Understanding and Managing IRMAs

A Guide to Reducing Medicare Premiums
Learn How Income Affects Your Medicare Costs and Explore Strategies to Minimize Adjustments

IRMAAs

What are IRMAAs?

IRMAA, or Income-Related Monthly Adjustment Amount, is an additional charge added to your Medicare Part B and Part D premiums. IRMAA is designed to ensure that those with higher incomes contribute a fairer share towards the cost of Medicare. The intention is to balance the financial burden among beneficiaries, promoting sustainability within the Medicare system.

How Does IRMAA Work?

The Social Security Administration (SSA) calculates your IRMAA using your MAGI from your tax return filed two years ago. If your income exceeds certain limits, the SSA will notify you of the added amount you will have to pay on top of your standard Medicare premiums.

Adding IRMAA to Medicare Premiums

Medicare Part B

The IRMAA fee is automatically added to your Part B premium bill. You will see this reflected in the amount deducted from your Social Security benefits, or if you pay directly, in your monthly bill.

Spousal Benefits

Strategies to maximize benefits for couples, including spousal and survivor benefits.

What Are the IRMAA

Brackets for 2025?

The Income-Related Monthly Adjustment Amount (IRMAA) brackets are set by the federal government and determine how much extra you may need to pay for Medicare Part B and Part D premiums. These brackets are based on your Modified Adjusted Gross Income (MAGI) from two years prior. For 2025, the brackets will be based on your 2023 MAGI.

2025 IRMAA Brackets for Medicare Part B and D

Here is a general outline of what the IRMAA brackets might look like for 2025,
although these figures can be adjusted annually:

Individuals with MAGI of $97,000 or less / Married couples filing jointly with MAGI of $194,000 or less:

No additional IRMAA charge. You pay the standard Medicare premium.

Individuals with MAGI above $97,000 up to $123,000 / Married couples filing jointly with MAGI above $194,000 up to $246,000:

You will pay a small IRMAA surcharge in addition to the standard premium.

Individuals with MAGI above $123,000 up to $153,000 / Married couples filing jointly with MAGI above $246,000 up to $306,000:

You will pay a moderate IRMAA surcharge in addition to the standard premium.

Individuals with MAGI above $153,000 up to $183,000 / Married couples filing jointly with MAGI above $306,000 up to $366,000:

You will pay a higher IRMAA surcharge in addition to the standard premium.

Individuals with MAGI above $183,000 / Married couples filing jointly with MAGI above $366,000:

You will pay the highest IRMAA surcharge in addition to the standard premium.

Key Considerations

Annual Adjustments:

It's important to note that IRMAA brackets and thresholds are usually adjusted annually to account for inflation and other economic factors.

Income Reporting:

Ensure your income reporting is accurate on your tax returns, as this determines your IRMAA charges.

Appeals:

If you experience a significant life-changing event that affects your income, such as retirement or a marriage status change, you may be eligible to appeal your IRMAA determination.

Staying informed about these brackets can help you plan for any potential increases in your Medicare premiums. Always check the latest figures from the official Medicare or Social Security Administration resources to ensure you have the most current information.

How We Can Help

If you are subject to the Income-Related Monthly Adjustment Amount (IRMAA), it can be beneficial to explore strategies that may help minimize its impact.

Here is how we can help:

Review and Verify Income Information

Begin by carefully reviewing your income data as reported on your tax returns. Ensuring that there are no errors or discrepancies that could have led to an incorrect IRMAA determination. If inaccuracies are found, we can assist in correcting them with the Social Security Administration (SSA).

Explore Life-Changing Event Appeals

If you have experienced a life-changing event such as retirement, divorce, or a significant income reduction, we can guide you through the process of filing an appeal. The SSA allows for reconsideration of IRMAA charges if a qualifying life-changing event affects your income.

Strategize Income Management

We can also work with you to develop strategies to manage your Modified Adjusted Gross Income (MAGI) more effectively. This might include timing the realization of certain income, managing withdrawals from retirement accounts, or adjusting investments to potentially lower your reported income.

Charitable Contributions

We can also help you explore charitable giving strategies, such as qualified charitable distributions (QCDs) from IRAs. These can reduce your MAGI while supporting charitable causes, potentially lowering your IRMAA exposure.

Schedule Regular Reviews

We meet with clients regularly to review your financial situation, especially as tax returns are filed. Staying proactive can help in anticipating future IRMAA charges and adjusting strategies accordingly to minimize impact.

By following these steps, we can provide you with the assistance you need, helping you to potentially reduce your Medicare costs while maintaining your financial well-being.

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