Wealthy Retirees Pay Higher Part B Premiums

How much you pay per month depends on your adjusted gross income.

Kimberly Lankford's avatar
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Editor's note: This article is adapted from Kiplinger's Retirement Planning 2008 guide. Order your copy today.

Last year, Medicare instituted a two-tier system for Part B premiums, with upper-income retirees paying more than others. Premiums and income limits rose moderately in 2008. The premiums are based on 2006 income because those are the last tax returns the IRS has on record.

Now, joint filers with an adjusted gross income of $164,000 or less in 2006, and single filers with an AGI of $82,200 or less, pay the base rate of $96.40 each per month. People with higher incomes pay more. The premium is deducted from your Social Security benefit.

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Joint filers earning up to $204,000, and single filers earning up to $102,000, pay $122.20 each per month. Premiums gradually increase based on income, up to $238.40 per month for joint filers who earned more than $410,000 and single filers who earned more than $205,000.

But you may be able to get your premiums reduced if your income has dropped since 2006, under certain circumstances -- and retirement is one of those reasons. Other eligible life-changing events include the death of a spouse, marriage, divorce or a reduction in income. If you've experienced any of those changes, contact the Social Security Administration at 800-772-1213 or visit your local field office.

Kimberly Lankford
Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.