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Understanding Medicare Benefit AdjustmentsSubmitted by Townsend Asset Management Corp. on February 22nd, 2017
A big question when you start planning to receive your Medicare benefits or if you already receive them, is how will those benefits be affected by income. Individuals that are still working or receiving income from other sources like RMD’s (required minimum distributions) may incur a higher cost for their Medicare benefits.
This cost is the Income Related Monthly Adjustment Amount or IRMAA. The adjustment is added to the standard Medicare premium. The Social Security Administration calculates your benefit cost by using the modified adjusted gross income (MAGI) from your previous year’s tax return filing that corresponds to your social security number. This determines what your “actual” expected income for the following year will be. From that, you are placed in a bracket per your filing status and income. The chart below shows the IRMAA amounts for 2017:
For more information on how your benefits can be affected, feel free to contact us at Townsend Asset Management Corp.
Michael Solomon is a Tax and Financial Advisor at Townsend Asset Management Corp., a registered investment advisory firm in Raleigh, North Carolina offering comprehensive wealth management expertise to its clients. Email Michael@AssetMgr.com for information about financial and tax planning services.