How IRMAA Works (The Part Most People Miss)
IRMAA is based on your Modified Adjusted Gross Income (MAGI)—which is your Adjusted Gross Income from your tax return, plus any tax-exempt interest.
As of 2026, you start paying IRMAA surcharges if your income exceeds:
$109,000 (single)
$218,000 (married filing jointly)
The surcharges are tiered. The more you earn, the more you pay:
Part B surcharges: Range from about $81.20 to $487.00+ per month, per person
Part D surcharges: Range from about $14.50 to $91.00+ per month, per person
If you're married, that means both of you pay the surcharge. A high-income couple could be paying an extra $1,000+ per month compared to the base premium.
The Two-Year Lag (AKA the Sneaky Part)
Here's where it gets tricky:
Your 2026 IRMAA surcharge is based on your 2024 income.
There's a two-year lag between when you earn the income and when you pay the penalty.
Why This Matters
Let's say you're turning 65 in 2026 and enrolling in Medicare. The income that determines whether you pay IRMAA? Your 2024 tax return—which you filed when you were 63.
Most people don't realize this until they get the bill. By then, it's too late to do anything about it.
Where I See Clients Get Hit (Real Examples)
1) The Big Roth Conversion Year
I had a client do a massive Roth conversion at age 64—$300k in one year. Smart move for long-term tax planning, right?
Except it pushed him way over the IRMAA threshold. For the next year, he paid an extra $5,000+ in Medicare surcharges he wasn't expecting.
The fix? We could have spread that conversion over multiple years before age 63, avoiding most of the IRMAA hit.
2) The Deferred Comp Payment
Another client retired at 62 and had deferred compensation paid out at 64. She didn't connect the dots that this would spike her MAGI two years later—right when she went on Medicare.
The fix? If we'd known, we could have structured the payout to come earlier or spread it differently to minimize IRMAA.
3) The One-Time Capital Gain
I've seen clients sell a rental property or take a large capital gain in their early 60s without realizing it would trigger IRMAA. One year of bad timing = two years of surcharges.
How to Avoid (or Minimize) IRMAA
If you're approaching Medicare age—or already on it—here's what I recommend:
1) Start Planning at Age 63 (Not 65)
Remember the two-year lag. The year you turn 63 is when your "IRMAA clock" starts. That's when we need to get strategic about managing taxable income.
2) Front-Load Roth Conversions
If you're planning to do Roth conversions in retirement, consider doing them before you turn 63. That way, the income spike happens before IRMAA matters.
3) Time Large Income Events Carefully
Deferred compensation? Stock option exercises? Sale of a business or property? If possible, try to realize that income before age 63—or after the IRMAA surcharge period ends (if you're no longer earning high income in retirement).
4) Watch for "IRMAA Bracket Creep"
Sometimes you're just barely over a threshold. In those cases, we can look for deductions or income-smoothing strategies to drop you into a lower IRMAA bracket. Even saving $1 in MAGI can save you thousands in surcharges if it bumps you down a tier.
5) File a Reconsideration Request (If Life Changes)
If your income dropped due to retirement, divorce, death of a spouse, or other "life-changing events," you can appeal to Social Security and potentially get your IRMAA reduced based on your current income instead of the two-year-old number.
Most people don't know this option exists.
The Bottom Line
IRMAA isn't going away. And if you're a high earner approaching retirement, it's one of the biggest "hidden" costs you'll face in Medicare.
But it's also one of the most plannable.
The key? Start thinking about it at 63, not 65. By the time you're enrolling in Medicare, the income that determines your surcharges is already locked in.
Approaching Medicare and want to see if there are planning opportunities to minimize IRMAA? Let's run the numbers together. Often, a little bit of proactive planning at age 63-64 can save you thousands per year once you're on Medicare.
Disclosures: This article is for educational purposes only and is not individualized tax, legal, or investment advice. Rules can change and plan provisions vary—please consult your tax professional and/or financial advisor about your specific situation.