Business Innovators Radio - Rick Miller, Founder of Miller Wealth Planning Discussing Understanding IRMAA

Episode Date: March 31, 2026

At Miller Wealth Planning, we provide Doctors, business owners, and other high-net-worth individuals a comprehensive, bullet-proof financial plan. Rick has put together an exceptionally talented and experienced team to show you how to manage the numerous risks high-net-worth professionals face.These risks include: tax risk; market risk; longevity risk (running out of money); inflation risk; long-term care risk; lawsuit risk; and loss of income risk, among others. Your freedom from worry is our objective.Rick’s credentials include: Certificate in Financial Planning; IRMAA Certified Planner; Certified Dementia Practitioner, and Investment Advisor Representative.Rick has a Master’s degree in English and Counseling, along with broad experience in business creation, real estate investing, and more.Learn more: http://millerwealthplanning.comThe opinions expressed on this show by the host and Fredric W. (Rick) Miller are their own and do not reflect the opinions of this radio or television station. All statements and opinions expressed are based upon information believed to be reliable. Although it should not be relied upon as such. Any statements or opinions are subject to change without notice.Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/rick-miller-founder-of-miller-wealth-planning-discussing-understanding-irmaa

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of Influential Entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have with us Rick Miller, who's the founder of Miller Wealth Planning, and we'll be talking about what Americans need to understand about Irma. Rick, welcome to the program. Hey, Mike, thank you. Hey, I want to understand all things about this person, this lady named Irma.

Ha ha. I know that's a joke. But before we dive into that, give us a little bit of your story and background. And how did you get into the industry? Well, that's a great question. I've got a long story. I have originally, I started out as a college English communications teacher. did that for a number of years, got a couple of master's degrees.

I ended up, however, in the financial arena. I owned a mortgage company in Virginia for about 17 years, grew that from an operation out of my den to four locations and 55 employees. When I sold that business, I had already planned my next step, and that was to become a financial advisor. And I'm a few months away from my 27th anniversary in that business. Wow. You've been in the business a minute or two and probably seen all kinds of topsy-turvy times and can tell stories all about it. So I know that that ties into how you serve your client. So for sure, we want to dive all into how you guide your clients to plan for retirement.

Well, first of all, like I jokingly described this person named Irma. Let's clarify what Irma is. It is the acronym I-R-M-A-A. What is Irma? Well, that stands for income-related monthly adjustment amount, which of course doesn't sell you squat, does it? It's a, you know, it's a government deal. And let me, to fully frame this out for you and your listeners, let me go back in time a little bit. In 1935, FDR signed the Social Security law.

And of course, at that time, and he actually is recorded as saying that Social Security is not designed to ever be a tax resource. Well, of course, Congress had other ideas, and President Roosevelt is long gone. And the first couple of things that they did was set it up so that, depending upon certain income levels, 50% of your social security benefit could be taxed. And then they raised that to as much as 85% of your Social Security being taxed. Now, the next step in our little Irma story here began in 2003 when the Medicare Modernization Act, it put in place the earliest framework for means testing Medicare and Social Security. And when you hear that term means test what that means is that, in essence, if you have the means, you're going to pay.

In other words, the more assets you have, the more income you have, the more means that you have, the higher your tax burden is going to be when it comes to Irma. So the next and most significant piece is that the afford. Affordable Care Act accelerated what I would term as the penetration of Irma into the financial lives of Americans. And basically, this is a stealth tax on your social security where a portion or potentially even all of your social security benefit is taken from you to pay your Medicare costs. So this is where that concept of means testing kind of returns with the vengeance. And again, there are very little ways to avoid the risk.

Most of the income that people make, you know, salaries, bonuses, investment income, even income from tax-free bonds is all considered as the government figures out what your particular Irma subsidies might be. So this is something that also in addition to being relatively new and pretty much all-encompassing, there's very, very little recognition out there in the public. yet about how this works and the impact it can have on your finances, particularly in retirement. And similar to, as you were explaining that, it made me think of driving down the highway in a state you're not familiar with and you're speeding and you get pulled over and you're like,

yeah, but I didn't know. Well, the officer doesn't care. You didn't know. It's the law. It's posted. You sped. You get the ticket. Same with this.

