What Is IRMAA? How Income Affects Your Medicare Premiums in 2026
In my previous article, When Should You Claim Social Security? A Greenville, SC CFP® Professional's Q&A Guide for Pre-Retirees, I discussed one of the most important retirement decisions many people will make: when to begin taking benefits.
That decision can also interact with something many pre-retirees have never heard of until it affects their Medicare bill: IRMAA.
For pre-retirees and retirees in Greenville and across the Upstate, IRMAA often becomes part of the same planning conversation as Social Security, Roth conversions, retirement account withdrawals, capital gains, and taxes.
Two neighbors on the same street can have the same Medicare coverage and pay very different premiums because of their income. The reason is IRMAA.
Quick Answer: What Is IRMAA?
IRMAA, or Income-Related Monthly Adjustment Amount, is an additional amount some higher-income Medicare beneficiaries pay for Medicare Part B and Part D prescription drug coverage.
For 2026, IRMAA generally applies when 2024 Modified Adjusted Gross Income, or MAGI, exceeds:
$109,000 for an individual
$218,000 for a married couple filing jointly
The important catch is that Medicare generally looks at your income from two years earlier.
That means a Roth conversion, capital gain, retirement, or other income decision you make today may affect what you pay for Medicare two years from now.
What Is IRMAA?
IRMAA is a surcharge added to Medicare costs for beneficiaries whose income exceeds certain thresholds.
It is not a penalty, and it is not optional. It is simply part of the Medicare premium structure for higher-income beneficiaries.
IRMAA can affect:
Medicare Part B, which generally covers medical and outpatient services
Medicare Part D prescription drug coverage
If your income exceeds the applicable threshold, you may pay a higher Part B premium and an additional Part D income-related surcharge.
The Part D IRMAA surcharge is paid in addition to your regular Part D plan premium.
How Much Is IRMAA in 2026?
For 2026, the standard Medicare Part B premium is $202.90 per month.
If your income is below the applicable IRMAA threshold, you generally pay the standard premium.
If your income exceeds a threshold, Medicare moves you into a higher IRMAA tier.
2026 Medicare IRMAA Brackets
These 2026 premiums generally use income reported on your 2024 federal tax return.
2024 MAGI (Single / HOH) | 2024 MAGI (Married Filing Jointly) | 2026 Part B Total Premium | 2026 Part D Monthly IRMAA Surcharge |
$109,000 or less | $218,000 or less | $202.90 | $0.00 |
$109,001 to $137,000 | $218,001 to $274,000 | $284.10 | $14.50 |
$137,001 to $171,000 | $274,001 to $342,000 | $405.80 | $37.50 |
$171,001 to $205,000 | $342,001 to $410,000 | $527.50 | $60.40 |
$205,001 to $499,999 | $410,001 to $749,999 | $649.20 | $83.30 |
$500,000 or more | $750,000 or more | $689.90 | $91.00 |
Important: The Part D amount shown above is the IRMAA surcharge. It is added to the premium for your actual Part D prescription drug plan.
Special Rules for Married Filing Separately
Married couples who file separately can face a much narrower IRMAA structure if they lived with their spouse at any point during the tax year.
2024 Modified Adjusted Gross Income (MAGI) | Married Filing Separately and Lived With Spouse During the Tax Year | 2026 Part B Monthly Premium | 2026 Part D IRMAA Monthly Surcharge |
Standard premium | $109,000 or less | $202.90 | $0.00 |
Higher tier | More than $109,000 and less than $391,000 | $649.20 | $83.30 |
Highest tier | $391,000 or more | $689.90 | $91.00 |
That is one reason married couples filing separately should have a specific conversation about Medicare and tax planning.
For a married couple with both spouses on Medicare and both in the highest IRMAA bracket, the combined Part B premiums and Part D IRMAA surcharges alone can total approximately $1,562 per month, before adding the cost of their actual Part D plans.
By comparison, two people paying the standard Part B premium would pay $405.80 per month for Part B.
The difference can add up quickly.
Why Does Medicare Use Income From Two Years Ago?
Short answer: Medicare generally uses tax information from two years earlier because that is typically the most recent verified income information available from the IRS.
