IRMAA, the Income-Related Monthly Adjustment Amount, is a surcharge Medicare adds to your Part B and Part D premiums when your income crosses certain thresholds. It is based on your modified adjusted gross income (MAGI) from two years earlier, so the income you report today sets what you pay for Medicare down the road.
For a high-income couple, IRMAA can add more than $13,000 a year to Medicare costs. Most surprise surcharges come from a single year of elevated income that nobody checked against the thresholds, which means they are usually avoidable. Four planning moves do most of the work:
- Sizing Roth conversions to the threshold
- Giving through qualified charitable distributions (QCDs)
- Timing capital gains deliberately
- Filing Form SSA-44 after a life-changing event
Below, we explain how the lookback works, lay out the 2026 brackets, cover what triggers a surcharge, and walk through an example showing how these moves fit together.
How the Two-Year Lookback Works
Social Security sets your IRMAA each year using the most recent tax return the IRS provides, which is usually from two years prior. Your 2026 premiums are based on your 2024 return, and your 2028 premiums will be based on what you report for 20261.
That lag has two practical consequences. First, planning starts at 63, because income at 63 sets your premiums in your first year of Medicare at 65. Second, the cost of a decision shows up long after you make it. A Roth conversion completed this December will not affect your premiums until two years from now, which is why it is easy to overlook.
IRMAA also uses its own definition of MAGI: your adjusted gross income plus tax-exempt interest2. Municipal bond interest that never shows up on your federal tax bill still counts toward IRMAA.
2026 IRMAA Brackets and What They Cost
| Tier | Individual MAGI | Joint MAGI | Part B Monthly Premium (Surcharge) | Part D Monthly Surcharge | Annual Surcharge per Person | Annual Surcharge per Couple |
|---|---|---|---|---|---|---|
| Base | $109,000 or less | $218,000 or less | $202.90 ($0) | $0 | $0 | $0 |
| Tier 1 | $109,001 to $137,000 | $218,001 to $274,000 | $284.10 ($81.20) | $14.50 | $1,148.40 | $2,296.80 |
| Tier 2 | $137,001 to $171,000 | $274,001 to $342,000 | $405.80 ($202.90) | $37.50 | $2,884.80 | $5,769.60 |
| Tier 3 | $171,001 to $205,000 | $342,001 to $410,000 | $527.50 ($324.60) | $60.40 | $4,620.00 | $9,240.00 |
| Tier 4 | $205,001 to $499,999 | $410,001 to $749,999 | $649.20 ($446.30) | $83.30 | $6,355.20 | $12,710.40 |
| Tier 5 | $500,000 or more | $750,000 or more | $689.90 ($487.00) | $91.00 | $6,936.00 | $13,872.00 |
Table 1: 2026 IRMAA brackets and surcharges, based on 2024 MAGI. Part B shows the total monthly premium with the surcharge in parentheses. Annual figures are the surcharge only, paid on top of the $202.90 standard Part B premium and your Part D plan premium. Thresholds differ for married couples filing separately.
Each tier works like a cliff rather than a gradual phase-in. A couple with MAGI of $218,000 pays no surcharge. At $218,001, they pay $2,296.80 more for the year. At the top tier, $750,000 or more of joint MAGI, the surcharge reaches $13,872 per couple3.
What Triggers a Surprise Surcharge
The retirees who get caught off guard usually are not high earners every year. They have one year that spikes. The most common causes are:
- Roth conversions. Every converted dollar counts as income in the year of conversion. A large conversion done without checking the thresholds is one of the most common IRMAA triggers.
- Selling a business or real estate. A one-time gain can move you into the top tier for a year, even when your ongoing income is modest.
- Large capital gains. Trimming a concentrated stock position, rebalancing, or a fund's year-end distributions can add six figures of income you did not plan on.
- Required minimum distributions (RMDs). RMDs begin at 73 or 75 depending on your birth year4, and the required percentage rises each year. A large pre-tax balance can push you over a threshold on its own.
Keep in mind that Social Security does not treat any of these as life-changing events. If a Roth conversion or a business sale lifts you into a higher tier, Form SSA-44 will not undo it2. The fix has to happen before the income does.
How to Plan Around IRMAA Cliffs
1. Size Roth Conversions to the Threshold
Conversions are still worth doing for many high-net-worth retirees, since they shrink future RMDs and the tax your heirs will owe. The key is sizing. Before converting, project your MAGI for the year, then convert up to just below the next threshold, leaving a cushion for year-end dividends and fund distributions. Crossing a threshold on purpose can make sense when the long-term tax savings outweigh one year of surcharge. Ou Roth conversion guide walks through spreading conversions across several years.
