IRMAA Explained: Why Medicare Premiums Jump With Income

A Medicare Surprise That Catches Good Savers Off Guard

Most people plan carefully for Medicare's basic costs — the Part B premium, the deductible, what a Supplement or Advantage plan will run them. Then a letter arrives saying their premium is actually two, three, or even four times the standard amount, and they're left wondering what happened. What happened is IRMAA: the Income-Related Monthly Adjustment Amount. It's one of the few places where being a diligent saver can quietly cost you more in retirement, and it catches people off guard because it isn't based on this year's income at all.

What IRMAA Actually Is

IRMAA is a surcharge added on top of the standard Medicare Part B and Part D premiums for people whose income is above certain thresholds. For 2026, the standard Part B premium is $202.90 a month. If your income is above the threshold, Medicare adds a surcharge on top of that — the more your income exceeds the threshold, the larger the surcharge, up through several tiers.

For 2026, here's how the individual-filer brackets break down, based on income:

• $109,000 or less: no surcharge — standard $202.90/month
• $109,001–$137,000: total premium $284.10/month
• $137,001–$171,000: total premium $405.80/month
• $171,001–$205,000: total premium $527.50/month
• $205,001–under $500,000: total premium $649.20/month
• $500,000 and above: total premium $689.90/month

For married couples filing jointly, those income thresholds roughly double: $218,000, $274,000, $342,000, $410,000, and $750,000. Part D prescription drug plans carry their own, smaller IRMAA surcharge on the same income brackets.

The Part That Trips People Up: The Two-Year Lookback

This is the detail that causes the most confusion. Medicare doesn't look at your current income to set this year's premium — it looks at your tax return from two years ago. Your 2026 Medicare premium is based on your 2024 income. That lookback is exactly why so many new retirees get hit unexpectedly: the year before or right when they retired, they may have had a higher income from a full salary, a bonus, or a large one-time event, and that number is what's determining today's premium — even though their income has since dropped.

What Can Trigger an Unexpected Surcharge

Because IRMAA looks at total taxable income — not just wages — a number of ordinary retirement moves can bump you into a higher bracket without you realizing it in the moment:

• A large Roth conversion done in a single tax year
• Selling an investment property or other asset with a large capital gain
• A required minimum distribution from a large retirement account
• A final year of full salary before retiring

None of these are mistakes — they're often smart moves for other reasons. But it helps to know, going in, that they can echo into a higher Medicare premium two years later.

What You Can Actually Do About It

• Ask for a life-changing-event redetermination. If your income has dropped since the year IRMAA is based on — due to retirement itself, a spouse's death, marriage, divorce, or a few other qualifying events — you can file Form SSA-44 with the Social Security Administration to have your premium recalculated using more current income instead of the two-year-old number.
• Think about the timing of big income events. If you know a Roth conversion, asset sale, or large withdrawal is coming, it's worth asking how it might affect your Medicare premium two years out, alongside its other tax effects.
• Build IRMAA into your retirement income plan, not just your tax plan. The goal isn't to avoid all taxable income — it's to see the full picture, including this less-visible cost, before you decide how and when to draw from different accounts.

The Takeaway

IRMAA isn't a penalty for doing something wrong — it's simply how Medicare funds itself for higher earners, using a two-year-old snapshot of your income. The retirees who navigate it most comfortably are the ones who know it's coming and plan their income timing with it in mind, rather than being surprised by a letter in the mail.

If you'd like a second set of eyes on how your income sources might affect your future Medicare premiums, we're happy to talk through it — no pressure, just clarity.

Sources: Centers for Medicare & Medicaid Services, "2026 Medicare Parts A & B Premiums and Deductibles" (cms.gov). This article is educational only and not personalized financial, tax, or legal advice.