Hi. I’m Bette Hochberger, CPA CGMA, and on today’s finance Friday, we have Jorge Gonzalez, who will tell us about all things IRMAA. Jorge is a financial services industry veteran with more than 26 years of experience. His specialty is providing business owners solutions to increase revenue, protect their assets, and reduce taxes with a collaboration with my CPA. He has two professional designations, and he also has a Medicare certification, which is part of what we’re going to be talking about today.

Everybody knows Uncle Sam, but nobody really gets to meet on IRMAA until it’s time for them to retire, collect social security benefits, and apply for Medicare. As many people don’t know, Medicare is not free. You need to pay for the Medicare premium on part B, which covers the doctor visits, and you need to pay on part D, which covers the prescription medications. The cost of the premium from Medicare is going to be deducted from your social security check. IRMAA, in a nutshell, is a charge that people would be subject to if they make too much income, according to the income levels that they haven’t been changed since 1965 when Medicare and Medicaid were created. They haven’t changed the income level in 55 years!

These outdated income levels are a problem. Back then, $85,000 of income was a lot of money. So only the rich and famous at that time were subject to the surcharge. Unfortunately, people making $85,000 today are not rich and famous. So it’s a problem that is going to affect a lot of the people that are going to be collecting social security benefits because if you make $1 more of that $85,000 range, you will have to pay the surcharge, which starts at 40%. It can go higher based on the 5 levels of income that the government has created. To determine if you’ll pay the IRMAA, Medicare uses the modified adjusted gross income reported on your IRS tax return from 2 years ago.

That’s why planning is so important. You need to start doing the planning now before it’s too late. Jorge’s business has software that can determine, manage and control the potential liability. In addition, Jorge is offering a free analysis for my clients.

If anybody’s got questions, reach out to either one of us. To Jorge, to myself, we can help you with this planning because we really don’t want people becoming destitute in retirement. After all, they didn’t prepare for IRMAA, of all things. That would be terrible. So thank you so much, Jorge, have a fantastic weekend, everybody, and we will see you next time.