For example:
2026 Medicare premiums generally use 2024 income
2027 Medicare premiums generally use 2025 income
2028 Medicare premiums generally use 2026 income
This two-year lookback is one of the most important things to understand about IRMAA.
A large Roth conversion or capital gain in 2026 may not affect your Medicare premiums until 2028.
By the time many people see the higher Medicare bill, the financial decision that caused it may be two years in the past.
That is why IRMAA is best addressed through advance planning rather than after-the-fact reaction.
What Income Counts Toward IRMAA?
Medicare generally uses your Modified Adjusted Gross Income, or MAGI.
For IRMAA purposes, MAGI is generally your:
Adjusted Gross Income + tax-exempt interest income
In practical terms, income that can affect IRMAA may include:
Wages if you are still working
The taxable portion of Social Security benefits
Withdrawals from traditional IRAs and 401(k)s
Required Minimum Distributions
Roth conversion amounts
Interest
Dividends
Capital gains
Pension income
Annuity income
Rental income
Business income
Tax-exempt municipal bond interest
That last item surprises many retirees.
Municipal bond interest may be federally tax-exempt, but it is generally added back when calculating MAGI for IRMAA purposes.
Is IRMAA a Cliff or a Gradual Phase-In?
IRMAA works more like a cliff than a marginal tax bracket.
Crossing an IRMAA threshold by even a small amount can move you into the next tier for the full year.
Unlike a marginal income tax bracket, the higher IRMAA amount applies to your Medicare premiums for the year.
That is why thresholds can matter so much during year-end planning.
One additional Roth conversion, capital gain, or large distribution in December could push you into a higher IRMAA tier two years later.
How Does IRMAA Affect Social Security Planning?
Social Security and Medicare decisions are often treated as separate planning conversations.
They really are not.
The timing of Social Security can affect your taxable income and, therefore, your MAGI.
Depending on your other income, some of your Social Security benefits may become taxable and contribute to the income Medicare uses when determining IRMAA.
There is also an important planning window between Medicare eligibility and claiming Social Security.
Many people enroll in Medicare around age 65 but delay Social Security to age 70.
During those years, they may be:
Drawing from traditional retirement accounts
Completing Roth conversions
Managing capital gains
Deciding how much income to recognize each year
All of those decisions can affect future Medicare premiums.
For couples coordinating a delayed Social Security strategy, it often makes sense to model Social Security timing and Medicare premiums together rather than treating them as separate decisions.
They are part of the same retirement income picture.
For a deeper look at Social Security claiming decisions, including the tradeoffs involved in claiming earlier or later, see When Should You Claim Social Security? A Greenville, SC CFP® Professional's Q&A Guide for Pre-Retirees.
Can Roth Conversions Trigger IRMAA?
Yes.
A Roth conversion generally adds the converted amount to your taxable income and can increase your MAGI.
Convert too much in one year, and you may move into a higher IRMAA tier two years later.
That does not mean Roth conversions are a bad idea.
For many pre-retirees, Roth conversions can be one of the most valuable planning tools available, particularly in the years between retirement and the beginning of Required Minimum Distributions.
The key is coordinating the size and timing of conversions with:
Your current tax bracket
Future expected tax rates
Future RMDs
IRMAA thresholds
Social Security
Other income sources
A large conversion may sometimes make more sense when spread across several years.
But IRMAA should not be the only factor.
When Paying IRMAA May Still Make Sense
One of the biggest mistakes people can make is treating IRMAA as something that must be avoided at all costs.
Sometimes paying IRMAA is still the financially smarter decision.
For example, a larger Roth conversion could:
Reduce future RMDs
Reduce future taxable income
Provide more tax flexibility later in retirement
Reduce the future tax burden on a surviving spouse
Improve long-term estate planning
Similarly, realizing a capital gain may be worthwhile if it helps diversify an overly concentrated investment position.
The better question is not always:
"How do I avoid IRMAA?"
Sometimes the better question is:
"Is paying this year's IRMAA worth the long-term benefit of the financial decision that caused it?"
IRMAA should be included in the calculation.
It should not automatically control the decision.
What Can I Do to Reduce or Manage IRMAA?
There are several strategies that may help manage IRMAA exposure.
