Published in the Baltimore Business Journal on October 30, 2023
As individuals approach retirement and Medicare eligibility, it becomes essential to understand the potential impact of the Income-Related Monthly Adjustment Amount (IRMAA) tax on their Medicare premiums. IRMAA is an additional premium charged to individuals with higher incomes, and it can significantly affect retirement budgets. In this blog post, we will delve into what IRMAA tax is, how it affects newly retired individuals' Medicare premiums, and discuss two strategies to mitigate its impact.
WHAT IS IRMAA TAX?
IRMAA tax is a provision in the Medicare program that requires higher-income individuals to pay an additional amount on top of their standard Medicare Part B and Part D premiums. The purpose of IRMAA is to ensure that wealthier retirees contribute more towards the cost of their healthcare coverage.