It's like, I don't even know how to pronounce Irma. Spell Irma. I don't know what it does. but if it triggers, there are things you need to be aware of. And the best time to be aware is not to react, but to be prepared. So let's talk a little bit more about who is most at risk in the sense of that, you know, what if it's someone like, oh, well, I only earned this and I'm certain that I wouldn't be at risk. But then you have some other people that are high affluent earners with large portfolios,

which is the end of the spectrum that is most at risk? Well, without question, the people that have higher incomes, larger assets, greater cash flows throughout their lives, those are the ones that are going to be hit the most by Irma. One of the things that is most annoying about this or difficult is that this has just kind of been plopped on. onto the tax code over, you know, the last number of years. And people are seeing they're getting bills. Let me give you an example. Okay. The more income and assets that you have, the greater your EIRMA obligation could be

to the point where your entire Social Security benefit, average Social Security benefits probably, say $3,000 a month, $2,800, something like that. If you earn too much, and again, everything in terms of your earnings, your required minimum distributions, all of that factors into the EURMA taxation, it can get to a point where your entire social security benefit can be consumed by Irma tax. Now, that seems incredible. I mean, there was actually a law that was passed that social security is not supposed to be accessible beyond the 85%

assuming what your income is, but the Irma legislation completely set that aside. And so what people have seen is that not only, and again, people of means, people of wealth, assets, and income, they can get a bill from the government, from the Treasury Department, Social Security Department, saying that even though you paid 85% income tax on your social security, and the rest of it was consumed by Irma,

you still have to, you're still going to be taxed on what you didn't receive if you're following me. Wow. Yeah, it's pretty, it's staggering. It's really staggering that this could essentially be drawn. on the American public without, without, you know, I mean, any, any knowledge or warning. Now, why is this happening? Well, it's pretty clear that, and I think most Americans are aware, that social securities broke.

Medicare costs, as we have a rising population in terms of population numbers, people getting older, the baby boomers and so on, the stresses on the Medicare system are also enormous. And so this was an under-the-radar vehicle for the Congress to address that reality, that there's not enough people working to continue to be paying into Social Security to make it solvent. And when you add this additional Irma burden, it just has created an extremely difficult situation for, in my view, people who have done everything right. You know, you've worked hard, you save, you've invested, you know, you're at a point in your life, you know, when you're starting to take Social Security. and of course you have to, you can't have Medicare unless you elect Social Security and vice versa.

There's no opting out of that relationship. So it's not something you can say, well, I just won't participate. That's not an option. And so people who have done everything right are finding that particularly the last 25 years of their lives, you know, 65 up, there's this huge financial obligation that nobody was prepared for. Yeah. You know, and you don't know until you know. And it's very similar to like the RMD rules.

Like you have to take out X percent out of these accounts at this age at a certain time. But if someone goes, oh, I sold my RV. I don't need cash this year. I'm good to go. The government doesn't matter. If you need to take it out, you needed to have done it and you'll face a penalty. So let's think about this, Rick, through all of the points you've brought up here. What can be done to mitigate some of these costs?

Well, that's the great question. And I'm glad to say, you know, after relating all this uncomfortable and annoying and angering information that there are ways to mitigate Irma. And like so many things in life, the sooner you recognize this, the sooner and more effective your mitigation efforts will be. And I can point to a couple of things. In the list of income or assets that are not usable by Irma, we have Roth IRAs.

Now, the Roth IRA is distinct from a traditional IRA, in that a Roth IRA has no tax implication in the future whatsoever. In other words, it gives you the opportunity to grow your money in a tax-free envelope. And you also have the ability to move traditional IRAs, 401Ks, service plans, 403Bs, other qualified employer plan kinds of financial instruments into a Roth IRA. Now, you must recognize that that creates a taxable event in the year that you would do such a conversion. But here is the, you know, here's the thing that you have to consider. is it better to take the hit now, pay a tax now, and have then 15, 20, 30 years of tax-free compounding and tax-free use of that money.

