Why Retirees Are Shocked by Medicare Taxes and IRMAA
Many retirees are shocked when their tax bill arrives, especially those on Medicare. While Social Security and Medicare feel straightforward, taxes on benefits and income-related Medicare costs (known as IRMAA, the Income-Related Monthly Adjustment Amount) can quietly creep up.
How Medicare Factors In
Your Medicare Part B and Part D premiums are tied to your income from two years prior. If your adjusted gross income (AGI) rises, perhaps from a large capital gain, IRA withdrawal, or even selling property, your premiums can increase significantly. These higher costs often show up alongside unexpected tax liabilities, leaving many retirees blindsided.
How Otium Financial Planners Help
Otium helps clients plan tax-efficient withdrawals from retirement accounts, structure income to reduce IRMAA surcharges, and project tax outcomes before year-end. Proactive Medicare and tax planning can help keep both your premiums and your tax bill lower, no surprises when April comes around.
Disclaimer:
Not affiliated with or endorsed by Medicare or any government agency. This content is for educational purposes only and is not medical, legal, or financial advice. As a licensed agent/TPMO, Michele Marchiano does not offer every plan available, please visit Medicare.gov or call 1-800-MEDICARE for all options. Plan availability and benefits vary by location, and information may change.