.png)
A lot of people assume Medicare is pretty straightforward.
You turn 65, enroll, and pay a standard monthly premium.
But then a letter shows up saying your premiums are higher than expected.
That’s usually because of something called IRMAA.
What is IRMAA?
IRMAA stands for Income-Related Monthly Adjustment Amount.
It’s essentially a surcharge added to your Medicare premiums if your income is above certain thresholds.
It applies to:
- Medicare Part B (medical coverage)
- Medicare Part D (prescription drug coverage)
The higher your income, the higher your premiums.
The part most people don’t realize
IRMAA is based on your income from two years ago.
So, your 2026 Medicare premiums are based on your 2024 income.
That timing can catch people off guard.
Especially if:
- You had a large capital gain
- Sold a business or property
- Did a large Roth conversion
Even if your income drops later, the higher premiums can still show up.
Why this matters
IRMAA isn’t just a small bump.
Crossing into a higher bracket can increase your premiums by hundreds of dollars per month per person.
And it works in tiers, so going even $1 over a threshold can trigger a higher level.
Common situations where IRMAA shows up
- The first few years of retirement (income can be uneven)
- Large Roth conversions done all at once
- Big portfolio rebalances with capital gains
- Selling real estate or a business
These aren’t bad decisions, but they can have ripple effects.
Can you avoid it?
Sometimes yes, sometimes no.
The goal isn’t always to avoid IRMAA completely. It’s to be aware of it and plan around it.
That might mean:
- Spreading income across multiple years instead of one
- Being intentional about the size of a Roth conversion
- Timing large gains more carefully
In some cases, paying a higher premium for a year or two might still make sense as part of a bigger strategy.
One important exception
If your income has dropped due to a life-changing event, you may be able to appeal the IRMAA decision.
Examples include:
- Retirement
- Marriage or divorce
- Death of a spouse
This is done through Social Security and can reduce your premiums going forward. (Form SSA-44)
The bottom line
IRMAA is one of those things that feels like a surprise, but usually doesn’t have to be.
With a little planning, you can:
- Avoid unnecessary premium increases
- Or at least understand when they’re worth it
Either way, it’s another example of how taxes and income decisions don’t just affect April. They show up in other parts of your financial life too.
If you have any questions about how IRMAA might impact your situation, feel free to reach out. If you’re within 5 years of Medicare eligibility, this is worth a conversation.
This is for informational purposes only and shouldn’t be considered personalized tax or Medicare advice. IRMAA thresholds and Medicare premiums change over time, and your situation may be different. Be sure to consult with your tax professional or advisor before making decisions.
.jpg)
.jpg)
