Medicare is not the same price for everyone. In 2026, higher-income beneficiaries pay more for Medicare Part B and Part D because of IRMAA, the Income-Related Monthly Adjustment Amount, and the determination generally uses 2024 modified adjusted gross income rather than current-year income.
That creates a planning problem. A one-time income event can raise Medicare premiums two years later. A Roth conversion, large IRA withdrawal, realized capital gain, or other spike can push a household into a higher IRMAA bracket even when the income never repeats.
This article covers how IRMAA works, the 2026 brackets, which income triggers a surcharge, and the planning moves that may reduce avoidable increases.
What IRMAA is
IRMAA is an additional charge applied to Medicare Part B and Part D premiums for beneficiaries whose income exceeds published thresholds. Social Security uses tax return information to determine whether it applies, looking back two years.
Beneficiaries cannot opt out of it or choose a different plan to avoid it. IRMAA is an income-based premium adjustment, and it is why two people on identical Medicare coverage can pay very different amounts.
For Part B, the surcharge is added to the standard monthly premium, which is $202.90 in 2026. For Part D, it is added on top of whatever the prescription drug plan already charges.
How the two-year lookback works
By the time the notice arrives, the year that caused it is closed. Anything you do about IRMAA has to happen before the income is realized, not after the bill shows up.
The key input is modified adjusted gross income. For IRMAA purposes, MAGI generally includes adjusted gross income plus tax-exempt interest, including municipal bond interest. Retirees frequently assume tax-exempt income is invisible here. For Medicare, it is not.
The 2026 IRMAA brackets
CMS published these figures on November 14, 2025, effective January 1, 2026. Below the first threshold, no surcharge applies. Part B surcharges run from $81.20 to $487.00 per month, and Part D surcharges from $14.50 to $91.00.
Individual filers
| 2024 MAGI | Part B surcharge | Total Part B | Part D surcharge |
|---|---|---|---|
| $109,000 or less | None | $202.90 | None |
| $109,001 to $137,000 | $81.20 | $284.10 | $14.50 |
| $137,001 to $171,000 | $202.90 | $405.80 | $37.50 |
| $171,001 to $205,000 | $324.60 | $527.50 | $60.40 |
| $205,001 to $499,999 | $446.30 | $649.20 | $83.30 |
| $500,000 or more | $487.00 | $689.90 | $91.00 |
2026 IRMAA tiers for single filers, based on 2024 modified adjusted gross income. Amounts are per person, per month. Source: Centers for Medicare & Medicaid Services.
Married filing jointly
| 2024 MAGI | Part B surcharge | Total Part B | Part D surcharge |
|---|---|---|---|
| $218,000 or less | None | $202.90 | None |
| $218,001 to $274,000 | $81.20 | $284.10 | $14.50 |
| $274,001 to $342,000 | $202.90 | $405.80 | $37.50 |
| $342,001 to $410,000 | $324.60 | $527.50 | $60.40 |
| $410,001 to $749,999 | $446.30 | $649.20 | $83.30 |
| $750,000 or more | $487.00 | $689.90 | $91.00 |
2026 IRMAA tiers for married couples filing jointly. Amounts are per person, per month, so a couple where both spouses are enrolled pays these figures twice. Source: Centers for Medicare & Medicaid Services.
Married filing separately
This scale is different, and it is harsh. A married beneficiary who lives with their spouse and files separately moves almost directly from no surcharge to the second-highest tier.
| 2024 MAGI | Total Part B | Part D surcharge |
|---|---|---|
| $109,000 or less | $202.90 | None |
| Above $109,000, below $391,000 | $649.20 | $83.30 |
| $391,000 or more | $689.90 | $91.00 |
2026 IRMAA tiers for married beneficiaries who lived with their spouse and filed separately. Source: Centers for Medicare & Medicaid Services.
There is no gradual climb here. A single dollar above $109,000 moves a separately filing spouse from $202.90 to $649.20 per month, a jump of more than $5,300 a year. For couples considering separate filing for other reasons, the Medicare consequence belongs in that calculation.
Why IRMAA catches retirees off guard
Two features do most of the damage. The first is the delay described above. The second is that every threshold is a cliff rather than a phase-in.
One dollar, one full tier
One additional dollar of income adds $81.20 per month to Part B, plus $14.50 for Part D. That is $1,148.40 over the year for a single filer, and roughly double for a couple where both spouses are enrolled. The surcharge does not phase in gradually. It applies in full.
This is why projecting income against the thresholds matters more than projecting it against tax brackets alone. A tax bracket costs you a marginal rate on the dollars above the line. An IRMAA threshold costs you the entire tier.
Income events that commonly trigger IRMAA
- Large withdrawals from traditional IRAs
- Roth conversions
- Realized capital gains from investment sales
- Pension or annuity income
- Tax-exempt municipal bond interest
None of these are bad decisions. Each simply carries a Medicare consequence alongside the tax consequence, and the Medicare side is the one that usually goes unmodeled.
Roth conversions
Roth conversions reduce future required minimum distributions and create tax-free withdrawal flexibility later. The converted amount is generally included in taxable income for the year of conversion, thereby increasing MAGI and potentially triggering IRMAA two years later.
This is a reason to deliberately size and time conversions, particularly for households near a threshold, rather than a reason to avoid them. A series of smaller conversions across several years is often easier to control than one large conversion, because it lets you manage tax brackets and Medicare premiums at the same time.
Capital gains and one-time sales
Selling appreciated investments or property raises income for tax purposes, and a large gain recognized in one year can move a household into a higher premium bracket later. This comes up with concentrated stock positions, the sale of a business interest, investment real estate, and rebalancing a taxable portfolio carrying large embedded gains.
