I have been catching up with friends now that I’m back from my overseas hiatus. A recent friend called me up to tell me he’s worried about getting laid off.
My friend, “Sam” and I met in college as we were pursuing similar degree plans. We were both “night” students as we both had full time jobs while we were going to school at night to finish degrees. Sam is about 6 years older than I am so he’s far closer to Medicare, IRMAA and social security strategy than I am so keep that in mind.
“I think I’m going to get laid off, what should I do?” is how the conversation got started.
“Try to get the best severance package possible and take a break” was my response.
And then we got into the nitty gritty. My friend Sam is 61 years old and works in technology. I advised him that his career prospects may be very limited at that age and in that industry but if he persevered he could probably find a new job, the real question I asked is why bother?
We then got into the discussion around IRMAA. He wasn’t really aware of the pitfalls of having too much income right before you retire or enroll in Medicare. If you’re not familiar with IRMAA, it is the “penalty” people pay for having too much money as income. Here’s an AI generated table that shows IRMAA brackets and note that IRMAA looks 2 years back at your income.
Single and Married Filing Jointly
| 2025 MAGI — Single | 2025 MAGI — Married Filing Jointly | Part B IRMAA | Part D IRMAA | Total Monthly IRMAA |
|---|---|---|---|---|
| $112,000 or less | $224,000 or less | $0 | $0 | $0 |
| $112,001–$142,000 | $224,001–$284,000 | $83.70 | $15.40 | $99.10 |
| $142,001–$177,000 | $284,001–$354,000 | $209.40 | $39.70 | $249.10 |
| $177,001–$212,000 | $354,001–$424,000 | $335.10 | $64.00 | $399.10 |
| $212,001–$499,999 | $424,001–$749,999 | $460.70 | $88.30 | $549.00 |
| $500,000 or more | $750,000 or more | $502.60 | $96.40 | $599.00 |
Married Filing Separately
| 2025 MAGI | Part B IRMAA | Part D IRMAA | Total Monthly IRMAA |
|---|---|---|---|
| $112,000 or less | $0 | $0 | $0 |
| $112,001–$385,999 | $460.70 | $88.30 | $549.00 |
| $386,000 or more | $502.60 | $96.40 | $599.00 |
Important: These are projected 2027 figures, not official CMS brackets. The total column combines the Part B and Part D IRMAA surcharges only; it does not include the standard Part B premium or your Part D plan premium. For a married couple both enrolled in Medicare, double the total monthly IRMAA to determine the household surcharge.
And here is an AI generated comprehensive look at Medicare costs.
Comprehensive 2027 Medicare Cost Table
All amounts are per person, based on 2025 modified adjusted gross income (MAGI).
| 2025 MAGI Single | 2025 MAGI Married Joint | Part B Total Premium | Part D IRMAA | Combined Monthly* | Combined Annual* |
|---|---|---|---|---|---|
| ≤ $112,000 | ≤ $224,000 | $209.50 | $0 | $250.83 | $3,009.96 |
| $112,001–$142,000 | $224,001–$284,000 | $293.20 | $15.40 | $349.93 | $4,199.16 |
| $142,001–$177,000 | $284,001–$354,000 | $418.90 | $39.70 | $499.93 | $5,999.16 |
| $177,001–$212,000 | $354,001–$424,000 | $544.60 | $64.00 | $649.93 | $7,799.16 |
| $212,001–$499,999 | $424,001–$749,999 | $670.20 | $88.30 | $799.83 | $9,597.96 |
| ≥ $500,000 | ≥ $750,000 | $712.10 | $96.40 | $849.83 | $10,197.96 |
* Combined estimates include the Part B premium, Part D IRMAA, and an illustrative $41.33 monthly Part D premium. The $41.33 national base beneficiary premium is not necessarily what an available Part D plan charges. Brackets and Part B/IRMAA amounts are projections, not final CMS figures. Kiplinger+2
Married Filing Separately — 2027 Estimates
| 2025 MAGI | Part B Premium | Part D IRMAA | Combined Monthly* | Combined Annual* |
|---|---|---|---|---|
| ≤ $112,000 | $209.50 | $0 | $250.83 | $3,009.96 |
| $112,001–$385,999 | $670.20 | $88.30 | $799.83 | $9,597.96 |
| ≥ $386,000 | $712.10 | $96.40 | $849.83 | $10,197.96 |
The married-filing-separately thresholds are provisional and assume the special IRMAA rules for spouses who lived together during the tax year. Some projections use a higher top threshold, so verify against the final CMS schedule.
What’s Included and Excluded?
| Medicare cost | Treatment in the table |
|---|---|
| Part A hospital premium | Not included; usually $0 for qualifying beneficiaries |
| Part B standard premium | Included |
| Part B IRMAA surcharge | Included |
| Part D plan premium | Illustrative $41.33 included |
| Part D IRMAA surcharge | Included |
| Medigap / supplemental insurance | Not included |
| Deductibles, copays, coinsurance | Not included |
For married couples: If both spouses are on Medicare, multiply the combined monthly and annual totals by two.
For example, a married couple with 2025 MAGI of $300,000 would have an estimated combined Medicare premium of $999.86 per month or $11,998.32 annually, assuming both spouses pay the illustrative Part D premium.
The biggest limitation is the Part D plan premium: to calculate your actual Medicare cost, replace $41.33 with your chosen plan’s monthly premium.
Sam and I didn’t get into income specifics but looking at the table, it can mean a difference of paying $10,000/year in insurance premiums or paying $3000. The $7000 difference is a very nice vacation, a new roof for the house, new iphones for the family or any number of things versus wasting it on health insurance premiums. And note that these are annual costs!
Federal Reserve Interest Rate Hikes
Yesterday, the CPI inflation report came in hotter than expected. This essentially guarantees that the Federal Reserve will raise interest rates at their next FOMC meeting. Rising rates are always bad for employment so if Sam gets laid off I told him he’ll be competing with lots of other laid off people. Businesses will have to grapple with higher borrowing costs until the Fed lowers rates again.
Lots of companies like Microsoft are already laying off 60,000 people and if the AI bubble bursts, it will be job Armageddon.
What I’m Doing
Sam then asked what I’m doing to deal with all of this. I told him the only sensible thing I can do is retire overseas in the short term, lower my operational expenses and let my portfolio to grow during the next 10 years I plan on being away. I turn 55 this year and I am 10 years away from Medicare, assuming I come back and sign up for it. From what I understand there are penalties for not signing up and paying the premiums at 65 but I’ve not researched that too much as it’s a decade away.
The plan: Rent out my primary residence, generate rental income, let it appreciate in value (hopefully) and use that money to live elsewhere. If we can leave our retirement portfolio alone for 10 years and live off rentals we’ll have a significant net worth to then decide what we want to do as we get older.
I am also doing withdrawals early and moving money to Roth IRA as that doesn’t count on IRMAA as of current legislation. It’s always possible congress changes the law and Roth income is suddenly included in IRMAA which would be devastating for many people. I also have other strategies I’m looking at but no point until I get closer to 63.
Share The Wealth
Do you think Sam has a shot of finding at tech job in this AI economy at 61? Give Sam some advise in the comments below.