Avoid the IRMAA Medicare Surcharge Trap: How $1 Can Raise Medicare Costs

Here’s a question most people don’t know to ask until it’s too late: “Why did my Medicare premiums suddenly go up hundreds of dollars?” You didn’t change your plan, you didn’t make a mistake—yet your bill jumped. The culprit might be a little-known rule called IRMAA—the Income-Related Monthly Adjustment Amount—and it’s one of Medicare’s most frustrating surprises. Let’s break down what it is, how it’s triggered, and what you can do to appeal it.

• IRMAA is an income-based surcharge added to your Part B and Part D premiums.

• It’s based on your income from two years ago, not this year’s—so 2024 income affects 2026 premiums.

• Go $1 over the income threshold, and your premiums can jump hundreds per month—no warning.

• You can appeal IRMAA if your income dropped due to a qualifying life event like retirement, loss of income, or the death of a spouse.

• Plan ahead. Financial moves like Roth conversions, stock sales, or RMDs can all trigger IRMAA later.

IRMAA stands for Income-Related Monthly Adjustment Amount—a government “means test” that says if you earned more, you should pay more for Medicare. It’s not technically a fine or penalty—but it feels like one when a single tax-year decision comes back to bite you two years later.

Your 2024 tax return determines your 2026 Medicare premiums. So if you sold a property, converted an IRA, or took extra distributions this year, that could cause a surprise bill in the future.

Matt tip: IRMAA doesn’t care about your lifestyle—it only sees your Modified Adjusted Gross Income (MAGI) from your tax return.

IRMAA isn’t a gradual scale—it’s a cliff.

• Go one dollar over the threshold, and your Part B and D premiums jump to the next level.

• For a married couple, that can mean nearly $200 more per month, or $2,000+ a year.
  And that’s only the first tier—there are five levels, with the top tier costing some retirees over $1,800 a month in total Medicare premiums.

Matt tip: If you’re close to an income threshold, work with a tax or financial pro before year-end. Sometimes even small moves—like deferring income or splitting a withdrawal—can save you thousands later.

For 2026, Medicare’s base Part B premium is expected to land around $226–$227/month, but the IRMAA thresholds haven’t kept pace with inflation.
That means more middle-income retirees will get hit—not because they’re wealthy, but because their income ticked up slightly from required distributions or modest investment gains.

Common triggers include:

• RMDs (Required Minimum Distributions) kicking in for the first time

• Roth conversions or capital gains

• Social Security COLA increases not keeping up with inflation

Matt tip: IRMAA often hits people who did everything right—saved, invested, planned—but forgot how that success shows up as income later.

If you’ve already been hit with an IRMAA notice, don’t panic—there are legitimate ways to push back. The government bases IRMAA on your past income, not your current reality, which means many retirees end up overpaying after big life changes. The good news? You can appeal it, and if you qualify, get your premiums reduced or even refunded. Here’s how to start.

If your income dropped because of a life-changing event, the Social Security Administration may lower or remove your IRMAA.
Qualifying events include:

• Retirement or job loss

• Marriage or divorce

• Death of a spouse

• Loss of a pension or income-producing property

• One-time income events that won’t repeat

Use Form SSA-44 (found on SSA.gov) and include proof—like a retirement letter or 1099 showing reduced income. If approved, they’ll recalculate your premiums and refund any overpayment.

Matt tip: Don’t wait. The appeal window starts the day your IRMAA notice arrives. Miss it, and you’re stuck paying the higher rate all year.

There are professionals who specialize in IRMAA planning and appeals—especially for retirees with multiple income sources. If you’d rather not handle the paperwork or want to prevent IRMAA before it happens, that can be worth it.

Planning ahead—like spacing out Roth conversions or monitoring MAGI before year-end—can save thousands in future Medicare costs.

1. Check your latest tax return (MAGI line) and compare it to IRMAA thresholds for your filing status.
2. Before December 31, consider how withdrawals, conversions, or asset sales could affect your income.
3. If you already got an IRMAA notice, download Form SSA-44 and start your appeal right away.
4. Need help? Get an unbiased review of your income and Medicare costs to avoid surprises in 2026 and beyond.