Where a gain is unavoidable, timing may still help. Spreading transactions across years, or pairing gains with realized losses, can reduce the impact.
How retirees may reduce IRMAA exposure
You cannot opt out of IRMAA once income exceeds the thresholds. You can often manage the income that drives it. The goal is not always to avoid the surcharge entirely; sometimes the right decision is to accept it knowingly as part of the cost of a larger strategy.
Manage withdrawals across account types
Households that can draw from taxable accounts, traditional IRAs, cash, and Roth accounts have greater control over MAGI. Qualified Roth withdrawals generally do not increase taxable income, which helps in years when staying below a threshold matters.
Spread income over multiple years
A single-year spike is usually what triggers the surcharge. Staging conversions, gains, or distributions across several years reduces the risk of crossing a line.
Account for tax-exempt interest
Municipal bond interest is exempt from federal income tax and still counts toward IRMAA MAGI. Retirees holding significant municipal positions should include that income when projecting Medicare exposure.
Consider qualified charitable distributions
Amounts sent directly from an IRA to charity under the QCD rules are excluded from taxable income, which can reduce MAGI and therefore IRMAA exposure while satisfying charitable intent.
Coordinate Social Security timing
Benefits affect overall income calculations, so claiming decisions influence how much room remains for conversions or other taxable events. There is no universal answer, which is exactly why the decisions should be made together rather than separately. Finivi covers the mechanics in its guide to applying for Social Security.
Appealing an IRMAA determination
A surcharge based on income you no longer have can sometimes be reduced. Social Security allows beneficiaries to request a new determination after a life-changing event that lowered household income, including:
- Retirement or work stoppage
- Death of a spouse
- Divorce or annulment
- A significant loss of income-producing property or pension income
The request is made on Form SSA-44.
Two things worth knowing. A reconsideration request must generally be filed within 60 days of receiving the IRMAA notice. And an approved life-changing-event determination is typically effective back to January of the year you request it, so excess premiums already paid that year are generally refunded rather than only adjusted going forward.
Separately, if the determination relied on an incorrect or amended tax return, you can request a new determination using corrected data rather than filing a life-changing-event appeal.
An illustration
Consider a married couple whose MAGI normally sits below $218,000. In 2024, they complete a large Roth conversion, pushing them above the threshold. In 2026, IRMAA applies because the determination uses 2024 income.
The conversion may still have been the right decision. The higher premium is simply part of its total cost, and both spouses pay it if both are enrolled. A smaller staged conversion might have produced the same long-term benefit without the surcharge.
IRMAA planning is about knowing the full cost of a retirement income decision before making it, not simply about avoiding a surcharge.
Common questions
Does everyone on Medicare pay IRMAA?
No. It applies only to beneficiaries whose income exceeds the thresholds. CMS has estimated that roughly 8 percent of Part B beneficiaries pay an income-related amount.
Is IRMAA based on current-year income?
Generally no. For 2026, Medicare uses 2024 income under the two-year lookback.
Does municipal bond interest count toward IRMAA?
Yes. Tax-exempt interest is generally included in the MAGI calculation used for Medicare.
Can IRMAA go away in a future year?
Yes. The determination is made annually. If income later falls below the thresholds, the surcharge declines or disappears in a subsequent determination year.
Can a retiree challenge an IRMAA notice?
Yes. A beneficiary may request a lower determination after a qualifying life-changing event by filing Form SSA-44, generally within 60 days of the notice.
Final thoughts
IRMAA is easy to overlook because it sits at the intersection of tax planning, retirement withdrawals, and Medicare costs, and no single one of those conversations naturally covers it. Once income crosses a threshold, it becomes a cash-flow issue, particularly for married couples in which both spouses are affected.
The useful part is that IRMAA is not random. It follows published thresholds and known income rules, which means it can be planned around by anyone looking far enough ahead. Reviewing withdrawals, conversions, gains, charitable distributions, and claiming decisions together, rather than one at a time, is what makes the difference.
A surcharge notice is a bad time to find out
By the time an IRMAA letter arrives, the income year that caused it closed two years ago.
The decisions that determine your 2028 premium are the ones you are making now.
Finivi can help you review:
- Projected MAGI against the current thresholds
- Roth conversion sizing and timing across multiple years
- Withdrawal sequencing across taxable, tax-deferred and Roth accounts
- The Medicare cost of a planned sale or one-time income event
- Social Security claiming timing alongside the above
Sources
- Centers for Medicare & Medicaid Services, “2026 Medicare Parts A and B Premiums and Deductibles,” published November 14, 2025, effective January 1, 2026.
- Social Security Administration, Form SSA-44, Medicare Income-Related Monthly Adjustment Amount, Life-Changing Event.
- Social Security Administration, “Medicare Premiums: Rules for Higher-Income Beneficiaries,” publication 05-10536.
- Internal Revenue Service, Publication 590-B, Distributions from Individual Retirement Arrangements, on qualified charitable distributions.
Finivi Inc. is an SEC-registered investment adviser. Registration does not imply a certain level of skill or training. This article is provided for informational and educational purposes only and does not constitute investment, tax, legal, or Medicare enrollment advice. Premium amounts, income thresholds, and eligibility rules are set by federal agencies, are subject to change, and are stated here as published for the 2026 calendar year. Individual circumstances vary, and the strategies described may not be appropriate for every household. Readers should confirm current figures with the Centers for Medicare and Medicaid Services or the Social Security Administration and consult their own tax, legal, and financial professionals before acting on any of the information above.
