If you're new to Medicare or have higher retirement income, you may run into a term that sounds like an aunt's name: IRMAA. It stands for Income-Related Monthly Adjustment Amount, and it's the surcharge higher-income beneficiaries pay on top of standard Medicare premiums. About 7% of Medicare beneficiaries pay it, and it can add hundreds of dollars per month to your premium. Here's how it works and what to do about it.
The short version
If your modified adjusted gross income (MAGI) from your tax return 2 years ago exceeded certain thresholds, Medicare charges you extra on Parts B and D. The surcharge is tiered — the more income, the higher the surcharge. For 2026, single filers with MAGI above $106,000 and married filers above $212,000 are subject to IRMAA.
The 2-year look-back
The piece that confuses most people: Medicare uses your tax return from 2 years ago to set your current-year premium. So your 2026 Medicare premium is based on your 2024 income. This matters because a one-time event 2 years ago — selling a business, taking a large IRA distribution, a big capital gain, an inheritance — can affect this year's premium even if your current income is much lower.
The IRMAA tiers (2026)
The thresholds get adjusted annually for inflation. Here are the approximate 2026 brackets for single filers:
- $0 surcharge: MAGI below $106,000
- Tier 1 (~$88/month total surcharge): $106,000 – $133,000
- Tier 2 (~$220/month): $133,000 – $167,000
- Tier 3 (~$353/month): $167,000 – $200,000
- Tier 4 (~$486/month): $200,000 – $500,000
- Tier 5 (~$530/month): above $500,000
Married filing jointly thresholds are roughly double. Married filing separately has unique (very compressed) thresholds — separated filers pay the highest IRMAA at just $106,000 of MAGI.
The cliff problem
IRMAA tiers are cliffs, not gradients. Crossing a threshold by $1 puts you in the next tier and adds the full surcharge. For couples close to a threshold, end-of-year tax planning can sometimes save thousands. If you're nearing 65 and have meaningful flexibility in when you realize income (Roth conversions, capital gains harvesting, etc.), the IRMAA tiers should factor into your planning.
The life-changing event appeal
If your current income is much lower than 2 years ago because of a qualifying life event, you can appeal IRMAA using Form SSA-44. Qualifying events include:
- Marriage, divorce, or death of a spouse
- You or your spouse stopped working or reduced hours
- You or your spouse lost income from an employer (pension reduction, etc.)
- You or your spouse lost income-producing property (not from a sale)
- Loss of a pension
- Termination of an annuity contract for permanent disability or other qualifying events
This is a real and very useful tool. Many newly-retired people automatically owe IRMAA in their first year of Medicare based on their last year of work income — and the SSA-44 appeal almost always succeeds because retirement is a qualifying event. Don't pay IRMAA you don't have to.
How to find out if you'll owe IRMAA
Two things to do:
- Use our free IRMAA calculator with your 2024 MAGI to see your 2026 estimated surcharge.
- Watch for the Initial IRMAA Determination Notice from Social Security after you enroll. This is the document that tells you the official amount you owe.
Strategies to reduce IRMAA exposure
Some legitimate, legal strategies for managing IRMAA:
- Roth conversions timed before age 63. Income from a Roth conversion is taxable in the year you do it. Doing conversions before age 63 (since IRMAA is based on income from 2 years prior, and Medicare starts at 65) avoids the conversion spiking your Medicare IRMAA.
- Qualified charitable distributions (QCDs) from an IRA. If you're charitably inclined and over 70½, you can give up to $108,000/year directly from your IRA to charity — and the distribution doesn't count toward MAGI.
- Capital gains harvesting timing. If you have control over when you sell appreciated assets, spreading sales across years or timing them under IRMAA thresholds can save thousands.
- Tax-aware withdrawal sequencing in retirement. Drawing from taxable accounts first and Roth accounts last (within reason) can keep your taxable income lower in the years that matter.
This kind of planning is most valuable when coordinated with a tax professional and financial advisor who understand Medicare. We're happy to be a resource on the Medicare side of this conversation.
The bottom line
IRMAA affects a small percentage of beneficiaries but can add real money to your Medicare costs. Three takeaways:
- If you might be subject to IRMAA in your first year of Medicare, file Form SSA-44 immediately if retirement triggered the spike. Most appeals succeed.
- Plan ahead. The 2-year look-back means income decisions you make at 63 affect your 65 premium.
- Don't let IRMAA drive your overall financial plan. It's a real consideration, but for most people the smarter long-term moves (Roth conversions, tax diversification) sometimes mean accepting some IRMAA in the short term.