If you earn above a certain income threshold, Medicare charges you more for your Part B and Part D premiums. This surcharge is called IRMAA — the Income-Related Monthly Adjustment Amount — and it catches thousands of retirees off guard every year. The good news is that with the right planning and knowledge, you can often reduce or even eliminate IRMAA entirely. This guide explains exactly how IRMAA works, what the 2026 brackets are, and the most effective strategies to keep your Medicare costs as low as possible.
What Is IRMAA?
IRMAA stands for Income-Related Monthly Adjustment Amount. It is an additional amount that higher-income Medicare beneficiaries pay on top of the standard Part B and Part D premiums. Think of it as a surcharge — not a separate bill, but an increase to your existing Medicare premiums.
The Social Security Administration (SSA) determines whether you owe IRMAA based on your modified adjusted gross income (MAGI). Your MAGI is your adjusted gross income (line 11 on your Form 1040) plus any tax-exempt interest income (such as interest from municipal bonds). If your MAGI exceeds certain thresholds, you are placed into one of five IRMAA tiers, each with progressively higher premium surcharges.
IRMAA was created as part of the Medicare Modernization Act of 2003 and took effect in 2007. The idea is straightforward: beneficiaries with higher incomes can afford to contribute more toward the cost of Medicare. Whether you agree with that reasoning or not, understanding the rules is essential for managing your retirement budget.
The 2-Year Lookback Rule
One of the most confusing aspects of IRMAA is its timing. Your IRMAA determination for any given year is based on your income from two years prior. This is called the 2-year lookback rule.
Here is how it works in practice:
| Medicare Premium Year | Tax Return Used | Income Year |
|---|---|---|
| 2026 | 2024 tax return | January – December 2024 |
| 2027 | 2025 tax return | January – December 2025 |
| 2028 | 2026 tax return | January – December 2026 |
The SSA uses the most recently available tax data from the IRS. In most cases, this is your return from two years ago. So if you retired in 2025 and your income dropped significantly, your 2026 IRMAA would still be based on your higher 2024 income — unless you file an appeal (more on that below).
2026 IRMAA Income Brackets
The following table shows the 2026 IRMAA income thresholds and the corresponding monthly premiums for Part B and Part D surcharges. These amounts are based on your 2024 MAGI:
Part B IRMAA Brackets for 2026
| Individual MAGI | Married Filing Jointly | Monthly Part B Premium | Annual Surcharge vs. Standard |
|---|---|---|---|
| ≤ $109,000 | ≤ $218,000 | $202.90 | $0 (standard rate) |
| $109,001 – $137,000 | $218,001 – $274,000 | $284.10 | +$974.40/year |
| $137,001 – $171,000 | $274,001 – $342,000 | $405.80 | +$2,434.80/year |
| $171,001 – $205,000 | $342,001 – $410,000 | $527.50 | +$3,895.20/year |
| $205,001 – $499,999 | $410,001 – $749,999 | $649.20 | +$5,355.60/year |
| ≥ $500,000 | ≥ $750,000 | $689.90 | +$5,844.00/year |
Part D IRMAA Surcharges for 2026
| Individual MAGI | Married Filing Jointly | Monthly Part D Surcharge | Annual Extra Cost |
|---|---|---|---|
| ≤ $109,000 | ≤ $218,000 | $0 | $0 |
| $109,001 – $137,000 | $218,001 – $274,000 | +$14.50 | +$174.00/year |
| $137,001 – $171,000 | $274,001 – $342,000 | +$37.50 | +$450.00/year |
| $171,001 – $205,000 | $342,001 – $410,000 | +$60.40 | +$724.80/year |
| $205,001 – $499,999 | $410,001 – $749,999 | +$83.30 | +$999.60/year |
| ≥ $500,000 | ≥ $750,000 | +$91.00 | +$1,092.00/year |
For a married couple both on Medicare at the highest IRMAA tier, the combined surcharge can exceed $13,800 per year on top of standard premiums. That is a significant cost that deserves careful attention.
How IRMAA Affects Part B Premiums
The IRMAA surcharge for Part B is added directly to your standard premium. If you receive Social Security benefits, the total Part B premium (standard + IRMAA) is deducted from your monthly Social Security check before you receive it.
For example, if you are a single filer with a 2024 MAGI of $150,000, you fall into the third IRMAA tier. Instead of paying the standard $202.90 per month for Part B, you would pay $405.80 per month — an extra $202.90 per month, or $2,434.80 per year.
The SSA sends you a notice (usually in late fall) informing you of your IRMAA determination for the coming year. If you disagree with the determination, you have the right to appeal. Many people receive this notice and assume they cannot do anything about it — but in many cases, an appeal is both appropriate and successful.
How IRMAA Affects Part D Premiums
IRMAA also increases your Part D prescription drug premium. Unlike Part B, where you pay a single combined premium, the Part D IRMAA surcharge is billed separately. You will receive a bill from Medicare (or the amount is deducted from Social Security) in addition to whatever premium your specific Part D plan charges.
For example, if your Part D plan premium is $40 per month and you are in the second IRMAA tier, your total monthly Part D cost would be $40 + $14.50 = $54.50 per month. The surcharge applies regardless of which Part D plan you choose, including Medicare Advantage plans that include drug coverage.
