Medicare's IRMAA surcharges are based on income from two years prior, so a single year of high earnings from capital gains, Roth conversions, or a business sale can trigger higher premiums years later. Mike Milligan explains how this two-year lag can derail retirement income plans without careful tax planning.
Are you prepared for the 2-year echo effect on retirement decisions? What do we mean by that?
A lot of retirement costs aren't immediate. Let's take the 2-year echo effect, which most people don't know about, and that's the Medicare surcharges, all that is technically called IRMAA, Income in Respect of Medicare. That's based on income from 2 years prior, and one big income year can haunt you later. That means a single year of chunky capital gains, Roth conversions, or business income, like maybe the sale of a business, can raise future Medicare premiums. And so when you're, when you're not working with a financial professional who talks about taxes from a planning standpoint or talks about them often, these surprise events in your life, these surprise expenses can be catastrophic to a retirement income plan, especially when inflation is still relatively high.
How to evaluate AI growth stocks (Nvidia, Oracle, CoreWeave) beyond market hype
How to evaluate AI growth stocks (Nvidia, Oracle, CoreWeave) beyond market hype
