IRMAA in 2026: The Medicare Surcharge Cliffs and How to Plan Around Them

Key takeaways

IRMAA is based on your modified AGI from two years earlier; 2026 premiums use 2024 income.
The thresholds are cliffs, not slopes: $109,000 single and $218,000 joint start the first tier in 2026.
Roth conversions, capital gains, and IRA withdrawals in your early sixties set premiums in your mid-sixties.
A life-changing event such as retirement lets you appeal with Form SSA-44 and use current income instead.

Most retirees learn about IRMAA from a letter. It shows up from Social Security a few months after a good year, explains that Medicare premiums are going to be higher than expected, and cites an income figure from two years ago that nobody was thinking about at the time. The income-related monthly adjustment amount is one of the most avoidable costs in retirement. Avoiding it means knowing where the lines are before you cross them.

What IRMAA is

Medicare Part B and Part D premiums are the same for everyone up to a certain income. Above that, the government adds a surcharge that climbs in tiers. The surcharge is set by your modified adjusted gross income (AGI plus tax-exempt interest) from your tax return two years back. So your 2026 premiums are set by your 2024 return.

The standard Part B premium in 2026 is $202.90 a month. The 2026 tiers:

2024 MAGI, single	2024 MAGI, married filing jointly	Part B premium per person	Part D surcharge per person
Up to $109,000	Up to $218,000	$202.90	$0
$109,001 to $137,000	$218,001 to $274,000	$284.10	$14.50
$137,001 to $171,000	$274,001 to $342,000	$405.80	$37.50
$171,001 to $205,000	$342,001 to $410,000	$527.50	$60.40
$205,001 to $499,999	$410,001 to $749,999	$649.20	$83.30
$500,000 and above	$750,000 and above	$689.90	$91.00

Two things jump out. First, the tiers are cliffs. A couple with $218,000 of MAGI pays the standard premium; a couple with $218,001 pays $81.20 more per person per month for Part B and $14.50 for Part D, roughly $2,300 for the year on one extra dollar. Second, the surcharge is per person, so a couple's exposure is double the table.

Why it catches people

IRMAA catches people for three reasons, and none of them is bad luck.

The two-year lag. The income that sets your premium at 65 was earned at 63, often while you were still working or in the first flush of retirement decisions. Almost nobody is thinking about Medicare premiums at 63.

One-time income counts. A large Roth conversion, the sale of a rental, a business sale, a big capital gain from unwinding a concentrated position, a required distribution from an inherited IRA: all of it lands in MAGI for the year and sets the premium two years later.

The thresholds aren't widely known and they're indexed unevenly. The lowest five tiers move with inflation. The top tier has been frozen at $500,000 and $750,000 since it was created and stays there until 2028.

The moves that keep you under the line

IRMAA planning is a subset of tax planning, and it uses the same tools.

Treat the thresholds as bracket edges. From 63 onward, we add the IRMAA tiers to the client's bracket map and plan income to land just under the nearest line rather than just over it. The difference between $217,000 and $219,000 of MAGI isn't $2,000 of income. It's $2,000 of income plus $2,300 of premium.

Front-load conversions before 63. The best years for large Roth conversions are the ones that will never show up on a Medicare determination. For someone retiring at 60, the conversion window before 63 is worth more than the same window after, because it's IRMAA-free. After 63, conversions are still often worth doing, but they get sized to a tier.

Use qualified charitable distributions. After 70½, giving straight from an IRA to charity satisfies required distributions without the amount ever touching MAGI. For charitably inclined retirees, QCDs are the single most effective IRMAA tool there is, up to the annual limit ($111,000 per person in 2026, indexed). See our guide to qualified charitable distributions.

Pick the account for big expenses. A new roof, a wedding, or a car paid from a Roth IRA doesn't touch MAGI. Paid from a traditional IRA, it does. Keeping a Roth balance around for lumpy expenses is IRMAA planning at its simplest.

Harvest gains in the right years. A large realized gain in a taxable account belongs in a year when it won't tip a tier, and ideally in a year before 63. Tax-loss harvesting during a downturn can offset gains that would otherwise push MAGI over a line.

Watch tax-exempt interest. Municipal bond interest gets added back for IRMAA even though it isn't taxed. Retirees who hold munis to cut taxes sometimes find out they raised their Medicare premium instead. Nobody enjoys that letter.

When you can appeal

If your income dropped because of a life-changing event, you can ask Social Security to use your current-year income instead of the two-year-old figure. The qualifying events are marriage, divorce, death of a spouse, stopping or reducing work, loss of income-producing property, loss of a pension, and an employer settlement payment. Retirement is the common one.

The appeal is Form SSA-44, filed with documentation of the event and an estimate of the new income. It works well for someone whose premium was set by their last working year. It doesn't work for a one-time Roth conversion or a capital gain, because a large voluntary transaction isn't a life-changing event. Plan those. Appeal the rest.

What the surcharge is not

IRMAA is a premium, not a tax, and in most cases it isn't deductible. It also isn't permanent. Each year's determination stands alone, so one bad year costs one year of surcharge, and a lower income the following year brings the premium back down two years after that. That matters when a large conversion is on the table: the surcharge is a one-year cost that can be weighed against a lifetime of tax-free growth. Sometimes the conversion wins even with the surcharge. We just want the cost on the page when the choice gets made.

Frequently asked questions

Does IRMAA apply to Medicare Advantage plans?

Yes. The Part B surcharge goes to Medicare whether you have Original Medicare or an Advantage plan, and the Part D surcharge applies to any plan with drug coverage, including Advantage plans that bundle it in.

Is the surcharge based on taxable income or AGI?

Modified adjusted gross income: AGI plus tax-exempt interest. Deductions below the AGI line, including the standard deduction, don't help. Contributions to a traditional IRA or HSA and qualified charitable distributions do, because they reduce AGI or keep income out of it entirely.

What if my spouse and I file separately?

Married filing separately has its own, much harsher IRMAA table, and the first surcharge tier starts at $109,000. Filing separately to dodge IRMAA almost never works.

How far ahead should I plan for it?

Two years before Medicare at a minimum, so from 63. For people with large traditional IRAs, the planning starts earlier, because shrinking the IRA through conversions in the years before 63 is what keeps required distributions from pushing MAGI over the lines every year after 73.

Joseph G. Valerio, CFP®, EAFounder and Lead Advisor at Valerio Wealth Management, a fee-only, fiduciary virtual family office in Miami, Florida. One advisor, credentialed in both financial planning and federal tax. About Joseph

This article is general education, not individualized advice, and it is not tax, legal, or accounting advice. Figures reflect federal law for the year stated and can change. Valerio Wealth Management does not prepare or file tax returns. Speak with a qualified professional about your own situation before acting.