Medicare Premiums Meet Dividend Portfolio: The Right Investments to Cover Your Bill

The Medicare premium can be a significant expense for retirees, but building a dividend portfolio can help cover the costs. The standard Medicare Part B premium for 2026 is $202.90 per month, and it's deducted from Social Security checks before they're deposited into bank accounts. However, not all retirees pay this amount, as income-related monthly adjustment amounts (IRMAA) apply to about 8% of people with Medicare Part B.

The IRMAA total premiums for full Part B coverage are based on modified adjusted gross income from a prior tax year. For single-filers, the premium ranges from $202.90 for those earning up to $109,000 per year to $689.90 for those earning above $500,000.

To build a dividend portfolio that covers these expenses, retirees can consider investing in dividend-growth blue chips with yields between 3% and 4%. For example, Johnson & Johnson has yielded about 2%, Procter & Gamble has yielded around 3%, and Coca-Cola has yielded approximately 2.4%. At a blended 3.5% yield, roughly $70,000 in capital covers the standard premium.

However, retirees should prioritize dividend coverage, payment cadence, and track record through downturns when selecting investments. Monthly payers like Realty Income can help line up neatly with monthly premiums, and proven dividend kings such as JNJ, PG, and KO have raised their payouts even during economic downturns.