218,000. These thresholds are
based on income reported on your 2024 tax return. *IRMAA rules, thresholds, and premiums are subject to change
annually.
In other words, even if you have been enrolled in Medicare for years, changes in your income could cause
your monthly premiums to increase.
This is where retirement planning becomes especially important. Certain financial decisions, such as selling
investments with significant gains, taking large withdrawals from traditional retirement accounts, or
converting traditional IRA funds to a Roth IRA, can increase your reported income and potentially affect future
Medicare premiums.
The good news is that thoughtful planning may help you manage these costs. Depending on your
circumstances, spreading income across multiple years or carefully coordinating retirement account
withdrawals may help reduce the impact.
Understanding IRMAA is a reminder that retirement planning involves more than deciding how much money
to withdraw from your accounts. Taxes, Medicare premiums, and investment decisions can all work together
to affect how much income you ultimately have available to spend.
If you are approaching Medicare eligibility or are already retired, it may be worthwhile to review how your
income and retirement account decisions could affect your future premiums.
A little planning today could help you avoid unnecessary costs tomorrow!
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Source: Medicare.gov, 2026 Medicare Costs. Read the official Medicare guide
This article shares general market commentary and is not individualized investment advice. Past performance does not guarantee future results.
This marketing material was developed with the assistance of AI.