John, hello, good to see you. We're getting back to basics today. What is IRMAA and how does it affect your Medicare Part B? If the Social Security Administration considers you a high-income beneficiary, you'll pay a surcharge known as the Income Related Monthly Adjustment Amount. But how high is high income?

Yeah, so IRMAA, think of it this way: you get a healthcare bill not because you're sick, but because you make too much money. And that is exactly what IRMAA is. It is an income-related tax. They like to call it a premium, but if you're looking at the chart here...If as a single filer you're making above $109,000, and as a married filing couple you're making above $218,000, you're now in the beautiful IRMAA tax brackets. And the key point there is if you are making more—$1 more—it's a cliff tax. So $1 more, you can see on the screen, you start to pay more in Medicare Part B premiums.

Not only that, but you're also going to pay more in Medicare Part D, which is your drug coverage. So your Medicare Part B coverage is your health coverage, the Part D is your prescription. So it's a tax, it's not a premium.

So explain that for me, because IRMAA's kind of complicated, I think. How does all this relate to Medicare Part B?

Yeah, so again, you have multiple different parts of Medicare. You have Medicare Part A, which is what they call gratis if you qualify and you're covered under Medicare. Then you have Part B, and Part B is going to cover everything except for your long-term care. And Part B, you're charged a premium for Part B coverage. And Part B will cover up to 80%, that's then where you have to get either a supplement or a Medicare Advantage to cover the remaining 20%.

But this is your healthcare coverage, and as we talked about in the past, 65—when you're Medicare eligible—is your second 21st birthday because, especially if you've been on COBRA or other state-run health programs, the coverage to the price is much better than what you've been in the few prior years.

However, Medicare is, as we talked about, it depends on your income. It's very income-related, hence the income-related part of IRMAA. And it goes back two years to look back to determine your premiums.

I'm glad you brought that up, John, and I'm just going to pull up that table for everybody who's looking on screen again because it says "Medicare 2026 Part B Premiums by Income if your filing status and yearly income in 2024 were." So this throws a lot of people off because of one-time financial events. Walk me through some examples that throw off people's income, bumping them up.

Yeah, so the number one is your high-income earner. You were 63, you were still working, and I've had clients making close to seven figures, if not above seven figures; they flew right through those Medicare IRMAA brackets for when they turned 65.

Other things are you sold a home and now you're incurring huge capital gains, or you had that booming stock that you just never sold and now you want to enjoy the fruits of it or your advisor told you you're over-concentrated and you need to sell that stock. And so the home or the stock has been triggering huge capital gains—that goes into your income, your modified adjusted gross income, which is calculated for IRMAA.

And all of a sudden, if it's just that $1, you're now paying an extra monthly tax—the government likes to again call it a premium—and that's going to happen for the remainder of that year, and then next year that will reset.

Now, here's one hint for you guys: if you had some qualifying event, you can actually appeal to Medicare, fill out a form, and I had one client—a very high-income earner—we did that, they granted it, and they had no issues after that. They actually got dropped, saving over $6,000 a year in Medicare premiums just by filling out that form. So that's a great form to have in your back pocket if you had a large qualifying event and your income is not the same as it used to be.

All right, well let's walk through three strategies to potentially reduce your IRMAA then. What would the top three be?

Yeah, so number one: tax management through Roth conversions. Why? Because if you're getting that lower income and you're utilizing Roth conversions as an income stream to control your IRMAA, which is a tax, that's a strategy. Now again, once you hit 63 and you're doing Roth conversions, you can inadvertently increase your Medicare taxes. So you really need to be careful on this. Our software not only looks at modified adjusted gross income, but it also looks at the Medicare brackets to make sure that we're in the most optimal territory.

But again, imagine you had a relatively large Roth IRA account, you want to go on a vacation or whatnot and you're right up on that IRMAA level, you could take that Roth IRA, enjoy your vacation without spiking your Medicare.

The second one, we're going to go with the HSA. Now for HSAs, even if you're retired, you can still contribute. If you're working, you can contribute. But the big qualification is you have to have a highly qualified deductible plan, so you have to have a high-deductible insurance plan. The other thing is you cannot be a dependent, and while we're talking about Medicare, you can't actually make contributions while you're on Medicare.

But if you're able to do all this prior to Medicare, you have the ability to have that triple-tax whammy, right? You got the money went in and you got the tax deduction for it, it grew tax-free, and if it's for a qualified medical expense, it comes out tax-free. So HSA: a great way to help control your income in retirement in relation to medical expenses.

And then the last one is the Qualified Charitable Distribution. You know this, Erin, as one of my favorite things, right? Here's the caveat: for all you young retirees in your 60s, you can't utilize this strategy until you're 70 and a half.

However, once you turn 70 and a half, if you're charitably inclined, you can start making contributions to a charity. So if you already make contributions and you're claiming standard deductions, you're not getting the deduction for it. This way you can get a tax credit.

And especially when you're required minimum distributions—this is when QCDs really become powerful because what are those RMDs? They're extra income that you may not need, but they boost you into the next Medicare bracket. Well, if you took that income out in the form of a qualified charitable distribution, it does not count as income, so you satisfied your required minimum distribution without taking on that extra income and without boosting your IRMAA tax bracket for Medicare.

Yeah, there's so many moving parts. I mean, the two-year look-back, but you know, with proper planning as in now to create more tax-free money... it really is incredible how much planning this requires to not get hit by IRMAA. So John, again, I know this is something you specialize in. If somebody would like to sit down with you, get that plan in place, make sure that they're not paying through the nose for their healthcare in retirement, what's the best way to reach you?

Yeah, and I'm really glad you said there's a lot to consider and think about when it comes to Medicare, because I like to think about Medicare, the IRMAA, as one of the tax torpedoes. This is literally one of those things that is the epitome of every action has a reaction, and multiple reactions. So you really have to think about things from a tax scope and everything you do in retirement.

So if you want to learn more about that, just visit our website, www.gosecurus.com. We have plenty of videos on our website, we have plenty of information, and you can go onto YouTube and subscribe while you're on YouTube. We have multiple videos that will be coming out here in the future that are not going to actually be in our emails, so if you're a subscriber, you'll always get our notification.

And while you're on our website, you can visit the contact us tab, and from there, if you want to schedule a 20-minute call to answer any general questions, or if you want our help with your retirement, you can schedule a complimentary vision and clarity consultation.

Good reminder too that we have recorded several separate videos each on Roth conversions, health savings accounts—I think on all these topics.

At nausea, I think!

You're right, yeah! So at your leisure, take time, pop some popcorn, digest all this information. It's a lot to go over, but again, John, I'm so grateful for your time today. Thanks for breaking this down for me.

Thank you, Erin.