Overview
IRMAA (Income-Related Monthly Adjustment Amount) is a surcharge added to your Medicare Part B and Part D premiums once your income crosses certain thresholds. It's not a tax, technically — it's a Medicare premium adjustment — but it functions like one, and it's one of the most commonly mismanaged costs in retirement because of a two-year delay that catches people off guard.
Why It Matters
IRMAA is a cliff, not a gradual scale. Crossing a threshold by even $1 triggers the full surcharge for that entire tier — there's no phase-in. And because your premium is based on your tax return from two years earlier, a single high-income year (a big Roth conversion, a large capital gain, the year you retired with a partial paycheck) can quietly set your Medicare premium two years down the road, often before you've connected the two events.
How It Works
- IRMAA uses Modified Adjusted Gross Income (MAGI): your AGI plus tax-exempt interest.
- Your 2026 premium is based on your 2024 tax return. A 2026 decision (like a Roth conversion) affects your 2028 premium — always think two years ahead.
- If you've had a "life-changing event" (retirement, divorce, death of a spouse, loss of pension income) that makes your two-year-old tax return no longer representative, you can file Form SSA-44 to have Social Security use more recent income instead of waiting out the lookback.
- Married couples where both spouses are on Medicare each pay their own IRMAA surcharge — a single household income event can effectively double the cost.
2026 Key Numbers
- Standard Part B premium: $202.90/month.
- IRMAA thresholds begin at $109,000 MAGI (single) or $218,000 (married filing jointly) — based on 2024 income.
- Five tiers total, topping out at $500,000 (single) / $750,000 (joint), where total Part B runs up to roughly $689.90/month; Part D surcharges range from $14.50 to $91/month.
- Married filing separately has a harshly compressed 3-tier structure — a couple filing separately can hit a high surcharge tier at a much lower combined income than joint filers.
Common Mistakes
- Doing a large Roth conversion or Traditional-to-Roth rollover without checking where it lands relative to the IRMAA thresholds two years out
- Not filing Form SSA-44 after a legitimate life-changing event, simply because the surcharge notice arrives automatically and people assume it's final
- Forgetting that both spouses on Medicare pay separately — modeling household income without doubling the surcharge impact
- Filing married filing separately without checking the compressed IRMAA brackets that apply to that status
Sources
- CMS — 2026 Medicare Parts A & B Premiums and Deductibles (official)
- Kiplinger — Medicare Premiums 2026: IRMAA Brackets and Surcharges
- SSA Form SSA-44 — Medicare Income-Related Monthly Adjustment Amount Life-Changing Event
This is general education, not personalized advice. Model any income-affecting decision against the IRMAA lookback with a financial planner before acting.