IRMAA
Income-Related Monthly Adjustment Amount - a surcharge on Medicare Part B and Part D premiums for higher-income beneficiaries based on income from two years prior.
Understanding IRMAA
IRMAA is a significant hidden tax on retirees with high incomes. In 2024, IRMAA surcharges apply when MAGI exceeds $103,000 for individuals or $206,000 for couples. The surcharges can add hundreds of dollars per month to Medicare costs. Tax-free income from Roth IRAs and IUL policy loans does not count toward IRMAA calculations, making these strategies valuable for managing Medicare costs.
Why This Matters for Retirement: Understanding IRMAA is essential for making informed decisions about tax-free retirement income strategies. Whether you are evaluating an IUL policy, planning Roth conversions, or comparing retirement vehicles, this concept directly affects your outcomes.