MEDICARE IRMAA EXPLAINED:
HOW INCOME AFFECTS PREMIUMS

WATCH ON YOUTUBE

Thad Ismart, CFP®, ChFEBC, CEPS
Senior Financial Planner, BWFA

Tessa Hall
Media and Communications
Specialist

About This Episode

Tessa speaks with BWFA’s Thad about how income can affect Medicare premiums and what individuals should understand about IRMAA adjustments. They explain why Medicare reviews prior tax returns, how retirement or major income changes can impact premiums, and why some individuals pay more than others.

The conversation also covers Medicare premium appeals, capital gains considerations, and planning opportunities that may help reduce healthcare costs in retirement. To better understand how Medicare planning fits into your broader retirement strategy, visit our Financial Planning services page.

Many individuals are surprised to learn that income can increase Medicare premiums.

In this episode of Healthy, Wealthy & Wise, Tessa speaks with BWFA’s Thad about IRMAA, which stands for Income-Related Monthly Adjustment Amount, and how Medicare determines premium costs based on income.

The discussion explains why Medicare reviews tax returns from two years prior and how retirement, property sales, or investment gains can affect what you pay. While some premium increases are temporary, others may require additional planning.

The episode also highlights Medicare premium appeals. Individuals who retire or experience a significant drop in income may qualify for lower premiums, even if Medicare initially calculates costs using older tax returns.

Capital gains planning is another important topic. Selling property or investments can increase Medicare premiums if income rises above certain thresholds.

Ultimately, Medicare planning involves more than healthcare coverage alone. Understanding how income impacts premiums can help individuals make more informed retirement and tax planning decisions.