Many retirees are surprised to find their Medicare premiums are higher than the standard amount. The reason is often IRMAA.
What IRMAA is
IRMAA stands for Income-Related Monthly Adjustment Amount. It's a surcharge added to Medicare Part B and Part D premiums when your income is above certain levels.
The two-year lookback
Social Security generally uses your modified adjusted gross income (MAGI) from your tax return two years earlier. Your 2026 premiums, for example, are generally based on your 2024 income.
Thresholds
IRMAA applies in tiers. The current year's income brackets and surcharges are listed on our IRMAA planning page and are sourced from CMS.
Life-changing events
If your income dropped because of a qualifying life-changing event, such as retirement, the death of a spouse or the loss of a pension, you can ask Social Security to use more recent income by filing Form SSA-44.
Decisions that can move MAGI
Roth conversions, large capital gains, the sale of a business or property, and large IRA withdrawals can all increase MAGI in the year they happen. Spreading some decisions over several years may make a difference. Every situation is different.
Coordinating with your tax professional
IRMAA sits where retirement income, taxes and Medicare meet. With your permission, we coordinate with your tax professional. Renaud & Company, LLC does not provide tax advice. To talk through your situation, call (636) 240-5055 or learn about financial planning in O'Fallon. We are fiduciaries.
Renaud & Company, LLC is an SEC-registered investment adviser. Registration does not imply a certain level of skill or training. This material is for educational purposes only and is not individualized investment, tax or legal advice. Investing involves risk, including possible loss of principal.