Plus, if there is money left over in a Roth IRA that you never use during your life, your children or grandchildren will inherit that tax-free money as well. well. So by comparison, if you just have traditional IRAs when you pass, your spouse will inherit it exactly in the form that it is. She can move it. She can change it around, but there's no tax to her. However, if a non-spouse beneficiary inherits a traditional IRA, now they are forced to take that money out over a 10-year period and be taxed on it. So what I'm leading up to, Mike, is that as a part of an overall financial strategy and financial plan, there's a way that you can begin to mitigate and in many ways very significantly mitigate, and I've even seen Irma almost eliminated by using this Roth conversion technique.

that also has the long-term benefit, Mike, of passing assets onto your children in a much more favorable tax position, if you get what I'm saying. Yeah, and I want to clarify two things, because I'm tracking right there with you, and I think that the word mitigate does not mean eliminate, as we know, but there's no way to eliminate all taxes. Yay, you see that on social media and you run from those posts, you know. but mitigate means to lower as much as humanly possible based on your circumstances. And that's my definition.

I'm sure that it's pretty close. But I think that's a big thing to think about. And secondly, I want you to comment on that plus this. The point that you made about the Roth conversion and triggering taxes in whatever tax year is certainly, again, I know we've mentioned this before. Don't go out and Google and I'm going to go convert and I'm going to transfer. You're going to run yourself into a potential big problem because if depending on the science, of your 401k or IRA, you might need to do a multi-year conversion process because you want to get right up to the limit that's best for you, but not past that, and you've got to work with a

financial professional for that. Well, yes, that's absolutely correct. I mean, I'm, you know, in my 27 years, one of the things I learned very early is you've got to understand what's in the fine print. You have to understand what the rules, what the implications are, what the penalties are. And, you know, Americans, you got to love us. You know, we are do it yourselfers. We love to be self-reliant. But honestly, Mike, when it comes to things like this and so many other investing

and retirement kinds of questions, you really don't want to do it yourself. You need sound, experienced. fiduciary advice to make sure that you don't make mistakes because I'll tell you this, the IRS does not have a sense of humor. You know, if you, and believe me, in my 27 years, I've seen some terrible examples where people thought they knew what they could do and ended up having, you know, turning a $250,000 employer plan. And this case, case, it happened to be a TSP, Thrift Savings Plan, into a $250,000 tax event in one year by making a simple error. That was not reversible.

IRS said, tough. TSP said, tough. You know, it's what, and it's always what you don't know that hurts you. And these are areas where you've got to be certain you're on the right track. Yeah. Well, I'll tell you, let's kind of wrap this up with if someone is thinking, I recognize that this could be something to think about. I have no clue where to start. What is the first thing that you would say to someone to check out to see if that would warrant a further discussion in their specific situation before reaching out and connecting with someone like yourself?

Where do they begin thinking? Probably the first question would be to their tax preparer. Because he or she is going to have the numbers. They're going to have their history. They'll know what the income is. And they are sufficiently aware of the rules that say, to put them in a position to say to a client, you know, you might want to consider Roth conversions.

And Roth isn't the only tool in this endeavor to mitigate Irma. There are others as well. It's just the, you know, there's a much higher level of recognition and understanding about Roths. And that's why I bring that up. But there are other ways to do it as well. Yep. Well, I tell you, if that trigger something in someone's mind to go, you don't know what you don't know and I'm ready to know it, what's the best way that they can reach out and connect with you to learn a little bit more, Rick?

Well, they can certainly go to my website, millerwealthplanning.com. They can shoot me an email, Rick MillerAdvisor at gmail.com, or they can simply call. My cell phone is 703, 401, 3672, and I'd be happy to listen to. where they are and give them the best advice possible. Perfect. Well, Rick, thank you so much for coming back on. It's been a real pleasure chatting with you. Oh, same here, Mike.

You take care. You've been listening to Influential Entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show or listen to past episodes, visit www. www.influentialentrepreneurs Radio.com.