Navigating Medicare can be tricky enough without throwing in extra charges based on your income. Yep I’m talking about IRMAA (Income-Related Monthly Adjustment Amount). If you’re earning above certain income levels Medicare will charge you a higher premium on Parts B and D. In 2025, the income brackets that determine who pays this extra amount might look a little different from previous years. Let’s dive into those IRMAA brackets for 2025 what they mean for you and how you can prepare.
What is IRMAA?
IRMAA is an additional surcharge that’s added to your Medicare Part B and Part D premiums if your income exceeds certain thresholds. It’s based on your Modified Adjusted Gross Income (MAGI) from two years prior. So for 2025 they’ll look at your 2023 income tax returns to determine whether you owe IRMAA.
How Do The IRMAA Brackets Work?
The Social Security Administration (SSA) determines the brackets and they change slightly each year to account for inflation. If your income falls within these ranges you’ll pay more on top of your regular Medicare premiums.
Here’s what the IRMAA brackets for 2025 could look like:
- Individuals with MAGI of $97,000 or less (or $194,000 or less for couples) will pay the standard Part B premium.
- MAGI between $97,001 and $123,000 ($194,001 to $246,000 for couples) – Expect a moderate bump in your Part B premiums.
- MAGI between $123,001 and $153,000 ($246,001 to $306,000 for couples) – Things are heating up a bit here and so is your premium.
- MAGI between $153,001 and $183,000 ($306,001 to $366,000 for couples) – Your wallet may start feeling the pinch at this level.
- MAGI between $183,001 and $500,000 ($366,001 to $750,000 for couples) – Ouch right? It’s like paying first-class rates for an economy seat on a plane.
- MAGI above $500,001 ($750,001 for couples) – At this point you’re pretty much funding the Medicare program for everyone else.
Potential Drawbacks of IRMAA Brackets
1. It’s Based on Your Income Two Years Ago (Oops!)
IRMAA looks at your tax returns from two years prior which is great if your income is steady but life isn’t always that predictable. Lost your job or retired recently? Doesn’t matter your IRMAA is still calculated based on that higher income from two years ago.
“People sometimes feel like they’re being penalized for having had a good year or two financially” says Henry Beltran owner of Medicare Advisors Insurance Group LLC. “It catches a lot of people off guard.”
2. There’s No Avoiding It (Well Sort of)
Unless you manage to reduce your income to stay under the thresholds (hello retirement planning!) you can’t really dodge IRMAA. For some people it might feel like an extra tax for being a higher earner. And once you’re in a higher bracket you can’t exactly ask Medicare to give you a refund.
3. The Numbers Change Every Year (Fun Right?)
Just when you think you’ve got the hang of it the income brackets change. They’re adjusted for inflation each year so even if your income stays the same you might move into a new bracket. Isn’t that a lovely surprise?
How To Appeal Your IRMAA
Here’s some good news: You can appeal your IRMAA determination under certain circumstances. If your income dropped due to life-changing events like retirement or death of a spouse you can file an appeal with Social Security. You’ll need to provide documentation to support your claim but it’s definitely worth trying if you think you’ve been unfairly placed in a higher bracket.
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Henry Beltran’s Take on IRMAA Brackets
Henry Beltran has seen clients get hit with IRMAA charges and knows how frustrating it can be.
“People come in all the time and they say ‘I didn’t know I’d have to pay more for Medicare’” says Beltran. “I always tell folks plan ahead know what your income is and if you can appeal if something changes.”
His advice: Stay on top of your income planning especially as you near retirement. If you can keep your income below the IRMAA thresholds you might save yourself from extra premiums.
A Few Tips to Keep Your Income in Check:
- Max out retirement account contributions – This can reduce your taxable income.
- Time capital gains carefully – Realizing gains in certain years might push you into a higher bracket.
- Charitable donations – These can lower your MAGI and might keep you in a lower bracket.
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Conclusion: Plan Ahead to Avoid IRMAA Surprises
The IRMAA brackets for 2025 could catch some people off guard but with a little planning you can minimize the impact. Whether you’re still working or retired keep an eye on your income and try to stay below those MAGI thresholds if possible. And if you do get hit with IRMAA remember you can appeal if your situation has changed.
As Henry Beltran says “No one likes paying more than they have to for anything including Medicare.”
So be proactive stay informed and you might be able to avoid those higher premiums!
Additional Information
Related Posts:
- Medicare Part B Premiums for 2025
- How to Appeal Your Medicare IRMAA
- Understanding MAGI and How It Affects Your Medicare
FAQs
Q: Can I avoid IRMAA altogether?
A: You can try to keep your income below the thresholds but if you’re earning more you’re likely going to have to pay it.
Q: How often do the brackets change?
A: They typically adjust each year to reflect inflation and cost-of-living changes.
Q: Does my spouse’s income affect my IRMAA?
A: Yes if you file jointly both incomes are combined to determine your IRMAA level.
Contact Us
If you have questions about Medicare IRMAA or anything related to your Medicare coverage feel free to reach out to Medicare Advisors Insurance Group LLC.
