Medicare and Retirement Withdrawals

Withdrawing from retirement accounts can increase people’s Modified Adjusted Gross Income (MAGI), which could lead to higher Medicare premiums due to the Income Related Monthly Adjustment Amount (IRMAA). IRMAA is a surcharge added to Medicare Parts B and D premiums if people’s income exceeds certain thresholds. This surcharge is based on MAGI from two years prior.

Withdrawals from retirement accounts, such as 401K and IRA are considered taxable income and increase people’s MAGI. Medicare will calculate how much people owe for Parts B and D based on their MAGI from two years ago. People will receive a notification from Medicare stating their MAGI was above the maximum threshold, which changes yearly. This is not a permanent change. Every year Medicare will look at people’s MAGI from two years ago and readjust.

To learn more, contact Sandra Teel, Medicare broker, at 681446-735 or Steelmedagent@gmail.com.