Medicare IRMAA in 2026: What Higher-Income Retirees Pay for Part B & Part D

If you've worked hard, saved diligently, and built a comfortable retirement income, Medicare has a surprise that catches many people off guard: a monthly surcharge on your premiums simply because your income is above average. It's called IRMAA — the Income-Related Monthly Adjustment Amount — and in 2026 it can add anywhere from about $95 to more than $575 to what you pay each month for Medicare, once you combine the Part B and Part D pieces.

Here's the short version. IRMAA is an extra charge layered on top of your standard Medicare Part B and Part D premiums. It kicks in for 2026 once the income on your 2024 tax return crosses $109,000 for a single filer or $218,000 for a married couple filing jointly, and it climbs across five tiers from there. The standard Part B premium is $202.90 a month; with IRMAA, the highest earners pay $689.90 a month for Part B alone, plus up to $91.00 a month added to their drug plan. This guide walks through exactly how the surcharge is calculated, the full 2026 bracket tables, how Social Security tells you about it, and — most importantly — what you can do about it.

At TSM Life & Health we believe in educating first and planning second, so treat this as education, not individualized tax or investment advice. IRMAA sits right where Medicare, Social Security, and taxes overlap, and the details matter. TSM is an independent agency and is not connected with or endorsed by the government or the Medicare program. With that said, let's demystify one of retirement's most misunderstood costs.

What IRMAA is (and who actually pays it)

Medicare is not entirely free, even for people who paid into it their whole working lives. Part B (which covers doctor visits, outpatient care, and durable medical equipment) and Part D (prescription drug coverage) both carry monthly premiums. For most people, the government covers roughly 75% of the true cost of Part B and you pay the remaining 25% as your standard premium. IRMAA changes that split for higher earners.

Under the rules, once your income passes certain thresholds, you're asked to cover a larger share of the program's cost — 35%, 50%, 65%, 80%, and finally 85% at the top tier — instead of the standard 25%. That larger share is collected as the IRMAA surcharge. In plain terms: the more you earn, the more of Medicare's real cost you personally pick up. The same idea applies to Part D, where IRMAA adds a flat dollar amount on top of whatever your drug plan charges.

Two features make IRMAA especially worth understanding. First, it applies per person. In a married couple where both spouses are on Medicare, each person pays their own IRMAA surcharge, so a couple in a high tier effectively pays the surcharge twice. Second, IRMAA is recalculated every single year. It is not a permanent label. A surcharge you pay in one year can vanish the next if your income drops back below the threshold — and, conversely, a good investment year can trigger a surcharge two years down the road.

The two-year MAGI lookback: why 2024 income sets your 2026 premium

This is the single most confusing part of IRMAA, so let's slow down. Social Security doesn't know your current-year income — your tax return for this year won't even be filed until next spring. So it uses the most recent return the IRS has on file, which is always two years old. That means your 2026 Medicare premiums are set by the income you reported on your 2024 federal tax return.

The specific figure Social Security uses is your modified adjusted gross income, or MAGI. For IRMAA purposes, MAGI is defined narrowly: it's your adjusted gross income (AGI) — the number near the bottom of the first page of your Form 1040 — plus any tax-exempt interest you earned (for example, from municipal bonds). That's it. There's no long list of add-backs like some other MAGI definitions use.

Even though the formula is simple, the inputs are broad. Your AGI — and therefore your IRMAA — reflects nearly every kind of income you receive in retirement:

• Wages and self-employment income
• The taxable portion of your Social Security benefits
• Pension and annuity payments
• Withdrawals from traditional IRAs, 401(k)s, and other pre-tax retirement accounts
• Required minimum distributions (RMDs)
• Capital gains from selling investments, a home, or a business
• Interest, dividends, and rental income
• Roth conversion amounts (the converted balance is taxable income in the year you convert)

Notice what's on that list: several of these are things you control the timing of. A large Roth conversion, the sale of a rental property, or realizing a big capital gain all inflate the AGI on that year's return — and can push you into an IRMAA bracket two years later. This is why retirees who understand the lookback plan their income years deliberately. It's also why a surprise IRMAA notice often traces back to a single event two years earlier that felt unrelated to Medicare at the time.

