Most retirees understand that Medicare has premiums, but far fewer anticipate the income-related surcharges that can dramatically increase those costs for higher earners. The Income-Related Monthly Adjustment Amount, known as IRMAA, is a surcharge added on top of the standard Medicare Part B and Part D premiums for individuals and couples whose income exceeds certain thresholds. For retirees with large traditional IRAs, the trigger that activates IRMAA is often a required minimum distribution, a Roth conversion, or a one-time asset sale. At Q3 Advisors, we help IRA millionaires understand and proactively plan around IRMAA before it hits.
What Is IRMAA and How Does It Work?
IRMAA is not a penalty. It is a means-tested premium adjustment that applies to Medicare Part B (outpatient medical coverage) and Medicare Part D (prescription drug coverage) for beneficiaries whose income exceeds the applicable thresholds. The Social Security Administration determines your IRMAA status each year based on your Modified Adjusted Gross Income (MAGI) from two years prior. For IRMAA purposes, MAGI is your Adjusted Gross Income (Form 1040, Line 11) plus tax-exempt interest (Line 2a), so anything that increases AGI, including traditional IRA distributions and Roth conversions, also increases IRMAA MAGI.
For example, if you enroll in Medicare in 2026, your 2026 premiums are determined by your 2024 tax return. This two-year lookback creates a situation where income spikes, such as a large Roth conversion or a business sale, can unexpectedly push you into a higher IRMAA tier two years after the event. Understanding this lag is essential for income planning in the years surrounding Medicare enrollment.
2026 IRMAA Brackets and Surcharge Amounts
CMS released the 2026 Medicare premium and IRMAA figures on November 14, 2025. For 2026, the standard Medicare Part B premium is $202.90 per month, up from $185.00 in 2025. The annual Part B deductible is $283. IRMAA applies on top of these amounts based on 2024 MAGI.
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The thresholds widened modestly for 2026 (the first-tier threshold rose from $106,000 to $109,000 for single filers), but the surcharge dollar amounts grew by roughly 9%. The full 2026 schedule for Part B and Part D is below.
2026 Part B IRMAA (full coverage):
- Tier 1 (no IRMAA): Single MAGI ≤ $109,000 / Joint ≤ $218,000. Total Part B premium: $202.90/month.
- Tier 2: Single $109,001 — $137,000 / Joint $218,001 — $274,000. IRMAA: $81.20/month. Total Part B: $284.10/month.
- Tier 3: Single $137,001 — $171,000 / Joint $274,001 — $342,000. IRMAA: $202.90/month. Total Part B: $405.80/month.
- Tier 4: Single $171,001 — $205,000 / Joint $342,001 — $410,000. IRMAA: $324.60/month. Total Part B: $527.50/month.
- Tier 5: Single $205,001 — $499,999 / Joint $410,001 — $749,999. IRMAA: $446.30/month. Total Part B: $649.20/month.
- Tier 6 (highest): Single ≥ $500,000 / Joint ≥ $750,000. IRMAA: $487.00/month. Total Part B: $689.90/month.
2026 Part D IRMAA (added on top of your Part D plan premium):
- Tier 1: Single ≤ $109,000 / Joint ≤ $218,000. No surcharge.
- Tier 2: $14.50/month
- Tier 3: $37.50/month
- Tier 4: $60.40/month
- Tier 5: $83.30/month
- Tier 6: $91.00/month
A married couple where both spouses are in Tier 6 pays roughly $1,380 per month combined just in Part B premiums (and more once Part D IRMAA is added) — approximately $16,500 per year in Medicare premiums alone.
The figures above are for beneficiaries filing as single, head of household, qualifying widow(er), or married filing jointly. Beneficiaries who are married, lived with their spouse during the year, and file separately face a compressed schedule with only three tiers and very low thresholds (the first IRMAA tier begins above $109,000 of MAGI). Source: CMS 2026 Medicare Parts A & B Premiums and Deductibles fact sheet.
What Income Counts Toward IRMAA?
IRMAA MAGI starts with your AGI from Form 1040, Line 11, and adds back tax-exempt interest (Form 1040, Line 2a). That means the following all count: wages, self-employment income, pension and annuity distributions, traditional IRA and 401(k) withdrawals, the taxable portion of Social Security benefits, capital gains and qualified dividends, rental income, interest from CDs and bonds, and tax-exempt municipal bond interest. Critically, it also includes Roth conversion amounts and required minimum distributions from traditional IRAs.
Several income sources are excluded from IRMAA MAGI, which makes them powerful planning tools. Qualified Roth IRA withdrawals do not count. HSA withdrawals for qualified medical expenses do not count. Loan proceeds and the non-taxable portion of Social Security are not counted. Above-the-line deductions, including HSA contributions, reduce AGI and therefore reduce IRMAA MAGI as well.
This is why large traditional IRA balances create IRMAA exposure. As your IRA grows tax-deferred over decades, the required minimum distributions you must take starting at age 73 can be substantial, and if they push your MAGI over an IRMAA threshold, you pay the surcharge. This is precisely the situation that proactive Roth conversion planning is designed to address. For more on how RMDs and conversions interact, see critical insights on Roth conversions and RMDs.
How Roth Conversions Affect IRMAA
A multi-year Roth conversion strategy can significantly reduce long-term IRMAA exposure, but it requires careful execution. When you convert traditional IRA dollars to a Roth IRA, the converted amount is added to your MAGI in the year of conversion. This means a large one-time conversion could push you into a higher IRMAA tier two years later.