Manage Your Withdrawal Mix
Roth withdrawals generally do not increase MAGI.
Having assets in multiple types of accounts can give you more flexibility to manage taxable income.
Depending on your circumstances, retirement income might come from a combination of:
Traditional retirement accounts
Roth accounts
Taxable brokerage accounts
Cash reserves
Having multiple sources gives you more options than relying entirely on traditional IRA or 401(k) withdrawals.
This is one reason I often talk with pre-retirees about diversifying not only their investments, but also the way their retirement accounts are taxed.
Having meaningful assets in traditional, Roth, and taxable accounts can provide significantly more flexibility when managing income, taxes, and Medicare premiums in retirement.
For more on tax diversification, IRA rollovers, and building a retirement strategy around different types of accounts, see Finding a Financial Advisor in Greenville, SC: A Fiduciary's Q&A on IRA Rollovers, Retirement Income, and Tax Diversification.
Size Roth Conversions Carefully
A Roth conversion that makes sense from a lifetime tax perspective may still be worth splitting across multiple years.
Before completing a conversion, it can be helpful to know:
Your projected taxable income
Your current tax bracket
How close you are to an IRMAA threshold
Whether crossing the threshold is worthwhile
Consider Qualified Charitable Distributions
If you are at least 70½ and charitably inclined, a Qualified Charitable Distribution, or QCD, can send money directly from an IRA to a qualified charity.
A QCD can count toward satisfying your Required Minimum Distribution while generally keeping the distribution out of your taxable income.
That may also help reduce MAGI and IRMAA exposure.
Watch for One-Time Income Spikes
One-time income events can sometimes create a temporary IRMAA problem.
Examples may include:
A large capital gain
A taxable gain from the sale of property
A large Roth conversion
A significant retirement account distribution
A business sale
A primary residence sale may or may not affect IRMAA depending on whether some or all of the gain is excluded under federal tax rules.
Knowing about a potential income spike in advance gives you an opportunity to consider timing and other planning strategies.
Review Your Income Before Year-End
Because IRMAA thresholds can function as cliffs, year-end planning can be particularly important.
Before realizing additional income, consider:
Capital gains
Roth conversions
Large IRA distributions
Bonus income
Business income
Other discretionary income
Sometimes it makes sense to defer income.
Sometimes it makes sense to recognize more income.
The answer depends on the broader tax and retirement plan.
What If My Income Has Dropped Since the Year Medicare Used?
If your income has dropped because of a qualifying life-changing event, you may be able to ask Social Security to reconsider your IRMAA determination.
Examples of qualifying events can include:
Work stoppage
Work reduction
Marriage
Divorce or annulment
Death of a spouse
Loss of income-producing property
Loss of certain pension income
Certain employer payments
Social Security provides Form SSA-44, Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event, for requesting a new determination.
This can be particularly important for new retirees.
Someone who retired recently may still be paying Medicare premiums based on a much higher working-year income.
If their income has dropped substantially, they may not need to simply wait two years for the Medicare premium calculation to catch up.
Does South Carolina Add Anything on Top of the Federal IRMAA Surcharge?
No.
IRMAA is part of the federal Medicare premium system.
South Carolina does not impose a separate state-level IRMAA surcharge.
However, state and federal tax planning can still interact.
South Carolina's treatment of retirement income and Social Security can affect the overall retirement tax picture, while federal MAGI determines whether IRMAA applies.
For retirees in Greenville and across the Upstate, it can be helpful to consider state taxes, federal taxes, Medicare premiums, Social Security, and retirement withdrawals together.
How Should Greenville and Upstate Pre-Retirees Think About IRMAA?
A simple framework:
1. Know Your Numbers Two Years Out
Because of the Medicare lookback, the income decisions you make today may affect Medicare premiums two years from now.
For example, decisions made in 2026 can affect your 2028 Medicare premiums.
2. Coordinate Social Security, Roth Conversions, and Medicare
These are not separate planning decisions.
They are different parts of the same retirement income picture.
Your Social Security claiming strategy can affect both your retirement income and your overall tax picture. If you haven't already, start by understanding the tradeoffs involved in deciding when to claim Social Security.
Then model that decision alongside Roth conversions, retirement account withdrawals, taxes, and potential Medicare IRMAA exposure.