The 2026 IRMAA brackets & surcharges

Here are the confirmed 2026 figures. The Centers for Medicare & Medicaid Services (CMS) announced the standard 2026 Part B premium of $202.90 a month (up from $185.00 in 2025) and the Part B annual deductible of $283 in its 2026 Part B Premiums and Deductibles fact sheet. The income thresholds below are indexed for inflation each year and rose roughly 3% for 2026.

The table shows what you'll pay per month in 2026 at each income level, based on your 2024 MAGI. The Part D column is the surcharge added to your drug plan's premium — your plan sets its own base price, and IRMAA is stacked on top.

2026 figures, based on 2024 MAGI. Sources: CMS 2026 Parts B Premiums & Deductibles; Social Security Administration (accessed 2026-07-31). The Part D amount is added to your individual drug plan's premium.

A few things to notice. The standard-premium row (top) is where most beneficiaries land — no surcharge at all. From there, each step up adds a meaningful amount: the jump from the standard premium into the first surcharge tier is about $81 a month for Part B alone. And the tiers are wide at the top — the fifth tier spans everything from $205,001 all the way to $500,000 for a single filer — so two people with very different incomes can pay the same surcharge.

One important note for married couples who file separately: if you're married, lived with your spouse at any point during the year, and file separate returns, IRMAA uses a much stricter, compressed schedule with far lower thresholds — the surcharge can begin right around that same $109,000 mark and jump quickly to the top tiers. If that describes you, confirm your exact figures with Social Security before assuming the standard single-filer brackets apply.

How Social Security notifies you (the initial determination)

You don't apply for IRMAA and you don't calculate it yourself. The process runs automatically in the background: the IRS shares your tax data with the Social Security Administration (SSA), SSA compares your MAGI to the year's thresholds, and if you land in a surcharge tier, it mails you a notice called an initial determination. This usually arrives in the late fall, before the new premium year begins.

The letter spells out three things: the surcharge amount you'll owe for Part B and Part D, the specific tax year and income figure SSA used to calculate it (your 2024 MAGI, for 2026 premiums), and your appeal rights. It's worth reading carefully rather than filing away, because errors do happen — SSA might use an outdated return, or your circumstances may have changed dramatically since 2024.

How you actually pay depends on your situation. If you already receive Social Security benefits, the Part B premium plus its IRMAA surcharge is deducted directly from your monthly benefit check. The Part D surcharge, however, is usually billed separately and paid directly to Medicare — not to your drug plan — even though it's tied to the plan you chose. If you're not yet drawing Social Security, you'll receive a bill for the Part B amount. Because the Part B premium and its surcharge come straight out of your Social Security payment for most people, IRMAA and your Social Security timing are tightly linked, which is one reason we help clients coordinate the two as part of our Social Security planning work.

Life-changing events & how to appeal (Form SSA-44)

Here's the relief valve that too few retirees know about. Because IRMAA is based on income from two years ago, it can badly misrepresent your current situation — especially the year you retire. Someone who earned a high salary in 2024 and then stopped working in 2025 could get hit with a 2026 surcharge based on income they no longer have. Social Security anticipated this, and built in a formal way to ask for a do-over.

The tool is Form SSA-44, titled "Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event." If one of the qualifying events below reduced your income, you can file it to have SSA use a more recent (or estimated future) income figure instead of the two-year-old return. SSA recognizes these life-changing events:

• Marriage
• Divorce or annulment
• Death of a spouse
• You or your spouse stopped working (retirement)
• You or your spouse reduced your work hours
• Loss of income-producing property (for reasons beyond your control, such as a disaster)
• Loss or reduction of a pension
• An employer settlement payment due to the employer's closure or bankruptcy

Retirement is by far the most common trigger, and it's exactly the scenario IRMAA's two-year lag handles poorly. To file, you download Form SSA-44 from SSA.gov, check the life-changing event that applies, estimate your reduced MAGI for the relevant year, and attach supporting proof. Documentation might include a signed statement, a letter from your former employer confirming your retirement date, a marriage or death certificate, a divorce decree, or a copy of a more recent tax return. You then mail or bring it to your local Social Security office, or handle it by phone.

