You may be wondering, what exactly is IRMAA? IRMAA is your income-related monthly adjustment amount. In short, your Medicare premium is affected based on which tax bracket you fall within after age 63. This premium is based on a two year look back period. If you have been working the two years prior to retirement, you have the chance to file an appeal. However, if you increase your income due to making a lump sum withdrawal or selling a business, you cannot make an appeal.
Fortunately, your income bracket resets annually, which means there’s a chance your premiums could decrease. Overall, it is important to keep an eye on your income so you can manage your Medicare premium effectively in retirement.