If you are approaching Medicare enrollment or already enrolled, you have likely heard of IRMAA — but you may not fully understand how it affects your retirement budget. The Income-Related Monthly Adjustment Amount can significantly increase your Medicare costs, and knowing how to plan for it is essential for every Nebraska retiree.
What Is IRMAA?
IRMAA is an additional surcharge added to your Medicare Part B and Part D premiums when your income exceeds certain thresholds. It was created to require higher-income beneficiaries to pay a larger share of Medicare costs.
Importantly, IRMAA is based on your modified adjusted gross income (MAGI) from two years prior. That means your 2025 Medicare premiums are determined by your 2023 tax return.
How IRMAA Works
For 2025, the standard Part B premium is $185.00 per month. IRMAA surcharges add on top of this:
- Individual income $106,000-$133,000 / Joint $212,000-$266,000: Part B = $259.00
- Individual income $133,000-$167,000 / Joint $266,000-$334,000: Part B = $370.00
- Individual income $167,000-$200,000 / Joint $334,000-$400,000: Part B = $480.00
- Higher tiers exist for incomes above $200,000 (individual) / $400,000 (joint)
The total additional cost for a high-income retiree can exceed $500 per month — $6,000+ per year — just in Medicare premium surcharges.
Why You Need a Plan
Many Nebraska retirees discover IRMAA the hard way. A common scenario: you retire at 65, begin taking distributions from your 401(k) or IRA, and those distributions push your income above the IRMAA threshold. Two years later, you receive notice of significantly higher Medicare premiums.
Without planning, IRMAA can:
- Reduce your monthly cash flow by hundreds of dollars
- Offset Social Security cost-of-living adjustments
- Limit your financial flexibility in retirement
Strategies to Manage IRMAA
1. Income Timing
Plan large retirement account distributions for years when your income is otherwise low.
2. Roth IRA Planning
Roth IRA conversions before Medicare eligibility can reduce future RMDs and IRMAA exposure.
3. Qualified Charitable Distributions (QCDs)
After age 70 1/2, you can donate up to $105,000 per year directly from your IRA to charity. QCDs count toward your RMD but are excluded from your MAGI.
4. Life Event Appeals
If you retire, divorce, lose a spouse, or experience a significant reduction in income, file Form SSA-44 with Social Security.
How Trek Insurance Solutions Can Help
Trek Insurance Solutions helps Nebraska residents coordinate their Medicare enrollment with their retirement income strategy. Our licensed agents understand the intersection of Medicare costs and retirement planning.
For more information on Trek Insurance Solutions, call 888-960-0442 or visit our website at trekis.net.