IRMAA Explained: Why Some Retirees Pay Much More for Medicare and How to Reduce It
One of the biggest surprises I see in retirement planning isn’t about investments or Social Security it’s about Medicare premiums. Specifically, it’s the shock retirees feel when they receive a letter saying their Medicare Part B premium will be far higher than expected.
If you’ve heard someone say they’re paying $500, $600, or more per month for Medicare, they’re likely dealing with something called IRMAA. And if you don’t plan ahead, it can quietly add thousands of dollars to your healthcare costs in retirement.
Let’s break down what IRMAA is, how it’s calculated, and what you can do about it.
What Is IRMAA?
IRMAA stands for Income-Related Monthly Adjustment Amount. It’s essentially a surcharge added to your Medicare Part B and Part D premiums if your income exceeds certain thresholds.
Medicare is not strictly “one price fits all.” Higher-income retirees pay more. The government looks at your modified adjusted gross income (MAGI) from two years prior to determine whether you owe a surcharge.
So your 2026 Medicare premiums are based on your 2024 income. That timing catches many people off guard.
For 2026, the standard Medicare Part B premium is projected to be about $202.90 per month. But if IRMAA applies, that number can rise quickly depending on your income bracket.
The Income Levels That Trigger IRMAA
IRMAA begins once your income crosses specific thresholds.
For single filers, surcharges start when MAGI reaches $109,000 or more. For married couples filing jointly, it starts at $218,000 or more. From there, several income brackets determine how large your surcharge will be.
These brackets are tiered, meaning the higher your income, the higher your premium.
How Much More Could You Pay?
Once you enter IRMAA territory, premiums increase in steps.
The first bracket can push your Part B premium into the mid-$200s per month. The highest bracket can bring premiums close to $700 per month for Part B alone. And remember, this applies per person. If both spouses are subject to IRMAA, each pays their own surcharge.
Part D drug plans are also affected. IRMAA can add anywhere from roughly $15 to over $90 per month on top of your plan’s regular premium. That’s in addition to whatever your specific drug plan charges.
Over a year, these surcharges can add up to thousands of dollars.
What Triggers IRMAA?
Many retirees hit IRMAA without realizing they would. Common triggers include:
• Large capital gains from selling investments or property
• Roth conversions
• Big IRA or 401(k) withdrawals
• Severance packages or bonuses
• Business or real estate sales
Even a one-time spike in income can push you into a higher bracket because Medicare looks at tax returns from two years prior.
This is why tax planning and Medicare planning should go hand in hand.
Life-Changing Events Can Reduce IRMAA
Here’s the good news: IRMAA isn’t always permanent.
If your income dropped due to a life-changing event, you may be able to appeal. Qualifying events include:
• Retirement or work stoppage
• Loss of pension income
• Marriage or divorce
• Death of a spouse
In these cases, Medicare allows you to request a reassessment.
How to Appeal an IRMAA Decision
Appealing starts with Form SSA-44, which is specifically designed for IRMAA reconsideration. You’ll document your life-changing event and provide evidence of reduced income.
The form can be submitted by mail, fax, or in person at your local Social Security office. If approved, your premiums may be lowered going forward.
I’ve seen successful appeals save retirees thousands of dollars annually, so it’s worth pursuing if your situation qualifies.
The Real Strategy: Plan Ahead
The best IRMAA strategy is proactive planning. Coordinating withdrawals, managing Roth conversions carefully, and spreading out large income events can help you stay below thresholds when possible.
Of course, sometimes paying IRMAA is unavoidable and it may still make sense if the financial move benefits you overall. But it should be a conscious decision, not a surprise.
Medicare premiums are one of the few retirement expenses directly tied to income. That makes tax-efficient planning even more valuable.
The takeaway is simple: IRMAA isn’t a penalty, but it is a planning issue. Understanding how it works helps you make smarter decisions and avoid unnecessary costs.
