The full details on how Medicare Part B premiums are calculated, along with the annual IRMAA income brackets, can be found on the Medicare website. For example, individuals filing Married Filing Jointly with a modified adjusted gross income (MAGI) of $194,000 or less in 2021 paid the standard Part B premium of $164.90 per month in 2023, while those with MAGI between $194,001 and $246,000 paid $230.80 per month.
In general, Medicare bases your Part B premium on the modified adjusted gross income (MAGI) reported on your federal tax return from two years earlier. To better reflect this, MaxiFi allows you to enter your actual MAGI for the prior two years under Settings & Assumptions > Taxes. By entering these values, MaxiFi can more accurately calculate your Medicare Part B premiums during the first two years of your plan, rather than relying on estimated proxy values.
After those initial years, MaxiFi calculates your Medicare Part B premiums using the projected MAGI generated by your financial plan. Please note that MaxiFi does not currently model Medicare Part D premiums. If you’d like to include those costs in your plan, you can enter them as a recurring Special Expense.
You can also customize how MaxiFi projects future Medicare Part B premiums by navigating to Settings & Assumptions > Social Security & Medicare > Medicare Part B. This setting controls the assumed real growth rate of Part B premiums:
* 0% assumes premiums will increase only with inflation.
* A higher value (for example, 3%) assumes premiums will grow 3% faster than inflation, resulting in a more conservative projection of future healthcare costs.
Below are nominal, not real, annual increases.
