From Barron’s — By Elizabeth O’Brien —
Planning for your Medicare premiums isn’t on most preretirement checklists, but it’s an important consideration for those with higher incomes.
Your Medicare premium for a given year is based on your income from two years prior—typically from the last tax return on file. Since you know that in advance, there could well be opportunities to head off some income-based surcharges down the line.
First, it helps to understand how these extra costs work. For 2024, most beneficiaries pay the standard Part B premium of $174.70 a month. Individuals with 2022 modified adjusted gross incomes, or MAGI, over $103,000 and married couples filing jointly with incomes over $206,000 pay what’s known as an “income-related monthly adjustment amount,” or IRMAA.
There are five income tiers above the standard bracket, topping out at a monthly premium of $594 per month for individuals making $500,000 or more and couples making $750,000 or more. For example, moving from the third tier to the fourth, which starts above $193,000, raises your monthly premium to $559.00 from $454.20. (There’s also an income-related surcharge for Part D premiums, covering prescriptions, even for beneficiaries who opt for a Medicare Advantage plan with drug coverage.)
…
Contact Kleshinski, Morris & Morrison CPAs
If you need help with planning your tax strategy for retirement, or any type of professional accounting services, contact the experts at Kleshinski, Morrison & Morris CPAs. Reach us by phone at 419-756-3211, email to [email protected], or by filling out the contact form on this website here.