IRMAA in 2026: The Medicare Surcharge You Can Plan Around — If You See It Coming

If you've spent your working life building a solid retirement, there's a Medicare surprise waiting for a lot of high-income households — and it arrives quietly, in a letter from the Social Security Administration, usually about a year into retirement. It's called IRMAA, and for a household that crosses one of its income thresholds, it can add thousands of dollars a year to Medicare premiums that most people assume are fixed.

The frustrating part is that IRMAA is one of the more plannable costs in retirement — but only if you see it coming. By the time the surcharge notice arrives, the income that triggered it is already two years in the past. This article is about how IRMAA actually works in 2026, the exact income brackets that trigger it, and — most importantly — the multi-year planning levers that determine whether you pay it at all.

What IRMAA actually is

IRMAA stands for Income-Related Monthly Adjustment Amount. In plain terms, it's a surcharge added on top of your standard Medicare Part B and Part D premiums once your income climbs above certain thresholds. The standard Part B premium, which is set annually, is $202.90 per month in 2026; IRMAA can push that figure substantially higher.

Three features make IRMAA distinct from an ordinary tax, and each one matters for planning:

• It's administered by the Social Security Administration, not the IRS — even though it's based on your tax return. The SSA receives your income data from the IRS and applies the surcharge to your Medicare premiums.
• It runs on a two-year lookback. Your 2026 IRMAA is based on the Modified Adjusted Gross Income (MAGI) reported on your 2024 tax return. This lag is the single most important thing to understand about IRMAA — the income decision that triggers a surcharge happens two years before the bill.
• It applies per person. For a married couple, both spouses on Medicare pay their own IRMAA surcharge. That effectively doubles the household impact at every threshold.

IRMAA affects both Part B (medical) and Part D (prescription drug coverage). Many people are surprised to learn the Part D surcharge exists at all — but it does, and it stacks on top of whatever Part D plan premium you already pay.

The 2026 IRMAA brackets

Here are the 2026 brackets, based on your 2024 MAGI. The surcharge is a flat dollar amount per tier — and critically, these are cliffs, not gradual phase-ins. We'll come back to why that matters.

Single filers (based on 2024 MAGI)

Married filing jointly (based on 2024 MAGI) — amounts are per spouse

Remember that for married couples, each spouse pays the surcharge. A couple sitting in the second tier pays an extra $81.20 per month, per spouse, in Part B alone — about $1,948.80 per year combined — plus the Part D surcharge of $14.50 per month each on top of that. At the highest tier, the combined Part B surcharge alone exceeds $11,600 per year for a couple.

How MAGI is calculated for IRMAA

The income figure that matters for IRMAA is Modified Adjusted Gross Income — and the IRMAA definition of MAGI is specific. It starts with your Adjusted Gross Income (the figure on line 11 of your Form 1040) and adds back any tax-exempt interest — most commonly, municipal bond income. For the large majority of households, that's the whole calculation: MAGI is essentially AGI plus muni interest.

What's easy to miss is everything that flows into AGI in the first place. The following all count toward your IRMAA MAGI:

• Wages and self-employment income
• Distributions from traditional IRAs and 401(k)s, including Required Minimum Distributions
• Roth conversion amounts (the converted balance is taxable income in the conversion year)
• Capital gains, both long- and short-term
• Dividends and interest
• Rental and business income
• The taxable portion of Social Security benefits

And a few important things that do NOT count toward MAGI:

• Qualified distributions from Roth IRAs and Roth 401(k)s
• HSA distributions used for qualified medical expenses
• The return-of-basis portion of certain annuity payments

That contrast — what counts versus what doesn't — is the entire foundation of IRMAA planning. Every lever we discuss below is, at its core, a way to shift income from the “counts” column to the “doesn't count” column, or to control the year it lands in.

The cliff problem

Here is the feature of IRMAA that trips up the most households: the brackets are cliffs, not ramps.

With most of the tax code, crossing a threshold affects only the dollars above the line. Earn one dollar into a higher tax bracket and only that dollar is taxed at the higher rate. IRMAA does not work that way. Cross a bracket by a single dollar and the entire surcharge for that tier applies.

Consider a married couple whose 2024 MAGI lands at exactly $217,999. They're under the first threshold, so they each pay the standard Part B premium — $202.90 per month, or $4,869.60 per year combined.

Now imagine the same couple came in at $218,001 — two dollars higher. They've crossed into the second tier. Each now pays $284.10 per month for Part B, plus a $14.50 monthly Part D surcharge. The combined annual cost jumps to roughly $7,166 — an increase of about $2,297 for the year, triggered by two dollars of additional income.

That's the cliff. And it's why a Roth conversion, a capital gain, or a year-end mutual fund distribution that nudges you $500 over a threshold can be one of the most expensive $500 you ever earn. For households near a bracket edge, year-end income management isn't a rounding exercise — it's worth thousands.

There's a second cliff hiding behind the first. The same income event that crosses an IRMAA threshold often also crosses the threshold for the 3.8% Net Investment Income Tax, which applies once Modified AGI exceeds $250,000 for a married couple filing jointly, or $200,000 for single filers. A large capital gain or a sizable Roth conversion in a single year can trigger both — the NIIT in the year of the event, and the IRMAA surcharge two years later. When we model a liquidity year, we're rarely looking at IRMAA in isolation; we're looking at how one number drives several costs at once.

The planning levers that actually move IRMAA

Because IRMAA is driven by MAGI, and MAGI is something you have meaningful control over across years, IRMAA is far more plannable than most retirees realize. Here are the levers that matter most. None of these is one-size-fits-all — the right combination depends on your full picture — but each is a genuine tool.

