# Retiree Moves $700,000 Into Tax-Free Bonds

> Retiree shifts $700,000 to tax-free municipal bonds as 20-year yields hit 4.5%.
- Title: Retiree Moves $700,000 Into Tax-Free Bonds · 24/7 Wall St.
- Summary: Retiree shifts $700,000 to tax-free municipal bonds as 20-year yields hit 4.5%. A retiree moves $700,000 into tax-free municipal bonds to avoid Medicare…
- Keywords: municipal bonds, medicare premiums, tax-exempt interest, social security, irmaa, 20-year yields, taxable interest, medicare surcharge, 2026 medicare plan, 24/7 Wall St.
- Source: 24/7 Wall St. — https://247wallst.com/personal-finance/2026/11/12/he-moves-700000-into-tax-free-municipal-bonds-as-20-year-yields-reach-4-5-the-irs-exempts-his-31500-in-annual-interest-medicare-counts-every-dollar
- Author: Gerelyn Terzo
- Published: 2026-11-13T04:23:57+00:00
- Read time: 1 min
- Topics: municipal bonds, medicare premiums, tax-exempt interest, social security, irmaa, 20-year yields, taxable interest, medicare surcharge, 2026 medicare plan
## Tax-Free Bond Move
A retiree moves $700,000 into tax-free municipal bonds as 20-year yields reach 4.5%.
## Annual Interest Exempt
The bonds pay $31,500 in annual interest, which the IRS exempts from federal income tax.
## Medicare Surcharge
Medicare premiums increase by $1,148.40 annually for $31,500 in interest.
## IRMAA Threshold
Retirees with income under $109,000 ($218,000 joint) pay standard Medicare premiums.
## Muni Interest Impact
Muni interest raises MAGI to $126,500, triggering a $1,148.40 Medicare surcharge.
## Survivor Scenario
Married couples with $126,500 joint income pay no surcharge until one partner dies.
## 2028 Premiums
Bonds bought now set 2028 Medicare premiums, with 2027 interest affecting 2029 rates.
## Tax-Free After Surcharge
The retiree keeps $30,352 of $31,500 annual interest after Medicare surcharge.
## Key takeaway

A retiree moves $700,000 into tax-free municipal bonds to avoid Medicare surcharges, keeping $30,352 in annual interest after taxes.