One of the causes of the labor shortage is that many people near or at age 65 decided to take the retirement plunge. Qualifying for Medicare certainly helps with the transition, so take a look at the cheat sheet under our resource tab to help you make sense of the alphabet soup and all its parts.
Medicare is not free (the cost is deducted right from your Social Security payment in most cases), but what a lot of people don't realize is that the cost is not the same for everyone.
Medicare applies an income-related monthly adjustment amount, otherwise known as IRMAA, for enrollees with higher incomes.
IRMAA is an amount you may pay in addition to your standard Part B and Part D premiums, if your income is above a certain level. The Social Security Administration has a series of income brackets that determine what that amount is. Most people will pay just the standard premium amount. But if your modified adjusted gross income is above the specified threshold, you may owe IRMAA.
Because couples pay their own premiums separately, the surcharges apply to both and can add up quickly.
The premium surcharge is also based on your income from two years earlier, so 2021’s surcharges will be based on your 2019 modified adjusted gross income. This becomes important when making decisions such as when to take income, or when calculating Roth conversions.