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Medicare and the Coronavirus: The CARES Act Presents Some Financial Planning Opportunities

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The Coronavirus Aid, Relief, and Economic Security (CARES) Act, which became the law of the land on March 27, 2020, includes a waiver of required minimum distributions (RMDs) for 2020 from company savings plans and IRAs.

And for those who take advantage of this waiver and who might be subject to a Medicare surcharge on their Part B and/or Part D premiums there’s a financial planning opportunity.

So says Jae Oh, author of Maximize Your Medicare. “Reducing RMDs also reduces your taxable income,” he says.

And the degree to which you don’t have to recognize the income from required minimum distributions for 2020 can mean you may not be assessed an income related monthly adjustment amount or IRMAA in the future.

According to, most people pay the standard premium amount.
But if your modified adjusted gross income is above a certain amount, you may pay an IRMAA. Medicare uses the modified adjusted gross income reported on your IRS tax return from two years ago. This is the most recent tax return information provided to Social Security by the IRS.

For instance, if you filed a joint tax return in 2018 and your yearly income that year was above $174,000 you would pay an IRMAA in 2020.

Thus, the CARES Act provides you with an opportunity to reduce your taxable income this year and possibly avoid or reduce your IRMAA in 2022.

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