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You Can Avoid Higher Medicare Premiums

You Can Avoid Higher Medicare Premiums

| October 23, 2020
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Whether you’re receiving Medicare benefits now, or will begin soon, it’s important to understand how income-based premiums are calculated for Medicare Parts B and D. 

Your premium is determined by your modified adjusted gross income (MAGI), which is adjusted gross income plus tax-exempt municipal bond interest, calculated for two years prior. If your MAGI is even one dollar over a premium threshold, you’ll pay the higher premium.

Retirement income strategies can help you avoid entering a higher premium bracket. Examples include: 

  • Taking a higher percentage of income from sources not subject to the MAGI calculation, such as qualified retirement plans or cash value from certain life insurance contracts
  • If you’re over age 70 ½, making a qualified charitable distribution (QCDs) 

It’s important to discuss your specific needs and goals with an experienced financial professional before making any decisions that impact your taxes and income in retirement. If you have questions about ways to keep Medicare premiums in check, or other financial concerns, please don’t hesitate to contact the office for a consultation.

This communication is designed to provide accurate and authoritative information on the subjects covered. It is not, however, intended to provide specific legal, tax, or other professional advice. For specific professional assistance, the services of an appropriate professional should be sought.

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