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With the announcement of the August CPI-U, the 2024 Brackets are official and they will increase by over 5.00% to start at $103,000 for an individual.

Now please keep in mind that at any point between now and the beginning of the 2024 Congress or the current Presidential Administration can alter these Medicare IRMAA Brackets, but if they do not then there will be at least a little bit of good news for seniors.

Official IRMAA 2024 Brackets

 

Single	Couple MAGI	Part B	Part D
< $103,000	< $206,000	$174.70	Premium (varies)
$103,000 to $129,000	$206,000 to $258,000	$244.60	$12.90
$129,000 to $161,000	$258,000 to $322,000	$349.40	$33.30
$161,000 to $193,000	$322,000 to $386,000	$454.20	$53.80
$193,000 to $500,000	$386,000 to $750,000	$559.00	$74.20
> $500,000	> $750,000	$594.00	$81.00

 

 

 

How the IRMAA Brackets adjust:

 

When Congress created Medicare IRMAA back in 2003 through the passing of the Medicare Moderniztion Act, they ruled that the IRMAA Brackets would adjust by

 

“The percentage (if any) by which the average of the Consumer Price Index for all urban consumers (United States city average) for the 12-month period ending with August of the preceding calendar year exceeds such average for the 12-month period.”

 

So, if the CPI-U at the end of August of the current year is greater than the previous August then the IRMAA Brackets will increase. Note the inflation rate does not determine IRMAA costs.

 

By the way there is no language that would stop the IRMAA Brackets from going down if the CPI-U would actually deflate from year to year.

 

In terms of the all the Thresholds within the IRMAA Brackets, due to the passing of the Bi-Partisan Budget Act of 2018 the 5^th Threshold in the IRMAA Brackets will not adjust for inflation until 2028.

 

 

 

What is IRMAA:

IRMAA is short for Medicare’s Income Related Monthly Adjustment Amount which is according to the Code of Federal Regulations:

 

“An amount that you will pay for your Medicare Part B and D coverage when your modified adjusted gross income is above the certain thresholds.”

IRMAA is a tax on your income through Medicare Part B and Part D coverage if you have too much income while in retirement.

 

Will you actually enter IRMAA:

According to the 2022 Medicare Board of Trustees Report, currently, there are over 6.8 million people in IRMAA. These people in IRMAA make up 16.63% of all eligible Medicare beneficiaries.

By 2031, according to recent reports the number of people in IRMAA will double to 13.8 million eligible people in IRMAA.

IRMAA is a revenue generator for both the Medicare and social Security Programs.

For the Medicare program, IRMAA is an added cost that the person in it must pay. This added cost provides more money each year for the program.

As for Social Security, according to Congress, all IRMAA costs are automatically deducted from any Social Security benefit a person is receiving. Thus, for those who enter IRMAA, Social Security has to pay out less to them which reduces that program’s obligation to pay benefits.

With both Medicare and Social Security projected by the government to be insolvent (unable to pay) in less than 8 years the easiest way to save these programs is to make sure more people are in IRMAA.

 

How do you reach an IRMAA bracket:

IRMAA is all about your Modified Adjusted Gross Income (MAGI).

The more of it you have the higher the chances that you have to reaching IRMAA while having less of an MAGI reduces the chance of you reaching IRMAA.

 

What counts towards your MAGI:

According to Social Security your MAGI is the total of your adjusted gross income (AGI) and any tax-exempt interest you may have.

Both of these can be found on lines 2a and 11 of your 2022 IRS tax form 1040.

 

Some examples of where your MAGI will come from are:

 

Taxable Social Security benefits	Traditional 401(k) Withdrawals
Wages	Traditional IRA Withdrawals
Pension & Rental Income	Traditional 403(b) Withdrawals
Capital Gains	Qualified Annuities
Dividends	Interest

 

If you want to avoid IRMAA all together then the goal is to generate an income from financial instruments that do not count towards your MAGI and they are:

 

Roth Account Withdrawals

Life Insurance Loans

Non-Qualified Annuities*

Health Saving Account Withdrawals

401(h) Plans

Home Loans or Reverse Mortgages

*Non-Qualified Annuities – depending on certain factors a certain portion of all income you will receive from them can be completely tax free. Please see an IRMAA Certified Professional for more information on which Annuity is best for you.

 

For a complete list of what does and does not count towards IRMAA please click here.

 

How to File an Appeal

If you feel you shouldn’t be subject to IRMAA, you can fil

The media in the U.S. is reporting that possible legislation from the House of Representatives could potentially cut Social Security benefits, but, that may not be the full story.The legislation that the House is looking to pass is bill H.R.5779 – Fiscal Commission Act of 2023.The Fiscal Commission Act of 2023 is calling for the creation of a 4 person commission that will design a pathway to a balanced budget “at the earliest reasonable date.”The requirements of this commission will be to “stabilize the debt-to-GDP ratio at or below 100% by the end of the 10-year period”.As of the 3rd Quarter of 2023, according to the St. Louis Federal Reserve that U.S. debt-to-GDP is at 120.13%. Meaning that the U.S. is spending well more than what it is taking in.Is the Fiscal Commission going to be all Republicans?The construction of the commission, according to the bill, will consist of “3 individuals from among the members of the Senate, and 1 outside expert”.The Senate Majority Leader, Charles (Chuck) Schumer, will have the responsibility of selecting all members of the commission.Yes, this is a Republican bill, but the power and control this bill will create will reside within the confines of the Senate Majority Leader and only that person, which until the next election is going to be a Democrat.Will this commission begin cutting Social Security benefits?There is nothing specific within the Act to Social Security nor is there any mention of cuts, cutting or even the word cut throughout the entire bill.Again, the bill from the House is simply requesting that the Senate Majority Leader hand select 4 individuals to devise a plan on how to bring down the country’s debt.Are Social Security benefits going to be cut?According to the Social Security Board of Trustees (SSBT), the Social Security program has enough funding to continue benefits as they are today through at least 2034.However, the Trustee are also reporting that the program’s operating expenses will increase by 5.42% annually while the payroll tax revenue to fund it will only grow by 3.80% over the next 9 years.Coupling this issue is the demographics within the United States as the Trustees are also stating that the country’s fertility rate will only be 1.99% going forward.This means that the current Social Security program is in the death spiral of having more and more people aging into the program while less and less people are taking their place to fund the benefits.Eventually, when it comes to the Social Security benefits, something has to give as it appears that there just won’t be enough revenue from taxes to continue to paying out the same amounts when it comes to benefits.But, again, there is nothing in this bill that even suggests that Congress will be cutting Social Security benefits.irmaa may be able save the Social Security program.By law Social Security benefits automatically pay Medicare premiums on a monthly basis.Medicare also has a tax on income through Medicare’s Income Related Monthly Adjustment Amount (IRMAA).IRMAA is simply a surcharge that is added to a retiree’s Part B and or Part D premium if they are earning too much income.Currently, you have to qualify for IRMAA by generating $103, 000 in income a year if you are an individual and $206, 000 for couples.The more income you generate after these initial qualifying points the higher the chances that your Medicare premiums increase even higher.Saving the Social Security program or at least lowering the obligations of the program can literally just come down to changing the IRMAA qualifications.