If you’re 65 or older and on Medicare, you may already know how confusing the system can feel. Between premiums, deductibles, and the alphabet soup of Medicare parts, the last thing most retirees expect is an additional charge based on income. But that’s exactly what IRMAA is — and the 2026 numbers are now out.

In this blog post, we break down what IRMAA means for your Medicare costs, why Social Security looks at your income from two years ago, and what steps you can take if you receive that unexpected “love letter” telling you your premiums are increasing.

What Is IRMAA?

IRMAA stands for Income Related Monthly Adjustment Amount. It’s an extra charge added to your Medicare Part B and Part D premiums if your income is above certain thresholds. Think of it as a surtax on higher-income retirees.

But here’s the tricky part:
Medicare uses your income from two years ago to determine whether you owe IRMAA.
So, your 2024 tax return will be used to set your IRMAA and Medicare premiums for 2026.

This catches a lot of new Medicare beneficiaries off guard—especially those who made decisions at age 63 or 64 without realizing those choices could affect their Medicare costs later.

Understanding MAGI: The Number That Matters

To figure out whether you owe IRMAA, Social Security looks at your MAGI—your Modified Adjusted Gross Income.

MAGI is your AGI (from your tax return) plus tax-exempt interest, like that from municipal bonds. Even if you itemize deductions or give heavily to charity, those deductions do not lower your AGI in the IRMAA calculation.

That means even ordinary financial moves—selling property, converting to a Roth IRA, or withdrawing from a retirement account—can push you into a higher IRMAA bracket.

IRMAA Brackets Are a Cliff, Not a Slope

One of the biggest surprises is that IRMAA works on a cliff system.
If you go even one dollar over a bracket, you move up to the next IRMAA level.

For example, a single filer with $109,001 of MAGI in 2024 will pay more in 2026 Medicare premiums than someone at exactly $109,000 — even though the difference in income was only $1.

For married couples, these thresholds are roughly double, and the IRMAA cost applies to each spouse.

Can You Appeal IRMAA?

Yes — but only if you’ve had a qualifying life-changing event, such as:

• Retirement (work stoppage)
• Reduction in work hours
• Marriage or divorce
• Death of a spouse
• Loss of income-producing property due to disaster

Appeals are not granted just because you did a Roth conversion or had a one-time capital gain. The appeal only asks Social Security to use a more recent tax year when your income has legitimately dropped.

Good news: You can now file the appeal online through SSA.gov using form SSA-44, and upload your documentation directly. This is much easier than the old process of mailing or faxing forms.

Looking Long-Term: Planning Around IRMAA

IRMAA should not be the only driver of your financial plan — but it shouldn’t be ignored either. Here are a few long-term planning points to consider:

1. Think Ahead About RMDs

If you have a large IRA or 401(k), the required minimum distributions that start at age 73 (or 75 for younger retirees) may push your income higher and create permanent IRMAA costs later.

Sometimes it makes sense to accept a little IRMAA now to avoid much larger IRMAA in the future.

2. Spread Roth Conversions Over Multiple Years

A balanced Roth conversion strategy can help reduce future RMDs, even if it temporarily increases IRMAA for one year.

3. Use Tax-Free or Partially Tax-Free Income Sources

Money from Roth accounts, life insurance cash values, or brokerage accounts can help manage your taxable income in Medicare years.

4. Plan Before Age 65

If you’re still in your early 60s, this is the ideal time to prepare. You can choose when to recognize income so that once you reach Medicare age, you’re in a better position to stay under certain IRMAA thresholds.

Final Thoughts

IRMAA is essentially an income-based surcharge on Medicare, but with careful planning, it doesn’t have to be a surprise. Understanding how the brackets work — and how your two-year-old tax return affects your costs today — can help you prepare, appeal when appropriate, and make smart financial decisions for the long run.

If you’ve received an IRMAA notice or want help planning ahead, our team at Cardinal Advisors is here to guide you through it.