Understanding 2020 Medicare Premiums and IRMAA Surcharges

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The Story:

It was recently announced that the Medicare Part B monthly premiums and the annual deductible would be higher in 2020, so how is this amount calculated? We turn to Don Cash to explain Medicare premiums, IRMAA surcharges, and how it breaks down into different tiers.

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The Show:

Retirees received good news for 2020 when it was announced that a 1.6% cost of living increase was coming to Social Security benefits, but they also found out that Medicare premiums would also be on the rise.

The Medicare Part B monthly premiums are expected to increase by about $10 while the annual deductible will also be higher than it was in 2019. For the past 12 years, a beneficiary’s Part B monthly premium is based on his or her income and it can be broken out into five different tiers.

To help us make sense of these increases and how Medicare IRMAA surcharges are calculated, we turned to Don Cash on the latest episode of the Your Money & Your Life podcast. Late in the year is typically Medicare IRMAA season as letters arrive in the mail with information on premiums and surcharges so let’s break it all down and give you a full explanation of how it all works.

We’ll also take a listener question in our Cash Connection segment from a business owner that wants to invest the profits from a strong year to help make up ground in retirement. Don will provide some suggestions for him to consider.

You can listen to the entire show in the audio player above or click the timestamps below to skip ahead to a specific segment.

[0:32] – We made it through Thanksgiving (maybe a little heavier).

[1:43] – In the News: It’s IRMAA Medicare season and more people are getting letters saying they’ll be paying a surcharge. Don explains.

[6:16] – The five different tiers for surcharge levels.

[7:44] – Where do people run up against these charges?

[9:58] – Final thoughts from Don on IRMAA

[11:39] – Time for Cash Connection

[11:50] – Mailbag question: I’m in my mid-50s and I don’t have much saved for retirement at all. But I own my own business and I’m having a huge year so I’ll have some profits to invest. Can you give me some places to start?

[14:11] – Getting to Know Don: What is your ideal way to relax after a long day or week of work?


Medicare IRMAA Resources: 

Medicare Part B Costs 2019 and 2020 – https://www.medicare.gov/your-medicare-costs/part-b-costs

Medicare IRMAA Appeal Form – https://www.ssa.gov/forms/ssa-44-ext.pdf



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Additional Resources:

Phone: (732) 784-2867

Email: don@DonaldCash.com

Website: http://www.donaldcash.com/

About Don:

Donald W. Cash – CPA, CFP® is an independent advisor. Don began his career in 1985 as an accountant after graduating Rutgers University. In 1990 he entered the field of Estate Planning with a concentration in long term care planning. Don has been advising clients in the baby boomer and retirement market for 20 years. He has helped over 1,000 families with their planning needs. He advoctaes a holistic approach to Estate and Financial Planning as has relationships with other professionals including Attorneys, CPA’s, Mortgage Specialists, Insurance Specialists and Asset Managers. Don is married to Cathy and have 4 children, Carly, DJ, Nick and Tori. They live in Freehold, NJ.

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