The payoff can be substantial. Successfully removing a top-tier surcharge could save a single retiree several hundred dollars a month across Part B and Part D — real money that stays in your budget. The paperwork is modest relative to the savings, which is why it's worth doing promptly rather than resigning yourself to a full year of higher premiums.

Planning strategies to manage your MAGI

Because IRMAA is driven entirely by your MAGI, the most effective approach is proactive: manage the income you report in a given year so you don't unintentionally trip a threshold two years later. None of the following is tax or investment advice — everyone's situation is different, and these decisions should be made with your tax professional — but these are the levers retirees most commonly discuss.

Time your Roth conversions deliberately

Converting money from a traditional IRA to a Roth IRA is a powerful long-term strategy — Roth withdrawals are tax-free and Roth accounts have no required minimum distributions. But the converted amount counts as ordinary income in the conversion year, which inflates that year's MAGI. The art is in the sizing and timing: many retirees do partial conversions, "filling up" a tax bracket while staying under the next IRMAA threshold, often in the low-income years between retirement and the start of RMDs. Convert too much in one year and you can trigger a surcharge two years out; spread across several years, you may avoid it entirely.

Be strategic about capital gains

Selling appreciated investments, a second home, or a business generates capital gains that flow straight into your AGI. If a large sale would push you over a threshold, options worth discussing with an advisor include spreading the sale across two tax years, harvesting losses to offset gains, or using an installment sale so the income arrives gradually rather than all at once. The goal isn't to avoid selling — it's to avoid bunching so much income into a single year that IRMAA (and a higher tax bill) comes along for the ride.

Use Qualified Charitable Distributions (QCDs)

If you're 70½ or older and charitably inclined, a Qualified Charitable Distribution lets you send money directly from your IRA to a qualified charity. The amount can count toward your required minimum distribution but is excluded from your AGI — meaning it doesn't raise your MAGI the way a normal RMD withdrawal would. For retirees near an IRMAA edge who already give to charity, this is one of the cleaner ways to satisfy an RMD without inflating income.

Draw from the right accounts in the right order

Retirees who hold a mix of account types — taxable brokerage, tax-deferred (traditional IRA/401k), and tax-free (Roth) — have flexibility in which account they tap in a given year. Withdrawals from a Roth or the return of principal from a taxable account don't add to MAGI the way a traditional IRA withdrawal does. Thoughtful "withdrawal sequencing" can keep a year's reported income below a threshold while still delivering the cash flow you need.

Mind tax-exempt interest and account for both spouses

Remember that municipal-bond interest, though tax-exempt for income-tax purposes, is added back for IRMAA. It won't raise your tax bill, but it can still nudge your MAGI upward. And because each spouse pays IRMAA individually, couples should look at household income holistically — a single large distribution can raise premiums for both people.

Common IRMAA mistakes to avoid

A handful of predictable errors trip up otherwise careful retirees. Watch for these:

1. Forgetting the cliff. IRMAA has no gradual phase-in. Cross a threshold by a single dollar and you owe the full surcharge for that whole tier. If you're within a few thousand dollars of a bracket line, the last bit of income you realize can be remarkably expensive.
2. Ignoring the two-year lag when you retire. Your first year or two of Medicare may be priced off your peak earning years. If your income has since dropped, don't just pay it — file Form SSA-44.
3. Assuming a one-time gain locks you in forever. A big capital gain or Roth conversion may cause a surcharge two years later, but it falls off the next year once your income normalizes. IRMAA is recalculated annually.
4. Overlooking tax-exempt interest. Municipal-bond interest is invisible on your tax bill but counts toward MAGI for IRMAA.
5. Never opening the notice. The initial-determination letter has a limited appeal window. Read it promptly and act if anything looks wrong.

IRMAA can feel like a penalty for saving well, but it's really just a cost that responds to planning. Understand the thresholds, respect the two-year lag, and coordinate your income decisions, and you can often keep the surcharge smaller — or avoid it altogether. When it does apply because of a genuine one-time event, it's usually temporary.

Frequently asked questions

Written by

Keith McLiverty

Keith is the founder of TSM Life & Health, with more than 30 years in finance, taxes, medical insurance, and retirement planning. He believes in educating first and planning second, helping Connecticut families make confident, unhurried decisions about Medicare, Social Security, and protecting what they've built. This article is general education, not individualized tax, investment, or insurance advice.

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