Sharing from our friends at Edward Jones https://www.edwardjones.com/market-news-guidance/guidance/medicare-cost-tips.html
Are you paying higher than necessary premiums for Medicare Parts B and D? If you file single and your modified adjusted gross income (MAGI) is higher than $87,000, or higher than $174,000 if you file jointly, you could be paying as much as $347 extra for Part B ($491.60-$144.60) as well as $76.40 extra for Part D.
What can you do if you are subject to the Medicare income-related monthly adjustment amounts (IRMAA) and paying higher premiums?
Discuss these 3 ways to lower your MAGI with your tax professional:
- Don’t take your 2020 required minimum distribution (RMD), or explore options to put it back if you already took it. Due to the CARES Act, RMDs are waived for 2020 from employer retirement plans (excluding defined benefit plans) and IRAs, including inherited accounts.
- When taking distributions from your retirement account, consider taking them from your Roth IRA/Roth 401(k), rather than from a traditional IRA/401(k).
- Use Health Savings Account (HSA) distributions when paying for qualified medical expenses, such as Medicare (non-Medigap) premiums, dental and vision expenses, and other out-of-pocket medical expenses.
If your income changes from year to year and puts you in a different MAGI bracket, talk to your tax professional and notify the Social Security Administration to ensure you’re paying the correct premium.
Another way to save: Avoid enrollment penalties
Be sure you enroll for Medicare when you’re eligible, or penalties can apply to Parts B and D premiums (and potentially Part A). These penalties can be permanent, so it’s important you don’t miss the deadline.
Source: Medicare. *Income brackets subject to IRMAA.