Roth conversion timing

Roth conversions are the double-edged sword of IRMAA planning. A conversion adds to MAGI in the year you do it, which can trigger or worsen a surcharge. But conversions done strategically — in lower-income years, or sized to fill a bracket without crossing the next IRMAA cliff — reduce the future RMDs that would otherwise drive MAGI up for decades. The planning question is rarely “convert or not”; it's “how much, in which years, and up to which threshold.” Done well, conversions can lower lifetime IRMAA exposure even as they cause some in the near term. (Our deeper discussion of conversion strategy lives in our article on Roth conversion planning under OBBBA.)

Capital gains timing

Long-term capital gains count toward MAGI, which means the timing of when you realize them is a lever. A household near a bracket edge can sometimes spread a large sale across two tax years, or accelerate gains into a year already above a threshold (since the surcharge is the same whether you're $1 or $50,000 into a tier). Tax-gain and tax-loss harvesting both have a role here.

Qualified Charitable Distributions

For those 70½ and older, a Qualified Charitable Distribution lets you send money directly from an IRA to a charity — satisfying your RMD without the distribution ever counting toward MAGI. In 2026 the QCD limit is $111,000 per individual. For charitably inclined retirees facing IRMAA, this is one of the cleanest moves available: it converts a MAGI-increasing RMD into a MAGI-neutral gift.

Asset location

Where you hold different asset types shapes how much taxable income your portfolio throws off each year. Holding interest-generating assets inside tax-deferred or Roth accounts, rather than taxable brokerage accounts, can reduce the annual MAGI your portfolio generates — which compounds into meaningful IRMAA control over a long retirement.

Tax-loss harvesting

Realized capital losses offset realized gains for MAGI purposes, and up to $3,000 of net losses can offset ordinary income each year, with the remainder carried forward. For a household managing toward a bracket edge, banked losses are a useful counterweight to gains that would otherwise push MAGI over a cliff.

HSA contributions and distributions

Health Savings Accounts are quietly one of the best IRMAA tools available. Contributions reduce AGI (and therefore MAGI) in your working and pre-Medicare years, and qualified distributions never count as income. While you can't contribute to an HSA once enrolled in Medicare, the balance you built beforehand becomes a source of medical spending that doesn't touch MAGI at all.

When you can appeal IRMAA: life-changing events

Here's the lever almost nobody knows about, and it matters enormously for the newly retired. Because IRMAA uses a two-year lookback, your first Medicare year is often based on income from your final, highest-earning working year. That's frequently the worst-case income for IRMAA — and it no longer reflects reality.

The Social Security Administration allows you to request a reduction when certain “life-changing events” mean your current income is meaningfully lower than the lookback year. The recognized events include:

• Death of a spouse
• Marriage, divorce, or annulment
• Work stoppage or reduction (retirement is the most common)
• Loss of income-producing property
• Loss or reduction of pension income
• Receipt of a settlement payment from a former employer

The mechanism is Form SSA-44, titled “Medicare Income-Related Monthly Adjustment Amount — Life-Changing Event.” You file it with the SSA, document the event and your reduced expected income, and request that your IRMAA be recalculated based on the lower figure.

In our experience, a large share of newly retired clients are eligible to file an SSA-44 — and most have never heard of it. If you retired this year and your Medicare premium reflects the income from your last big working year, this form may be the single highest-value piece of paperwork you file all year.

Common misconceptions

“IRMAA only affects Part B.” It affects Part D too. The Part D surcharge is separate, stacks on top of your drug plan's premium, and follows the same income brackets.

“It's based on what I earn now.” It's based on your MAGI from two years ago. The 2026 surcharge reflects 2024 income.

“The brackets work like tax brackets.” They don't. They're cliffs — cross by a dollar and the full tier surcharge applies to your entire premium.

“Medicare Advantage lets me avoid IRMAA.” It doesn't. IRMAA is calculated independently and applies regardless of whether you're on Original Medicare or a Medicare Advantage plan.

“Roth conversions don't affect my Medicare.” They do. The converted amount is taxable income in the conversion year and counts toward the MAGI that drives IRMAA two years later.

Why this hits Texas households especially hard

Texas has no state income tax — which is a genuine advantage, but it changes the IRMAA calculus in a subtle way. In high-tax states, large income events come bundled with state tax planning that often naturally moderates federal MAGI timing. Texas households don't have that built-in friction, so federal income events — a business sale, a large equity event, the onset of RMDs, a big real estate gain — can land at full force in a single year and push MAGI well past an IRMAA threshold.

For the kinds of households we work with across Texas — business owners approaching an exit, executives with concentrated equity, real estate investors with lumpy gains — the years surrounding a liquidity event are exactly when IRMAA planning earns its keep. A sale structured across two tax years, or coordinated with charitable giving and conversion timing, can save far more in surcharges than the planning costs.

The bottom line

IRMAA is not a fixed cost of getting older. It's a planning problem with a two-year head start built in — which means the households that pay the most are usually the ones who never saw it coming, and the households that pay the least are the ones who modeled their MAGI before the income hit the return.

The moves that matter — multi-year Roth conversion strategy, capital gains timing, QCD coordination, and knowing when to file an SSA-44 — all have to happen before the lookback year closes, not after the surcharge letter arrives. That's the difference between IRMAA being an annoyance and IRMAA being an avoidable expense.

This is the kind of coordination we do alongside our clients: projecting MAGI years ahead, mapping it against the IRMAA cliffs, and aligning every income decision — conversions, sales, charitable gifts, withdrawals — with the life you actually want your money to support. (For more on how Social Security claiming decisions interact with all of this, see our articles on when to claim Social Security and claiming strategies for married couples, and on how we approach planning overall in our Statement of Financial Purpose.)

If you're approaching Medicare, or you've had a recent income event that might be inflating your premiums, we'd be glad to model it with you.

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