Her Annuity Pays $1,580 a Month, Guaranteed for Life. At 73, It Pushed Her Medicare Premium Up Two Brackets.

A retiree's $1,580 monthly annuity, guaranteed for life, pushed her Medicare Part B premium from $202.90 to $405.80 per month at age 73. This $18,960 annual increase represented about 15% of the annuity's total yearly payout. The annuity payments are considered income for Medicare, triggering the Income-Related Monthly Adjustment Amount (IRMAA) at the $109,000 MAGI threshold.

The surcharge jumps in steps, with the third tier at $405.80 per month. Part D IRMAA adds an extra $37.50 monthly, totaling about $450 annually. Altogether, the annuity's taxes consume roughly $2,900 of its yearly payout. These IRMAA surcharges are a significant portion of a retiree's budget, although still not the largest expense.