Written by Stoic Wealth Advisors | Reviewed by Luke Rudolph, AIF®, MBA, Financial Advisor with LPL Financial

IRMAA stands for Income-Related Monthly Adjustment Amount. It is the reason two people enrolled in Medicare can pay very different monthly premiums for Part B and Part D. If your income exceeds an annual threshold, Medicare adds an income-related amount to those premiums.

The part that surprises many retirees is timing. Medicare generally uses tax-return information from two years earlier. That means a Roth conversion, a large retirement account withdrawal, a taxable capital gain, or a final high-income working year can affect Medicare costs after the income has already disappeared.

This guide explains the 2026 thresholds, what income counts, why the lookback matters, and when a lower-income year or life-changing event may support a request to reduce IRMAA.

Key Takeaways

  • IRMAA increases Medicare Part B and Part D costs when modified adjusted gross income, or MAGI, exceeds annual thresholds.
  • For 2026, SSA generally uses 2024 tax information, although different-year information may be used in certain circumstances.
  • IRMAA has discrete income tiers. Crossing a threshold can trigger the full surcharge for the next tier.
  • Roth conversions, required minimum distributions, taxable capital gains, and large traditional retirement-account withdrawals can increase MAGI.
  • A qualifying life-changing event, including retirement or reduced work, may allow you to request a lower IRMAA using Form SSA-44.

What Is IRMAA?

IRMAA is an additional Medicare amount paid by higher-income beneficiaries. It is added to the standard Part B premium and, when applicable, to the beneficiary’s Part D premium. It is not a penalty for wrongdoing. It is part of Medicare’s income-related premium structure.

For 2026, the standard Medicare Part B premium is $202.90 per month. CMS estimates that about 8% of Medicare beneficiaries pay an income-related adjustment. The Centers for Medicare & Medicaid Services’ 2026 fact sheet provides the official premium and IRMAA amounts.

2026 IRMAA Income Thresholds and Premiums

For most beneficiaries, 2026 IRMAA is based on 2024 MAGI.

2024 MAGI, Single 2024 MAGI, Married Filing Jointly 2026 Total Part B Premium Monthly Part D IRMAA
$109,000 or less $218,000 or less $202.90 $0
Over $109,000 to $137,000 Over $218,000 to $274,000 $284.10 $14.50
Over $137,000 to $171,000 Over $274,000 to $342,000 $405.80 $37.50
Over $171,000 to $205,000 Over $342,000 to $410,000 $527.50 $60.40
Over $205,000 to under $500,000 Over $410,000 to under $750,000 $649.20 $83.30
$500,000 or more $750,000 or more $689.90 $91.00

IRMAA uses tiered thresholds rather than a gradual phase-in. If MAGI moves into the next tier, the corresponding monthly adjustment applies rather than only applying to the dollars above the threshold. That is why relatively small changes in taxable income can sometimes have an outsized effect on Medicare costs.

Why the Two-Year Lookback Matters

SSA generally obtains income information from the IRS using the tax return for the two years preceding the premium year. For 2026, that usually means 2024 MAGI. If that information is unavailable, SSA may use other available tax-year information, and qualifying life-changing events may allow a beneficiary to request consideration of more current income.

This creates a planning mismatch. A physician may work through 2024, retire in 2025, and have a far lower income by 2026, yet the initial 2026 IRMAA determination may still reflect the higher 2024 income.

The same issue can arise after a large Roth conversion or a retirement account withdrawal. A transaction that appears to be finished can affect Medicare premiums two years later.

What Income Counts Toward IRMAA?

For IRMAA, MAGI generally means adjusted gross income plus tax-exempt interest. Income that can affect MAGI includes:

  • Traditional 401(k), 403(b), and IRA distributions, including required minimum distributions
  • Taxable amounts from Roth conversions
  • Taxable capital gains from investments, property, or a business sale
  • Interest, dividends, rental income, and other reportable income
  • The taxable portion of Social Security benefits

Qualified Roth withdrawals generally do not increase MAGI. However, converting traditional retirement funds to Roth is generally taxable in the conversion year and can increase IRMAA exposure later.

