Podcast - Sage Wealth Strategy

At Sage Wealth Strategy, we make planning for your financial future simple, practical, and inspiring. On the Sage Wealth Podcast, we explore unconventional strategies, alternative solutions, and proven approaches to help you build lasting wealth that spans generations. Each episode brings you insights from years of hands-on experience, giving you the tools and mindset to create abundance and live a truly fulfilling life. Tune in, and start building your warehouse of wealth—one conversation at a time.

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The Hidden Medicare Cost That Could Drain $350,000 From Your Retirement (IRMAA Explained)

Most people approaching retirement have never heard of IRMAA, and by the time they find out what it is, it's already costing them money.

IRMAA stands for Income-Related Monthly Adjustment Amount. It's the government surcharge that increases your Medicare Part B and Part D premiums once your household income crosses certain thresholds. And the structure of how it works catches a lot of people off guard: one dollar over the limit triggers the full surcharge, with no gradual phase-in.

In this episode, Wade Borth walks through exactly how IRMAA works, who it affects, and what the real financial impact looks like over a 20-year retirement. The numbers range from 0,000 to 50,000 in excess premiums, depending on your income level, and that's before factoring in what that money could have earned.

Wade Borth – Sage Wealth Strategy

Ready to take control of your financial future? Using properly structured whole life insurance, Wade Borth is dedicated to teaching how to establish the right strategy to create generational wealth. In this podcast, Wade shares the tools for understanding and the clarity of how to to do this for your family. This show is all about sharing that sage wisdom to help others build strong financial futures.

Summary

Most people know Medicare costs money in retirement, but few understand how much their income level affects what they actually pay. In this episode, Wade Borth unpacks IRMAA, the income-related surcharge that can quietly add $162 to $650 or more per month to your Medicare premiums, depending on what you earn.

Wade walks through who gets hit, what counts as income in the calculation (including surprises like municipal bond interest and Social Security), and how a single dollar over the threshold can cost you hundreds of thousands of dollars over time. He also explains how properly structured whole life insurance creates an income stream that falls outside the IRMAA calculation, giving retirees a meaningful planning advantage.

Key Takeaways

IRMAA can add hundreds of dollars per month to Medicare premiums, and a single dollar over the income threshold triggers the full surcharge with no gradual phase-in.
Every dollar of the surcharge has a compounding cost. That extra $162 per month, grown at 4% over 20 years, is worth nearly $60,000 in real wealth.
Income sources many people overlook in the IRMAA calculation include capital gains, Social Security income, municipal bond interest, rental income, and Roth conversions.
IRMAA looks back two years, so a one-time income spike follows you into retirement longer than most people expect.
Properly structured whole life insurance, when funded correctly, provides an income stream through policy loans that does not count toward the IRMAA calculation, giving retirees real choices when managing retirement income.

Links and Resources

Sage Wealth Strategy: sagewealthstrategy.com

Keywords

IRMAA, Medicare premiums, income-related monthly adjustment amount, retirement planning, Medicare Part B, Medicare Part D, retirement income, whole life insurance, infinite banking concept, IBC, policy loans, capital gains in retirement, Roth IRA withdrawals, 401k withdrawals, Medicare surcharge, retirement mistakes, Wade Borth, Sage Wealth Strategy, wealth erosion retirement, family banking

Episode Highlights

[00:00:00 – 00:01:32] Wade opens with a lunch conversation where a friend approaching retirement had no idea how IRMAA would affect his Medicare costs.
[00:05:15 – 00:08:17] Wade explains the $218,000 joint income threshold and how IRMAA brackets step up in full increments, not gradually.
[00:08:18 – 00:09:21] One dollar over the threshold adds $162 per month to a couple’s Medicare premium, a 40 percent increase with no phase-in.
[00:09:22 – 00:12:24] At a 4 percent growth rate, that extra $162 per month is worth $60,000 over 20 years. At the top bracket, the 20-year cost reaches $238,000.
[00:12:25 – 00:17:03] Wade walks through every income source factored into the IRMAA calculation, including capital gains, Social Security, municipal bond interest, and Roth conversions.
[00:17:04 – 00:19:35] HSA distributions and Roth IRA withdrawals do not count toward IRMAA, creating real planning flexibility for retirees who hold these assets.
[00:19:36 – 00:23:46] Properly structured whole life insurance policy loans fall outside the IRMAA calculation, giving retirees an income source they can draw from without triggering the surcharge.