IRMAA Explained: How Your Income Can Increase Your Medicare Premiums
đź’ˇ Did you know that Medicare premiums aren't necessarily the same for everyone. If your income exceeds certain thresholds, Medicare adds an extra charge to your monthly Part B and Part D costs. The higher your income, the more you may pay.
A large IRA withdrawal, Roth conversion, or capital gain could cause you to pay more for Medicare—even two years later?
The good news: With advance tax planning, you may be able to manage the timing and amount of taxable income and make more informed decisions about potential IRMAA costs.
Â
It's called IRMAA, and it's one of the retirement expenses that can catch people by surprise.
In today's economy, every dollar matters. Going into the grocery store with $50 gets me far less than it did even two years ago.
 When everyday costs are already higher and markets feel unsettled, an unexpected expense can feel especially heavy for retirees living on a carefully planned income. Finding ways to avoid unnecessary costs and preserve more of what you've worked hard to save matters.
What exactly is IRMAA?
IRMAA stands for Income-Related Monthly Adjustment Amount. It's an additional charge that Medicare applies to people whose income exceeds certain limits.
For 2026, the standard Medicare Part B premium is $202.90 per month, per person. If your income is above the applicable threshold, you'll pay an additional amount.
These charges apply to each person enrolled in Medicare. For a married couple in which both spouses are enrolled, the added expense can apply to both.
What are the 2026 income thresholds?
Medicare uses income tiers. Below are the 2026 Modified Adjusted Gross Income (MAGI) thresholds and the total monthly Part B premium for each person.
$202.90: Single, $109,000 or less. Married filing jointly, $218,000 or less.
$284.10: Single, over $109,000 through $137,000. Married filing jointly, over $218,000 through $274,000.
$405.80: Single, over $137,000 through $171,000. Married filing jointly, over $274,000 through $342,000.
$527.50: Single, over $171,000 through $205,000. Married filing jointly, over $342,000 through $410,000.
$649.20: Single, over $205,000 but under $500,000. Married filing jointly, over $410,000 but under $750,000.
$689.90: Single, $500,000 or more. Married filing jointly, $750,000 or more.
These are total monthly Part B premiums, including IRMAA, per person. Married people who file separately may be subject to different thresholds and premiums.
Part D prescription coverage has its own IRMAA surcharge. The 2026 surcharge ranges from $14.50 to $91.00 per month, per person, and is added to the premium charged by the person's Part D plan.
The Part D surcharge is not included in the Part B amounts shown.
Which year's income does Medicare look at?
This is one of the most important details to understand. Medicare generally uses the tax return from two years earlier to determine your current premiums.
2026 Medicare premiums generally use your 2024 income.
2027 Medicare premiums generally use your 2025 income.
2028 Medicare premiums generally use your 2026 income.
For example, a large IRA withdrawal or Roth conversion in 2024 could affect your Medicare premiums in 2026. That means a tax decision made before or around retirement can have a delayed effect on Medicare costs.
What counts as income for IRMAA?
For IRMAA, Modified Adjusted Gross Income generally means your Adjusted Gross Income (AGI) plus tax-exempt interest.
Income that may be included in this calculation can include:
Pension income
Traditional IRA and workplace retirement-plan distributions, including 401(k), 403(b), and 457 plan withdrawals
Taxable amounts from Roth conversions
Taxable Social Security benefits
Capital gains from selling investments
Interest and dividends
Tax-exempt municipal bond interest
For Social Security, it is the taxable portion included in AGI—not necessarily the full benefit amount—that is part of this calculation.
Why do these income thresholds matter?
IRMAA is based on income tiers. If your MAGI moves just above a threshold, you can move into the next premium tier for the applicable year.
Example: Married filing jointly. At $218,000 of MAGI, the 2026 Part B premium is $202.90 per person, per month. At $218,001, the premium moves to $284.10 per person, per month. For two spouses both enrolled in Part B, that is an additional $1,948.80 over 12 months, before considering any Part D surcharge.
This is why it can be useful to understand where your projected income falls before taking a large distribution, realizing capital gains, or completing a Roth conversion. The goal is not always to avoid IRMAA; it is to weigh the premium cost against the broader tax and retirement benefits.
What if my income dropped after I retired?
You may be able to ask Social Security to use a more recent income estimate if you experienced a qualifying life-changing event that reduced your income. Retirement or stopping work can qualify in certain circumstances.
You can request a review using Form SSA-44, along with documentation of the event and your income. Approval is not automatic; Social Security reviews the circumstances and supporting information.
How does IRMAA fit into Roth conversion planning?
Roth conversions can be a valuable tax-planning strategy, especially during the years after retirement and before Required Minimum Distributions (RMDs) begin. But converting money from a traditional IRA to a Roth IRA generally creates taxable income in the year of the conversion.
That additional income can affect your IRMAA two years later. This does not mean Roth conversions are a bad idea. It means they should be evaluated alongside your tax brackets, future RMDs, Medicare premiums, and long-term goals.
The goal is not necessarily to avoid IRMAA at all costs. In some situations, accepting a higher Medicare premium now may be reasonable if the conversion creates meaningful long-term tax benefits. The important thing is to understand the trade-offs before making the decision.
đź’ˇ How I help clients plan around IRMAA
Medicare premiums, income taxes, Social Security, and retirement withdrawals are interconnected. Looking at each one separately can cause you to miss opportunities—or overlook costs.
At my Chittenango office, I work with couples approaching and navigating retirement to build year-by-year tax projections that bring these moving parts together. We look at pension and Social Security income, retirement-account withdrawals, Roth conversions, RMDs, capital gains, and potential Medicare premiums.
The objective is simple: Help you understand how today's financial decisions may affect your taxes and retirement expenses in the years ahead. You shouldn't have to guess what a financial decision will cost you.
Jessica Champion, RICP® is a fee-only fiduciary financial advisor in Chittenango, NY. Advisory services are offered through Champion Method LLC, an investment adviser registered with the State of New York.
This article is for educational purposes only and is not intended to provide tax, legal, or investment advice. Individual circumstances vary. Consult your tax professional regarding your specific situation.
Comments