Income-Related Monthly Adjustment Amount (IRMAA)
Medicare’s Income-Related Monthly Adjustment Amount (IRMAA) is an additional surcharge on your standard Part B and Part D premiums if your income exceeds certain thresholds. Because IRMAA is calculated using your modified adjusted gross income (MAGI) from two years prior, understanding where you fall in the income brackets is key to forecasting your future Medicare costs.
- What is IRMAA?
- A surcharge on standard Part B and Part D premiums for beneficiaries above certain income thresholds
- Income brackets:
- For the most up to date information, reach out to us to send you our IRMAA Cheat Sheet or search for “Medicare IRMAA (current year)”
- How IRMAA is determined:
- Based on your Modified Adjusted Gross Income (MAGI) from two years prior
- What is MAGI?
- Sum of Adjusted Gross Income (AIG) found on line 11 of IRS tax 1040 form + tax-exempt interest income (line 2a)
- What is MAGI?
- Use the Medicare.gov Estimate my premium for Medicare tool: https://www.medicare.gov/eligibilitypremiumcalc#/latepenaltycalc
- Based on your Modified Adjusted Gross Income (MAGI) from two years prior
- Appealing IRMAA:
- If you are issued an IRMAA and believe it was in error, you may appeal the additional premium.
- Complete the SSA-44 form if your income has changed due to life events (retirement, divorce, etc.)
- Submit documentation of the event to Social Security
- Please note, this is a long process and you will have to follow up often.
- Tips to avoid surprises:
- Review your tax filings regularly with both your CPA and Financial Advisor
- Plan distributions from IRAs and investments carefully to avoid any IRMAA fees or know to be prepared for them.
