Medicare is not always a flat retirement expense. For higher-income retirees, Medicare Part B and Part D premiums can increase through the Income-Related Monthly Adjustment Amount, commonly called IRMAA.
The frustrating part is timing: the surcharge for 2026 is generally based on income from your 2024 tax return. That means a Roth conversion, capital gain, business sale, large RMD, or unusually high income year can show up as a Medicare premium increase two years later.
What Is IRMAA?
IRMAA is an additional monthly amount that higher-income Medicare beneficiaries pay on top of their standard Medicare premiums. It can apply to Medicare Part B, which covers physician and outpatient services, and Medicare Part D, which covers prescription drug plans.
For many retirees, IRMAA is less about whether they can afford the surcharge and more about whether the surcharge was preventable. A single income decision can cross a threshold and raise premiums for the entire year.
IRMAA is a cliff-style surcharge. Being slightly over a threshold can produce a much larger annual premium bill than being slightly under it.
2026 Medicare Part B IRMAA Brackets
CMS announced that the standard Part B premium for 2026 is $202.90 per month. Higher-income beneficiaries pay that amount plus an income-related adjustment. The table below summarizes the 2026 full Part B coverage brackets.
| 2024 MAGI: Individual | 2024 MAGI: Joint | Monthly IRMAA | Total 2026 Part B Premium |
|---|---|---|---|
| $109,000 or less | $218,000 or less | $0.00 | $202.90 |
| Above $109,000 to $137,000 | Above $218,000 to $274,000 | $81.20 | $284.10 |
| Above $137,000 to $171,000 | Above $274,000 to $342,000 | $202.90 | $405.80 |
| Above $171,000 to $205,000 | Above $342,000 to $410,000 | $324.60 | $527.50 |
| Above $205,000 and below $500,000 | Above $410,000 and below $750,000 | $446.30 | $649.20 |
| $500,000 or above | $750,000 or above | $487.00 | $689.90 |
For married taxpayers who lived with their spouse during the year but filed separately, CMS lists only three full Part B coverage tiers: $202.90 at $109,000 or less, $649.20 above $109,000 and below $391,000, and $689.90 at $391,000 or above.
2026 Medicare Part D IRMAA Brackets
Part D IRMAA is separate from your actual prescription drug plan premium. If it applies, it is paid in addition to the premium charged by your Part D plan.
| 2024 MAGI: Individual | 2024 MAGI: Joint | Monthly Part D IRMAA |
|---|---|---|
| $109,000 or less | $218,000 or less | $0.00 |
| Above $109,000 to $137,000 | Above $218,000 to $274,000 | $14.50 |
| Above $137,000 to $171,000 | Above $274,000 to $342,000 | $37.50 |
| Above $171,000 to $205,000 | Above $342,000 to $410,000 | $60.40 |
| Above $205,000 and below $500,000 | Above $410,000 and below $750,000 | $83.30 |
| $500,000 or above | $750,000 or above | $91.00 |
For married taxpayers filing separately, the 2026 Part D IRMAA is $0.00 at $109,000 or less, $83.30 above $109,000 and below $391,000, and $91.00 at $391,000 or above.
Why the Two-Year Lookback Matters
Social Security generally uses IRS tax return information from two years prior to determine IRMAA. For 2026 premiums, that usually means your 2024 modified adjusted gross income.
This lookback creates a planning mismatch. You might retire in 2026 with much lower current income, but still receive an IRMAA notice because your 2024 income was high. Conversely, a major income event in 2026 may not affect Medicare premiums until 2028.
What Can Push Retirees Over an IRMAA Threshold?
IRMAA planning is really income planning. The common triggers are often legitimate, even beneficial, but they should be modeled before year-end.
- Roth conversions: Conversions can be valuable, but they increase taxable income in the year of conversion.
- Required minimum distributions: RMDs can push retirees over a bracket after age 73 or 75, depending on birth year.
- Capital gains: Selling appreciated stock, real estate, or concentrated positions can raise MAGI.
- Business or property sales: A liquidity event may trigger both capital gains and Medicare surcharge consequences.
- Interest and dividends: Portfolio income can matter more once employment income ends and tax planning becomes more flexible.
Planning Moves to Consider
The goal is not always to avoid IRMAA at all costs. Sometimes paying a surcharge is acceptable if the broader tax or investment decision is strong. The key is making the decision with full visibility.
- Bracket-aware Roth conversions: Model conversions against federal tax brackets, capital gain brackets, and IRMAA thresholds.
- Harvest gains deliberately: Spread large gains across years when practical instead of creating one unusually high MAGI year.
- Use qualified charitable distributions: For eligible IRA owners, QCDs can satisfy RMDs while reducing taxable income.
- Coordinate withdrawal order: Taxable, tax-deferred, and Roth accounts each affect Medicare premiums differently.
- Plan before age 63: Because of the two-year lookback, income decisions around age 63 can affect first-year Medicare costs at age 65.
If your income dropped because of a qualifying life-changing event, such as retirement, marriage, divorce, death of a spouse, or loss of pension income, you may be able to ask Social Security to review the IRMAA determination using Form SSA-44.
Why This Matters for Reno Retirees and Business Owners
Nevada's lack of state income tax is a major planning advantage, but it does not eliminate federal income tax or Medicare premium surcharges. For Reno and Lake Tahoe households with business exits, concentrated stock, real estate sales, or high retirement account balances, IRMAA can become part of the same conversation as Roth conversions, charitable giving, and portfolio withdrawals.
That is especially true for clients who retire before Medicare begins. The window between retirement and Medicare eligibility can be a powerful planning period, but only if income is coordinated before the relevant lookback years are already locked in.
IRMAA Planning Checklist
- Estimate your current-year MAGI and compare it to the IRMAA thresholds that will apply two years later.
- Model Roth conversions before executing them, especially if you are within $10,000 to $25,000 of a threshold.
- Review large capital gains, business sale proceeds, and real estate transactions before year-end.
- Consider whether charitable strategies, including QCDs when eligible, can reduce future taxable income.
- If you receive an IRMAA notice after retirement or another qualifying life event, review whether Form SSA-44 may apply.
Official Sources
- CMS: 2026 Medicare Parts A & B Premiums and Deductibles
- Medicare.gov: What does Medicare cost?
- Social Security Handbook: MAGI information used for IRMAA determinations
- SSA Form SSA-44: Medicare Income-Related Monthly Adjustment Amount Life-Changing Event
IRMAA planning works best as part of a broader retirement income plan. GK Wealth Management helps high-income households coordinate portfolio withdrawals, Roth conversions, charitable giving, and tax-aware retirement income strategies. If you are approaching Medicare age or managing a major income event, schedule a conversation to review the moving parts.