It is important to note that even if you enroll in a Medicare Advantage plan with $0 drug premium, you would still owe the Part D IRMAA surcharge if your income exceeds the threshold.
Worried About IRMAA Surcharges?
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☎ (910) 994-6464How to Appeal IRMAA Using Form SSA-44
If you believe your IRMAA determination is incorrect or your income has changed significantly due to a life-changing event, you can file an appeal with the Social Security Administration using Form SSA-44 (Medicare Income-Related Monthly Adjustment Amount — Life-Changing Event).
Qualifying Life-Changing Events
The SSA recognizes the following events as grounds for reconsidering your IRMAA:
- Marriage
- Divorce or annulment
- Death of a spouse
- Work stoppage (retirement or reduction in work hours)
- Work reduction (part-time transition)
- Loss of income-producing property (due to disaster, fraud, etc.)
- Loss of pension income (employer pension terminated or reduced)
- Employer settlement payment (received settlement from former employer)
How to File Form SSA-44
- Obtain the form. You can download Form SSA-44 from the Social Security Administration website (ssa.gov) or pick one up at your local SSA office.
- Document the event. Gather supporting evidence such as a retirement letter from your employer, a divorce decree, a death certificate, or documentation of property loss.
- Estimate your current or more recent income. The form asks you to provide your expected MAGI for the relevant year. Be as accurate as possible.
- Submit the form. You can file in person at your local SSA office, by mail, or in some cases by phone. Filing in person is often the fastest route.
- Wait for a decision. The SSA typically processes appeals within a few weeks to a few months. If approved, your premiums will be adjusted and you may receive a refund for any overpayment.
Strategies to Avoid or Reduce IRMAA
Even if you have not experienced a qualifying life-changing event, there are proactive financial strategies that can help you stay below the IRMAA thresholds or minimize how much you pay. These strategies work best when implemented several years before you enroll in Medicare.
1. Roth Conversions — Before Age 65
Converting traditional IRA or 401(k) funds to a Roth IRA is one of the most powerful IRMAA-avoidance tools, but timing is everything. Roth conversions increase your MAGI in the year they occur. The strategy is to complete conversions before you turn 63 (or at least before the tax year that falls two years before your Medicare enrollment). This way, the income from conversions does not land in a year that triggers IRMAA.
Once the funds are in a Roth IRA, qualified withdrawals are tax-free and do not count toward your MAGI. This means Roth distributions in retirement will not trigger IRMAA, unlike traditional IRA withdrawals.
If you are already on Medicare and considering a Roth conversion, proceed carefully. Work with a tax advisor to calculate whether the long-term tax savings outweigh the short-term IRMAA surcharge.
2. Manage Capital Gains
Large capital gains from selling investments, a business, or real estate can push you into a higher IRMAA bracket. Consider these approaches:
- Harvest gains gradually. Rather than selling a large position in one year, spread sales over multiple tax years to keep your MAGI below IRMAA thresholds.
- Use tax-loss harvesting. Offset capital gains with capital losses in the same tax year to reduce your net MAGI.
- Hold appreciated assets in taxable accounts strategically. If you plan to sell, time the sale for a year when your other income is lower.
3. Qualified Charitable Distributions (QCDs)
If you are 70½ or older, you can donate up to $105,000 per year (2024 limit, indexed for inflation) directly from your traditional IRA to a qualified charity. A QCD satisfies your Required Minimum Distribution (RMD) but is excluded from your taxable income — meaning it does not increase your MAGI and does not trigger IRMAA.
This is an especially effective strategy for retirees who are charitably inclined and have large traditional IRA balances. Instead of taking the RMD as income (which counts toward IRMAA), you redirect it as a charitable gift.
4. Donor-Advised Funds and Charitable Bunching
If you plan to make significant charitable contributions, consider “bunching” multiple years of donations into a single year using a donor-advised fund (DAF). This allows you to take a large itemized deduction in one year (potentially reducing your MAGI) while spreading the actual charitable distributions over several years.
5. Tax-Exempt Income Sources
Be aware that tax-exempt interest income (such as interest from municipal bonds) is included in the IRMAA calculation even though it is not subject to regular income tax. If you hold a significant municipal bond portfolio, this income could push you over the IRMAA threshold. Consider whether the tax-exempt benefit of munis is being offset by IRMAA surcharges.
6. Health Savings Account (HSA) Contributions
If you are still working and enrolled in a high-deductible health plan before age 65, contributing to an HSA reduces your MAGI. HSA contributions are above-the-line deductions, and withdrawals for qualified medical expenses are tax-free. While you cannot contribute to an HSA once enrolled in Medicare, the balance can still be used tax-free for medical expenses, including Medicare premiums (except Medigap premiums).
7. Be Mindful of the Cliff Effect
IRMAA brackets are “cliff” thresholds, not graduated brackets like income tax. Going even one dollar over a bracket boundary puts you in the next tier for the entire year. For example, if you are a single filer and your MAGI is $109,001, you will pay $284.10 per month for Part B instead of $202.90 — an extra $974.40 for the year because of one dollar in income.