Look at any retirement planning website or blog and you are sure to find a discussion – almost obsession with income based Medicare premiums otherwise known as IRMAA.
People seem to try every tactic there is to avoid paying IRMAA which, of course, means keeping your income lower to avoid the trigger for higher Part B premiums.
If you are single, IRMAA kicks in at an income of $103,000 and if married at $206,000 at those starting points the extra premium is $69.90 per month or $244.60 rather than to standard for 2024 of $174.70.
The median income for retirees age 65 and older is $47,620. That means the standard Medicare premium equals 4.4% of their income. On the other hand, A retiree with an income of $ 103,000 – the IRMAA trigger – pays 2.76% of income for Medicare.
It’s quite common in large companies for workers to pay their share of health benefit premiums based on salary level.
In an age obsessed with “fair share“ this all seems quite fair, but many retirees don’t see it that way and want to know what extra coverage they get for paying more.
QUINNSCOMMENTARY 
Let’s clear up what “fair share” means.
We go to a baseball game. Tickets cost $100 each. I pay $100, you pay $100.
That is fair share.
Fair share is not where I pay $50 and you pay $150 for the same ticket because you earn more.
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Marginal utility of income increasing from £10,000 to £10,100
“If you are earning £10,000 a week – you would hardly notice an extra £100 a week. You may not even have the time or ability to spend it; this extra income is liable to be just saved. Therefore, we say the marginal utility of an extra £100 at this income level is very limited.
Therefore as income increases, the extra marginal benefit to individuals declines.”
Give me $103,000 a year and I’ll gladly pay $9 a month.
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That should be pay an extra 69 per month instead of 9 and that’s on top of the additional tax paid to get to 103000 from wherever below you started from. The aggravation some people feel with it is you hit a dollar over a specified amount and you get slapped for $69.
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We, (the wife and I) would have to triple our income to reach the $206,000 threshold. That would mollify a whole lot of aggravation.
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Only about 7% do.
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Marginal utility of income…
We live very comfortably on about $70,000/yr., still adding to savings and helping out the kids and grandkids. I can’t imagine what I would do with $206,000, except more helping kids.
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You previously said that you should feel fortunate to be paying more for the same exact coverage…..REALLY…so you go to a pizza shop and pay $24 for a pie and the next guy has to pay $12 f or the same exact thing….THAT MUST BE FORTUNATE AS WELL
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