A home sale requires extra care. Selling a primary residence does not automatically increase IRMAA. Only gains that are included in income can affect MAGI. Under current federal rules, eligible homeowners may exclude up to $250,000 of gain, or up to $500,000 for many married couples filing jointly, when applicable requirements are met. The IRS guidance on the sale of a main home explains the exclusion.

Retirement Moves That Can Increase IRMAA

Roth conversions

A Roth conversion can support long-term tax planning, but the taxable portion of the conversion increases income in the conversion year. Large conversions can, therefore, move a retiree into a higher IRMAA tier two years later.

Required minimum distributions

RMDs from traditional retirement accounts generally enter taxable income. Once they begin, they can push MAGI above an IRMAA threshold when combined with Social Security, pensions, investment income, or other distributions.

Large taxable gains

Selling investments, a business, or investment property, or realizing a taxable gain from a home sale, can temporarily increase MAGI. The important distinction is taxable gain, not merely the fact that an asset was sold.

These outcomes do not mean the underlying transaction is a mistake. IRMAA is one factor to evaluate alongside taxes, investment strategy, estate planning, liquidity, and retirement-income needs.

Can You Appeal or Reduce IRMAA?

In certain circumstances, yes. If household income has declined because of a qualifying life-changing event, you can ask Social Security to use more current income information by filing Form SSA-44.

Recognized events include marriage, divorce or annulment, death of a spouse, work stoppage, work reduction, loss of income-producing property, loss of pension income, and an employer settlement payment. The Social Security Administration’s IRMAA guidance explains how to request a reduction.

Retirement can qualify as a work stoppage or work reduction. Approval is not automatic. SSA reviews the event, supporting documentation, and income information before determining whether the adjustment should change.

A temporary income spike alone does not necessarily qualify as a life-changing event. For example, realizing a large capital gain does not automatically create eligibility for an SSA-44 reduction merely because income falls the following year.

Where IRMAA Fits Into Retirement Planning

IRMAA rarely exists in isolation. It can interact with Roth conversion timing, required minimum distributions, Social Security, capital gains, charitable giving, and the order in which retirement accounts are used. Planning before Medicare enrollment can also help retirees carefully compare trade-offs among taxes, cash flow, charitable goals, and future healthcare expenses.

Stoic Wealth Advisors works with physicians and other healthcare professionals throughout Arizona to evaluate how retirement-income decisions fit together. For a broader planning context, see our guide to retirement planning strategies.

Investing involves risk, including possible loss of principal. Medicare premiums, IRMAA thresholds, tax rules, and retirement-plan rules can change. This article is educational and does not constitute individualized financial, investment, tax, or legal advice. Stoic Wealth Advisors and LPL Financial do not provide tax or legal advice.

Trying to Plan Around IRMAA?

If you are approaching Medicare, considering a Roth conversion, or wondering how future withdrawals could affect premiums, evaluate Medicare costs alongside taxes rather than after an IRMAA notice arrives. Schedule a conversation with Luke Rudolph to discuss how your retirement-income timeline fits into the broader plan. Please consult your tax advisor regarding your specific situation.

Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.

Frequently Asked Questions

What does IRMAA stand for?

IRMAA means Income-Related Monthly Adjustment Amount. It is an additional amount charged on top of Medicare Parts B and D when income exceeds applicable thresholds.

How is IRMAA calculated?

SSA generally uses MAGI from a federal tax return two years before the premium year. It then places the beneficiary into the applicable income tier. Different information can be used in certain circumstances.

Can Roth IRA withdrawals trigger IRMAA?

Qualified Roth IRA withdrawals generally do not increase MAGI. Roth conversions are different because taxable conversion amounts generally increase income in the year of conversion.

Does IRMAA apply forever once triggered?

No. IRMAA is determined annually. If income later falls into a lower tier, the income-related adjustment can decrease or disappear in a later premium year.

What if my IRMAA determination is wrong?

If income fell because of a qualifying life-changing event, SSA-44 may allow you to request a new determination. If you believe SSA used incorrect information or made another error, review your notice for reconsideration or appeal instructions.