2. Use QCDs to Lower MAGI
Once you reach 70½, you can give up to $111,000 in 2026 directly from your IRA to charity through a QCD5. The gift never enters your adjusted gross income, so it lowers your MAGI dollar for dollar, and once RMDs begin it counts toward your required amount. If you already give to charity, moving those gifts to QCDs is often the simplest way to create room under a threshold.
3. Time Capital Gains Deliberately
Because IRMAA is assessed one year at a time, the timing of a large gain matters. Spreading gains across several years can keep each year below a threshold. In other cases, concentrating them into one year works better, since a single spike triggers only one year of surcharge. An installment sale can spread a business or property gain over the years you choose, and harvesting losses elsewhere in your portfolio can offset gains in the year they land.
4. File Form SSA-44 After a Life-Changing Event
If your income drops because of a qualifying event, you do not have to wait two years for your premiums to catch up. Form SSA-44 asks Social Security to use a more recent year's income instead. The eight qualifying events are marriage, divorce or annulment, the death of a spouse, work stoppage, work reduction, loss of income-producing property, loss of pension income, and an employer settlement payment2.
Retirement is the most common trigger. If you stopped working in 2025, your 2026 premiums are still based on your 2024 salary, and filing SSA-44 with an estimate of your lower income can remove the surcharge. You will need documentation, such as a letter from your employer confirming your last day of work.
Worked Example: Fitting a Roth Conversion Under the Cliff
Here is how these moves combine for a couple with a pension, Social Security, IRA income, and a charitable habit. All figures use 2026 thresholds and surcharges.
A Hypothetical Married Couple, Both 71, Filing Jointly
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Two caveats apply. The 2028 thresholds will be adjusted for inflation, so planning against today's figures builds in a small margin. And in practice we would target a few thousand dollars below $274,000 rather than the exact line, since an unexpected December fund distribution could push the couple into the next tier.
Treating IRMAA as Part of Your Tax Plan
IRMAA is a cost you can plan around, but only if you know your MAGI before the year ends. That means projecting income forward, knowing where each threshold sits, and deciding conversion amounts, QCDs, and gain timing together rather than one at a time. For more on how IRMAA fits alongside RMDs, asset location, and withdrawal sequencing, see our guide on how to reduce taxes in retirement.
At Journey Advisory Group, we are fee-based fiduciaries serving $1 million-plus households across Greater Cincinnati and Northern Kentucky. Led by Eric Pettway, CFA, our team builds multi-year income projections that account for IRMAA thresholds and coordinates with your CPA on execution.
Schedule a Consultation with Journey Advisory Group
To learn how IRMAA planning fits into your retirement income strategy, contact us at info@JourneyAdvisory.Group or call 800-749-7143. You can also visit JourneyAdvisory.Group to schedule a consultation with our team.
Disclosure
This material prepared by Journey Advisory Group, LLC is for informational purposes only. It is not intended to serve as a substitute for personalized investment, tax, or legal advice, or as a recommendation or solicitation of any particular security, strategy, or investment product. Facts presented have been obtained from sources believed to be reliable. Journey Advisory Group, however, cannot guarantee the accuracy or completeness of such information, and certain information may have been condensed or summarized from its original source.
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Journey Advisory Group is a fee-based advisory firm and SEC-registered Registered Investment Adviser (RIA). Additional information about Journey Advisory Group's services, fees, and potential conflicts of interest is available in Form ADV Parts 2A and 2B, which can be obtained through the SEC's Investment Adviser Public Disclosure website at adviserinfo.sec.gov or by contacting the firm directly.
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References
- Medicare.gov. "Medicare Costs 2026." https://www.medicare.gov/publications/11579-medicare-costs.pdf
- Social Security Administration. "Form SSA-44: Medicare Income-Related Monthly Adjustment Amount, Life-Changing Event." https://www.ssa.gov/forms/ssa-44.pdf
- Centers for Medicare & Medicaid Services. "2026 Medicare Parts A & B Premiums and Deductibles." https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles
- Internal Revenue Service. "Retirement Plan and IRA Required Minimum Distributions FAQs." https://www.irs.gov/retirement-plans/retirement-plan-and-ira-required-minimum-distributions-faqs
- Capital Group. "Qualified Charitable Distributions." https://www.capitalgroup.com/advisor/account-resource-center/qualified-charitable-distributions.html