You become eligible for Medicare at age 65 and apply for the red, white and blue card.
There are a few parts to Medicare…
Part A is hospital insurance that primarily covers inpatient care. It is free as long as you’ve worked for 10 years.
Part B covers doctor visits, lab tests and anything that is needed to keep you healthy. In 2026, it costs $202.90 a month in premiums and it picks up 80% of the cost. The remaining 20% is your problem.
You solve that problem by adding Medicare supplement Plan G that covers the remaining 20%. It’ll run you about $150 a month. No special networks required, no prior authorizations needed.
You then add Part D, a prescription drug plan for all your medications. This costs about $35 a month. Look for a plan that covers your needs.
So all in, you are looking at about $390 a month in premiums with $280 annual deductible for things like doctor visits etc. and you get the most comprehensive coverage available.
Then there is IRMAA, a surcharge that gets tagged on to your base costs if you exceed certain income thresholds. IRMAA stands for Income-Related Monthly Adjustment Amount.
But you are retired. What is this income they talk about then? That income is a mix of the money you receive from Social Security, the dividends and capital gains your investments give and Required Minimum Distributions or RMDs. If you have saved in your 401(k)s over the years, you’ll have RMDs.
So if this income exceeds $109k as a single tax filer or $218k as joint, your monthly premiums would be double of what you would have paid otherwise.
To avoid IRMAA, you plan early by converting some of your pre-tax money to Roth to help reduce your future RMDs. Plus how you invest has implications on the income your investments generate. Use good investment hygiene to reduce that income so that you get to spend your money your way instead of paying more tax and letting the government spend it their way.
To me and I know to most of you, IRMAA or any other surcharge is a success tax of all the good planning you’ve done in your life. It will not make or break your bank.
That’s about all you need to know on Medicare.
Cover image credit – Kaboompics, Pexels