3. Build Tax Flexibility Before Medicare
Having money in different types of accounts can provide more flexibility later.
For example:
Traditional retirement accounts provide tax-deferred savings.
Roth accounts can provide tax-free qualified withdrawals.
Taxable accounts may provide additional withdrawal flexibility.
The goal is not necessarily to maximize one account type.
The goal is to have options.
4. Revisit Your Plan After a Major Life Change
Retirement, widowhood, divorce, the sale of a business, or a significant income reduction can all change your Medicare and tax picture.
Some life-changing events may allow you to request an IRMAA recalculation rather than simply accepting the default premium.
5. Model IRMAA Alongside the Rest of Your Retirement Plan
IRMAA is only one piece of a larger retirement income plan.
Before focusing on a Medicare threshold in isolation, it is important to understand how your income needs, Social Security, investment accounts, taxes, and other income sources fit together.
I discuss that broader planning process in more detail in How Much Retirement Income Will You Need? A Greenville, SC Advisor's Guide.
The goal is not necessarily to pay the lowest possible Medicare premium every year.
The goal is to make decisions that improve your overall long-term financial picture.
IRMAA FAQs
Does a Roth conversion trigger IRMAA?
It can. Roth conversions generally increase taxable income and MAGI, which can cause a higher Medicare IRMAA tier two years later.
Does Social Security count toward IRMAA?
The taxable portion of Social Security benefits can contribute to Adjusted Gross Income and MAGI, which may affect IRMAA.
How far back does Medicare look at income?
Medicare generally uses tax information from two years earlier when determining IRMAA.
For example, 2026 Medicare premiums generally use 2024 tax information.
Can IRMAA be appealed?
You may be able to request a new IRMAA determination if you experience a qualifying life-changing event that significantly reduces your income. Social Security uses Form SSA-44 for this process.
Does IRMAA apply to both spouses?
Each Medicare beneficiary can be responsible for the applicable IRMAA-related Medicare costs. For married couples filing jointly, the income thresholds are based on the couple's joint MAGI.
Is it always worth avoiding IRMAA?
No.
Sometimes a Roth conversion, capital gain, or other financial decision may create an IRMAA surcharge but still improve your long-term financial situation.
IRMAA should be considered as part of the decision, not automatically avoided.
Not Ready to Talk Yet?
If you're still in the research stage, you may find The Retirement Income Roadmap helpful.
It's a free guide covering some of the biggest retirement income decisions, including:
When to claim Social Security
How to sequence retirement account withdrawals
Managing taxes in retirement
Protecting against investment risk during retirement
Creating a reliable income strategy
You can download the Retirement Income Roadmap and use it as a starting point for thinking through how these decisions fit together.
Talk With Street Wealth Management
If you're between 55 and 65 and trying to coordinate Medicare premiums, Social Security timing, Roth conversions, taxes, and retirement income, those decisions should be viewed together.
A higher Medicare premium is not always a mistake.
Sometimes paying IRMAA is worthwhile because of the larger financial benefit created by a Roth conversion or another planning decision.
The important thing is understanding the tradeoff before you make the decision.
If you'd like a second set of eyes on your retirement income strategy, you can schedule a free, no-obligation retirement income review with Street Wealth Management.
Or contact us directly:
Phone: 864-232-8111
Text: 864-301-1888
Online: streetwealthmanagement.com
About Bart Street, CFP®
Bart Street, CFP®, is the founder of Street Wealth Management in Greenville, South Carolina. He focuses on retirement income planning, tax-efficient withdrawal strategies, and helping pre-retirees and retirees coordinate decisions involving Social Security, Medicare, investments, and taxes.
He holds the Certified Financial Planner™ designation.
Securities and investment advisory services are offered through Osaic Wealth, Inc., member FINRA/SIPC.
Compliance Disclaimer
This article is for educational purposes only and is not personalized investment, tax, or legal advice. Medicare premiums, IRMAA thresholds, and tax rules are subject to change and are adjusted periodically. Specific dollar figures referenced here reflect 2026 amounts published by the Centers for Medicare & Medicaid Services and the Social Security Administration and may not reflect your specific situation. For advice tailored to your circumstances, consult a qualified professional.
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