The more effective approach is a series of smaller, deliberate conversions spread over several years, timed to stay just below the next IRMAA threshold. By systematically reducing your traditional IRA balance during the window between retirement and age 73 (when RMDs begin), you lower the forced distributions that will otherwise push your income higher throughout retirement. Fewer RMDs mean a lower MAGI, which means a lower (or eliminated) IRMAA surcharge.
The IRMAA cliff effect makes this planning especially important. IRMAA brackets are not graduated — crossing a threshold by even $1 triggers the entire next tier of surcharge. For example, in 2026 a married couple with $274,001 of MAGI pays $405.80 per month per spouse for Part B, while a couple at $274,000 pays $284.10 per month per spouse. That single dollar costs the couple roughly $2,920 per year in additional Medicare premiums. To understand the full Roth conversion framework, visit our overview of Roth conversion services or our guide on multi-year Roth conversions.
Appealing an IRMAA Determination
Because IRMAA is based on income from two years prior, it may not reflect your current financial situation. If your income has significantly decreased due to retirement, divorce, death of a spouse, loss of income-producing property, reduction in work hours, or a one-time income event that will not recur, you can appeal your IRMAA determination with the Social Security Administration.
This appeal, filed using Form SSA-44, allows you to use a more recent tax year or estimate your current year income as the basis for the IRMAA calculation. The appeal process is particularly important for newly retired individuals whose income drops sharply in the year they retire. It is also worth filing if a large Roth conversion in a prior year inflated your MAGI temporarily and will not repeat. Note that a Roth conversion by itself is not on SSA’s list of qualifying life-changing events for an SSA-44 appeal, so it cannot be used as the basis for a reduction; the appeal only works when a separate qualifying event reduces your current income.
IRMAA Planning Strategies for Retirement
Avoiding or minimizing IRMAA requires proactive income management. The goal is to smooth out your taxable income over time so that you never have a spike large enough to cross into a higher IRMAA tier without intentional planning.
- Plan Roth conversions below IRMAA thresholds: Work with a CFP to model exactly how much you can convert in a given year while staying just under the next IRMAA tier. Every dollar of conversion that stays in the current tier is a win.
- Manage capital gains timing: Avoid large taxable asset sales in years when you already have high IRA income or distributions. Capital gains count toward MAGI and can push you across an IRMAA bracket.
- Use qualified charitable distributions (QCDs): If you are age 70½ or older, you can transfer up to $111,000 per year (2026 limit, indexed for inflation) directly from your IRA to a qualified charity. These distributions satisfy your RMD obligation but do not count as taxable income, reducing your MAGI. Married couples can each make their own QCD from their respective IRAs. This is one of the most effective IRMAA planning tools available to retirees with charitable intent. For more, see our guide on qualified charitable distributions.
- Delay Social Security strategically: Social Security benefits are partially taxable and count toward MAGI. Delaying your claim reduces the income included in the IRMAA calculation during the years before benefits begin.
- Consider your Medicare enrollment year carefully: The year you turn 65 and enroll in Medicare is the first year you are subject to IRMAA. Because IRMAA looks back two years, consider what your income was two years prior when planning for that transition.
Frequently Asked Questions About IRMAA
Does IRMAA apply to Medicare Advantage plans?
Yes. If you enroll in a Medicare Advantage plan (Part C), you still pay the Part B premium, which includes any applicable IRMAA surcharge. The IRMAA for Part B is charged in addition to any plan premium charged by the Medicare Advantage insurer. Part D IRMAA applies if your Medicare Advantage plan includes drug coverage.
Can I reduce my IRMAA surcharge if my income changes?
Yes, through the appeal process using Form SSA-44. If you experienced a qualifying life-changing event that reduced your income, you can request that Social Security use a more recent year’s income for your IRMAA calculation. The reduction takes effect relatively quickly after SSA approves your appeal.
Are Roth IRA withdrawals included in IRMAA calculations?
No. Qualified distributions from a Roth IRA are tax-free and are not included in MAGI for IRMAA purposes. This is one of the most significant advantages of a Roth IRA or Roth 401(k) in retirement. Building up Roth assets reduces your dependence on taxable traditional IRA withdrawals, which in turn lowers your MAGI and helps you avoid or reduce IRMAA surcharges.
Is IRMAA per person or per household?
IRMAA is assessed per Medicare beneficiary. If both spouses are enrolled in Medicare, each pays their own Part B premium including any applicable IRMAA surcharge. However, the income thresholds for married couples filing jointly are higher than for individuals. A couple must have higher combined MAGI to reach the same tier that a single individual would reach at a lower income level.
What’s the difference between the 2025 and 2026 IRMAA brackets?
The 2026 IRMAA thresholds increased by roughly 3% for inflation, while the surcharge dollar amounts grew by approximately 9%. The first-tier threshold rose from $106,000 to $109,000 for single filers (and from $212,000 to $218,000 for joint filers). The standard Part B premium also increased from $185.00 to $202.90 per month. CMS announced these figures on November 14, 2025, and they took effect January 1, 2026.
Work With a Fiduciary Advisor to Minimize IRMAA
IRMAA is a significant but often overlooked cost in retirement planning. For a married couple in the highest tier, total Medicare premium costs in 2026 can exceed $16,000 per year before Part D plan premiums are added. With proper income management, many retirees can reduce or eliminate IRMAA through strategic Roth conversions, qualified charitable distributions, and careful timing of asset sales. Q3 Advisors, led by Craig Wear, CFP®, works exclusively with IRA millionaires and pre-retirees to build income strategies that minimize taxes and healthcare costs throughout retirement. Learn more about how it works when you start planning with our team.
Call (720) 730-5650 or schedule a consultation to discuss your Medicare and income planning strategy.
