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Robert Harding Financial Group
18301 North 79th Avenue D-149, Glendale, AZ 85308
Phone: 623-977-9823
Fax: 623-977-0181
Toll Free: 800-977-9823
WE OFFER INDEPENDENT UNBIASED NO-STRINGS-ATTACHED
FINANCIAL ADVICE. WE ARE COMMITTED TO YOUR FINANCIAL FUTURE!
May/June 2023
Will Your RMDs Trigger Medicare Surcharges?
There are benefits of saving as much as possible in your employer’s tax-qualified retirement plan. Your taxable income is reduced by the amount you contribute and your savings has the potential to accumulate tax-free until you’re ready to withdraw it in retirement. But why didn’t anyone tell you about IRMAA?
What Is IRMAA?
IRMAA is an acronym for income-related monthly adjusted amount, and it’s the bane of Medicare recipients who’ve amassed substantial savings in pretax retirement accounts. Once you begin taking required minimum distributions (RMDs) from your 401(k) or other tax-deferred accounts, the amount you’re required to withdraw could push your income above the Medicare base limit and trigger higher premiums, in the form of a surcharge, on Parts B and D.How Much Higher?
The monthly Medicare Part B premium for individuals and married filing jointly recipients is $164.90. Surcharges on monthly premiums begin with a modified adjusted gross income over $97,000 for individuals and $194,000 for married couples. Monthly premiums, including surcharges, start at $230.80 and rise incrementally to $560.50 with income greater than $500,000 for individuals and $750,000 for couples. Medicare premiums are deducted from your Social Security benefit before you receive it.One Solution: A Roth IRA
Consider shifting some of your money to a Roth individual retirement account. You’ll contribute after-tax dollars, but withdrawals are tax-free once you reach age 59½, if you’ve owned the account for at least five years. However, there are no required withdrawals from a Roth IRA. The 2023 contribution limit is $6,500, or $7,500 if you’re age 50 or older. Single and head-of-household filers with MAGI of $138,000 or less and married joint filers with MAGI of $218,000 or less can contribute up to the limit. The ability to contribute to a Roth IRA phases out for single and joint filers with incomes over $153,000 and $228,000, respectively.Consider RMDs when planning for your retirement income.
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Securities and Investment Advisory Services offered through Geneos Wealth Management, Inc. Member FINRA/SIPC.
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