Helping Small Business Owners Produce Freedom So They Can Enjoy an Abundant Life and Live Their Passion & Purpose!
Written by Steve | Published: |
Have you ever found it odd how they name different tropical storms, hurricanes etc. human names? Like hurricane Katrina, or Andrew, Matthew, or Sandy.
I always wonder if the people with those names are offended by the constant news reporting the massive destruction in their wake?
There is a storm that is very well hidden in plain sight.
It’s called IRMAA. That’s short for medicare, Income-Related Monthly Adjustment Amount.
Since Social Security and Medicare are sister programs that are linked. As you are drawing more income in retirement it increases the cost of your Medicare Part B & Part D premiums and automatically reduces the amount you receive from social security.
In the picture below I redacted the client information but it shows that social security starts out around $42k per year and slightly increases with cost of living adjustments. However, as this client is bumping up to higher IRMAA brackets it is increasing the Medicare cost and thus reducing the amount of Social Security check received.
To the point where the client would have to actually pay to receive social security benefits.
Wait, didn’t you already pay social security tax on the income throughout all your working years?
And now when inflation is rampant and the nominal C.O.L.A. (cost of living adjustment) doesn’t even keep up the government is increasing the Medicare cost to where actually have less to live on?
This does not end well for those that are planning on using social security as their primary source of retirement income.
The good news is that there are legal ways to reduce and avoid this if you take the time and necessary steps to implement them.
If you would like this type of analysis completed for your situation let us know and we can go through it with you.
Until then watch out on the news for retirement hurricane IRMAA.