You’ve probably heard of the One Big Beautiful Bill Act (OBBBA) signed by President Donald Trump. While the legislation covers a wide range of areas, several provisions directly impact your money. Personal finance expert Suze Orman recently shared on her podcast the most important parts of the OBBBA that are good for your finances. Here are the seven provisions you should pay attention to and take advantage of. Trending Now: Suze Orman’s Top Tip for Building Wealth Is a ‘Very Easy One’ For You: 6 Things Yo ...

The adjustments to your Part B and Part D premiums are called IRMAAs (Income-Related Monthly Adjustment Amount). In all cases, the IRMAA increases your Medicare premium by a specific amount based on your household income. This increase applies for the entire year.Medicare Part D mainly covers prescription medicine. For most households, it requires a monthly premium. The exact amount varies based on the Medicare Part D plan you choose, but you might also have an adjustment based on your household income.Medi ...

Core Insights - Medicare consists of four main parts: A, B, C, and D, each covering different services and having distinct cost structures [4][10][27] - Premiums for Medicare programs can vary based on income, with a system called Income Related Monthly Adjustment Amount (IRMAA) determining the costs [2][15][27] - A Roth conversion can significantly impact Medicare premiums due to the increase in taxable income, leading to higher costs for at least a short period [5][24][27] Summary by Category Medicare Parts and Premiums - Medicare Part A is generally free for most Americans who have paid Medicare taxes for at least 10 years, but it does have deductibles and copayments [1] - Medicare Part B has a standard premium of $185 per month, which is income-adjusted, meaning higher incomes lead to higher premiums [7][8] - Medicare Part C, or Medicare Advantage, does not have a fixed premium schedule and is based on private health insurance plans that bundle Parts A and B [8][9] - Medicare Part D has variable premiums that can increase based on income, and enrollment is not mandatory to receive coverage from other parts of Medicare [10][11] Income and Premium Adjustments - Medicare premiums are based on modified adjusted gross income (MAGI), which includes taxable income and certain tax-exempt income [15][17] - The premium structure operates on a two-year lookback, meaning current premiums are based on income from two years prior [16][17] - A sudden increase in income, such as from a Roth conversion, can lead to a spike in premiums two years later [18][20] Roth Conversions and Their Effects - A Roth conversion can raise Medicare premiums temporarily due to the increase in taxable income, but future withdrawals from a Roth IRA do not count toward income, potentially lowering long-term costs [24][27] - For example, converting $500,000 from a 401(k) to a Roth IRA can lead to significant increases in Medicare costs during the conversion period, with an estimated additional cost of $21,174 over five years [26][27] - Financial advisors can assist in structuring Roth conversions to manage both taxes and Medicare costs effectively [5][30]

Core Insights - The individual is facing a higher tax bracket and increased Medicare premiums due to a significant withdrawal from their Thrift Savings Plan (TSP) [1][2] - The increase in Medicare premiums is not permanent and is based on income from two years prior [2][4] Tax and Withdrawal Strategy - There are still opportunities to adjust withdrawal strategies to potentially reduce tax burdens and Medicare premiums [2][3] - The income-related monthly adjustment amount (IRMAA) applies to Medicare premiums for individuals whose income exceeds certain thresholds [3][4] - For 2024, IRMAA thresholds are set at $103,000 for single filers and $206,000 for couples, with potential premiums reaching up to $594 per month [4] Income Considerations - The IRMAA is calculated based on income from two years prior, meaning 2024 IRMAA will be based on 2022 income [4] - Inflation adjustments to IRMAA brackets may affect future premium calculations, potentially alleviating the surcharge for those whose income is slightly above the threshold [5] - Different measures of income, such as taxable income and modified adjusted gross income (MAGI), determine tax liabilities and Medicare costs [8]

Core Insights - Investors must begin taking required minimum distributions (RMDs) from tax-deferred accounts at age 73 or 75, depending on their birth year, which can result in significant cash that may not be needed for living expenses [1][2] - A Roth IRA is suggested as a suitable option for reinvesting unneeded RMD cash due to its tax-free withdrawals and exemption from RMDs during the account holder's lifetime [1] Group 1: RMDs and Roth IRA Contributions - Direct conversion of RMDs to a Roth IRA is not allowed, but individuals can contribute to a Roth IRA if they have sufficient earned income, with a contribution limit of $7,000 plus an additional $1,000 for those aged 50 and above for 2024 [2] - Earned income includes wages, commissions, bonuses, and self-employment income, while it excludes pension payments, interest, dividends, rental income, and other non-qualifying sources [3] Group 2: Income Limits and Withdrawal Rules - Roth IRA contributions are subject to income limits, with phase-out starting at a modified adjusted gross income (MAGI) of $146,000 for single filers and $230,000 for joint filers, becoming ineligible after $161,000 and $240,000 respectively [4] - A five-year waiting period is required after the first contribution to a Roth account before withdrawals can be made, and heirs must withdraw the entire balance within 10 years [5] Group 3: Alternatives to Roth Contributions - For those unable to contribute to a Roth IRA, options exist to eliminate, reduce, or delay RMDs, including converting an IRA to a Roth account after taking the RMD for the year, with taxes applicable on the converted amount [6]