Tax Time Bomb 5: Medicare Premiums

In this episode of The Divorce the IRS Podcast, we continue our series on retirement tax time bombs with a surprise many people encounter around age 65—Medicare premium surcharges.

While many assume Medicare is free, the reality is far more complex. Your premiums for Medicare Part B and Part D are based on your income, and for higher earners, those costs can increase significantly. These surcharges, known as IRMAA (Income-Related Monthly Adjustment Amount), can quietly add thousands of dollars in additional expenses throughout retirement.

We break down how Medicare works, including the different parts, what you can expect to pay, and the costly penalties that can apply if you delay enrollment. We also explain how income from two years prior determines your current premiums—and why many retirees are caught off guard.

Most importantly, we explore strategies that may help reduce or avoid these higher premiums. By understanding how different income sources are treated, including tax-deferred and tax-free withdrawals, you can begin to make more informed decisions about how to structure your retirement income.

If you want to avoid unnecessary surprises and keep more of your money working for you in retirement, this is an episode you won’t want to miss.

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