For many disciplined savers, the retirement they built can carry unexpected costs, especially when the way Medicare calculates income affects premiums through a surcharge called IRMAA.
What Is IRMAA?
IRMAA stands for Income-Related Monthly Adjustment Amount. It is an extra charge on Medicare Part B and Part D premiums if your modified adjusted gross income (MAGI) crosses certain thresholds. The key wrinkle is that Medicare uses a two-year lookback. Your 2026 Medicare cost is based on your 2024 MAGI.
Here are the 2026 IRMAA thresholds and surcharges for married couples filing jointly:
| 2024 MAGI (MFJ) | Part B Premium (per person, monthly) | Part D Surcharge (per person, monthly) | Combined Annual Impact (Couple) |
|---|---|---|---|
| ≤ $218,000 | $202.90 | $0.00 | $0 |
| $218,001–$274,000 | $284.10 | $14.50 | $2,297 |
| $274,001–$342,000 | $405.80 | $37.50 | $6,578 |
| $342,001–$410,000 | $527.50 | $60.40 | $10,860 |
| $410,001–$750,000 | $649.20 | $83.30 | $15,142 |
| ≥ $750,001 | $689.90 | $91.00 | $16,574 |
Why It Feels Different
For those who saved consistently and built significant retirement balances, IRMAA can feel like the system is singling you out. The very discipline that allowed you to build wealth now shows up as higher Medicare premiums, while others who did not accumulate as much avoid the surcharges.
Whether it feels fair or not, this is simply how the Medicare formula interacts with the financial life you built.
RMD Timing Under SECURE 2.0
Required Minimum Distributions (RMDs) no longer begin at age 72 for most retirees. Under current law:
If you were born 1951–1959, RMDs begin at age 73.
If you were born 1960 or later, RMDs begin at age 75.
This means many approaching retirement today will not face RMDs until their early to mid-70s. That timing is important when weighing Roth conversions, projecting future tax brackets, and anticipating IRMAA exposure.
Windows of Opportunity
One of the best planning windows closes on December 31 of the year you turn 62. Income taken before that date will never affect your Medicare premiums. Starting with the calendar year you turn 63, income on your tax return can be used to calculate Medicare costs once you reach age 65.
That makes the years up to and including the year you turn 62 a prime time to consider Roth conversions, selling appreciated assets, or realizing other income without worrying about IRMAA down the road.
And if you work past 65 with employer health coverage, you may be able to delay Medicare enrollment. When you eventually retire, Form SSA-44 can be used to appeal IRMAA based on reduced income.
Appealing IRMAA with Form SSA-44
IRMAA is adjustable when income drops due to a qualifying life event. If your income falls due to a life event, the Social Security Administration allows you to appeal using Form SSA-44 and potentially lower your surcharge.
Common qualifying life changes include:
Retirement or a reduction in work hours
Death of a spouse
Marriage or divorce
Loss of pension or property income
Form SSA-44 requires you to submit documentation of the life event, along with an estimate of your new, lower income. For example, a retiree working into their late 60s may face IRMAA based on a high-income year. Filing SSA-44 after retirement can reset their Medicare premiums to reflect their lower income, potentially saving thousands per year.
The adjustment process exists for a reason. Life changes, and Medicare premiums are designed to adjust when income truly declines.
Strategies That Work
Managing IRMAA is less about eliminating it entirely and more about making deliberate tradeoffs. Strategies include:
Withdrawal sequencing: Ordering distributions from taxable, tax-deferred, and Roth accounts in a way that balances cash flow, taxes, and Medicare impact.
Roth conversions: Converting portions of IRA balances in years when the long-term benefit outweighs the short-term surcharge.
Charitable strategies: Using Qualified Charitable Distributions (QCDs) to give directly from IRAs or bunching gifts into a donor-advised fund in high-income years.
Capital gain timing: Managing the sale of appreciated assets to avoid bunching large gains into a single tax year that pushes income above IRMAA thresholds.
A Practical Example
Suppose a couple has $3 million in traditional IRAs. At age 73, their first RMD will be slightly under 4 percent of the balance, or roughly $113,000. That income, combined with Social Security, may move them into higher tax brackets and create recurring IRMAA exposure.
If they complete a $100,000 Roth conversion at age 64 in 2026 and move into the second IRMAA threshold, their income that year will increase, and in 2028 they will pay roughly $2,300 in additional IRMAA surcharges.
The benefit is that $100,000 is removed from the tax-deferred balance, which means future RMD calculations begin from a lower base. Once distributions start, annual RMDs may be about $3,000 to $4,000 lower, not accounting for future growth. As the IRS divisor declines each year, the distribution percentage increases, and the long-term effect compounds. Over a decade or more, the cumulative reduction in taxable distributions can reasonably reach $30,000 to $40,000.
If those reductions occur while the couple is in a 24 percent tax bracket, the avoided taxes could amount to $7,200 to $9,600, or more when accounting for growth and increased distribution rates, over ten years. That does not even account for the compounding effect if the Roth money continues to grow tax-free.
The Roth conversion also creates flexibility for heirs. Over time, the one-time IRMAA surcharge can be outweighed by years of tax savings and planning advantages.
It is not about optimizing for the short-term. It is about trading a one-time surcharge today for years of tax reduction and flexibility tomorrow.
Why Guidance Matters
No single decision, whether a Roth conversion, a withdrawal, or an asset sale, should stand alone. What matters is understanding how each move fits into the broader picture.
For some households, paying a higher Medicare premium for a year or two is entirely reasonable if it reduces lifetime taxes. For others, staying below a threshold may be the wiser choice.
This is where a comprehensive plan matters. The best results often come from coordinating tax strategy, retirement income planning, and Medicare considerations together. I often work alongside CPAs and other specialists to evaluate scenarios, model long-term outcomes, and ensure that strategies are carried out correctly. The objective is not to drift into higher premiums unintentionally, but to make thoughtful decisions that serve your broader priorities.
About Weston Haaf, CFP®
Weston Haaf is the founder of Vantage Wealth Management and a CERTIFIED FINANCIAL PLANNER™ professional. He helps quietly successful couples—typically between $1 million and $15 million+ in assets—navigate retirement, tax strategy, and major financial transitions with clarity and purpose. Weston lives in Sunnyvale, TX, and believes great planning is as much about values and relationships as it is about numbers.
This post is for informational purposes only and is not intended as personalized financial, tax, or legal advice. Vantage Wealth Management is a registered investment advisor in the state of Texas. Registration does not imply any level of skill or training. Always consult with a qualified professional before making decisions based on this content.