Medicare IRMAA
IRMAA (Income-Related Monthly Adjustment Amount) is an income-based surcharge added to your Medicare Part B and Part D premiums. Higher-income retirees pay substantially more for the same Medicare coverage — often thousands of dollars per year more than lower-income retirees.
Medicare premiums are means-tested. A retiree with a modified adjusted gross income (MAGI) above a series of thresholds pays progressively higher monthly premiums for Parts B (medical) and D (prescription drug) — on top of the base premium everyone pays. The surcharge is called IRMAA.
IRMAA thresholds for a given year are based on your MAGI from two years prior. That means the Roth conversion you execute in 2026 will affect your 2028 Medicare premium. The brackets are 'cliff' thresholds, not graduated — one dollar over the threshold pushes your entire monthly premium up to the next tier.
For 2024, the first IRMAA threshold (for a married couple filing jointly) is around $206,000 of MAGI — crossing it adds roughly $70/month per spouse to Part B, plus additional Part D surcharges. The top tier adds several hundred dollars per month per spouse.
Strategically, IRMAA introduces important planning considerations. A Roth conversion large enough to push you over a threshold can cost thousands in extra Medicare premiums two years later — so the conversion should be sized to stop just below the cliff. Similarly, a decision to take a large one-time IRA withdrawal, sell a business, or realize substantial capital gains should factor in the IRMAA impact.
If you have a one-time income event (job loss, divorce, sale of a primary residence) that materially changes your income, you can file SSA Form SSA-44 to appeal the IRMAA determination — the Social Security Administration will often reassess based on your current projected income.
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