Watch out for IRMAA – Who’s that, you ask?

The Income Related Monthly Adjustment Amount, referred to as IRMAA, can come as a surprise to some retirees. The standard Part B Medicare premium in 2018 is $134. What most people don’t know is that as retirees they may end up paying a significant surcharge on their Medicare Part B and Part D (Drug benefit) premiums. This is a result of the Medicare Modernization Act of 2003 (which took effect in 2007) affecting Medicare Part B premiums, and of the ACA (which took effect in 2011) affecting Part D premiums. The effect is that Medicare premiums are tied to modified adjusted gross income (MAGI) from two years prior. The higher your 2016 income, the higher your 2018 Medicare premium payment. Consider that the backdrop to this article. Now for some numbers to put it all into perspective…