IRMAA: The Medicare Surcharge That Surprises High Earners (and How It Compounds the Dental Gap)
Quick Answer
IRMAA (Income-Related Monthly Adjustment Amount) is a surcharge added to your Medicare Part B and Part D premiums if your income exceeds certain thresholds. In 2026, IRMAA kicks in at $109,000 for individuals and $218,000 for married couples filing jointly. It is a cliff system, not graduated: one dollar over the threshold triggers the full surcharge for that bracket.
5.1 million Medicare beneficiaries currently pay IRMAA, and many are surprised by it because it is based on income from two years prior. A Roth conversion you did in 2024 can trigger IRMAA in 2026. Combined with Medicare having no dental coverage, higher-income retirees face a double healthcare cost burden that most retirement plans never mention.
Key Takeaways
- 1 5.1 million Medicare beneficiaries pay IRMAA surcharges on top of their standard Part B and Part D premiums 1.
- 2 In 2026, IRMAA kicks in at $109,000 for individuals and $218,000 for married couples filing jointly. One dollar over the threshold triggers the full surcharge for that bracket 1.
- 3 Roth conversions, property sales, and Required Minimum Distributions can all push your income over the IRMAA cliff, often two years after the event 2.
- 4 IRMAA surcharges can add $1,000 to $5,000+ per year to your Medicare costs. Combined with the dental coverage gap, higher earners face a double hit on healthcare expenses.
- 5 IRMAA is based on your Modified Adjusted Gross Income from two years prior. Planning your income during the decumulation phase is critical to managing these surcharges.
Why This Matters
- 5.1 million people currently pay IRMAA surcharges, and many had no idea it was coming until they received the notice from Social Security 1. This is one of the most common surprises in the first years of Medicare.
- IRMAA uses a cliff system, not a gradual increase. If your income is $109,001 as an individual, you pay the same surcharge as someone making $136,000. This cliff effect punishes retirees who do not precisely manage their income during the decumulation phase 1.
- Income events from two years ago determine your current IRMAA bracket. Selling a property in 2024, doing a large Roth conversion, or taking a bigger RMD can all trigger higher Medicare premiums in 2026 2.
- Retirees who earn enough to trigger IRMAA are often the ones most affected by the dental coverage gap. They earn too much for low-income dental programs but not enough to absorb $3,000 to $6,000 dental bills without noticing.
Key Facts
- Standard Medicare Part B premium in 2026 is $202.90 per month. IRMAA surcharges range from $81.00 to $442.80 per month on top of this 1.
- IRMAA applies to both Part B (medical) and Part D (prescription drugs). The combined surcharge can exceed $500 per month at the highest income levels 1.
- The income thresholds for IRMAA are based on Modified Adjusted Gross Income (MAGI) from two years prior. Your 2024 tax return determines your 2026 IRMAA 2.
- You can appeal IRMAA if you had a life-changing event (retirement, divorce, death of spouse, work reduction) that reduced your income. This is called a Life-Changing Event form (SSA-44) 3.
- Roth conversions increase your MAGI in the year of conversion, potentially triggering IRMAA two years later. Strategic timing of conversions during low-income years can avoid this 2.
- The IRMAA thresholds are not indexed to inflation annually like tax brackets. Congress periodically adjusts them, but they can stay flat for years while your income rises with inflation 1.
2026 IRMAA Brackets: Part B Monthly Surcharges
| Individual MAGI | Married Filing Jointly MAGI | Standard Premium | IRMAA Surcharge | Total Monthly Part B Cost |
|---|---|---|---|---|
| $109,000 or less | $218,000 or less | $202.90 | $0 | $202.90 |
| $109,001 to $136,000 | $218,001 to $272,000 | $202.90 | $81.00 | $283.90 |
| $136,001 to $170,000 | $272,001 to $340,000 | $202.90 | $202.40 | $405.30 |
| $170,001 to $213,000 | $340,001 to $426,000 | $202.90 | $323.90 | $526.80 |
| $213,001 to $500,000 | $426,001 to $750,000 | $202.90 | $445.30 | $648.20 |
| Above $500,000 | Above $750,000 | $202.90 | $478.00 | $680.90 |
Source: CMS 2026 Medicare premiums. IRMAA applies to both Part B and Part D. One dollar over a threshold triggers the full surcharge for that bracket.
How Income Events Trigger IRMAA (Retirement Wellness Gaps)
| Income Event | When It Hits IRMAA | Typical Amount | What Generic Advice Misses |
|---|---|---|---|
| Roth conversion | 2 years after conversion | $50,000 to $200,000+ | You may save on future taxes but pay $1,000 to $5,000+ in IRMAA surcharges |
| Selling a property | 2 years after sale | Varies widely | Capital gains count toward MAGI even if you reinvest |
| Required Minimum Distribution | Year of distribution + 2 | Grows as account balance grows | RMDs increase each year and can push you into higher IRMAA brackets over time |
| Part-time work or consulting | 2 years after earning | $20,000 to $100,000+ | Extra income in early retirement can trigger IRMAA you did not expect |
| Pension lump sum | 2 years after payout | $100,000+ | One-time events cause one-time IRMAA spikes most people can appeal |
IRMAA looks at income from 2 years ago. Planning your income during the decumulation phase is essential to managing surcharges.
Step by Step: What to Do
Step 1: Know Your IRMAA Threshold
- Check your current Modified Adjusted Gross Income on your most recent tax return (Form 1040, line 11, plus any tax-exempt interest).
- Compare it to the 2026 IRMAA brackets above. Remember: thresholds use income from 2 years prior.
- If you are close to a threshold, even $1 over triggers the full surcharge for that bracket. This is where precise income planning matters most.
Step 2: Plan Your Roth Conversions Strategically
- Roth conversions during low-income years (between retirement and age 73 when RMDs start) can save significant taxes long-term.
- But each conversion adds to your MAGI and can trigger IRMAA two years later. Calculate the IRMAA cost before converting.
- Consider spreading large conversions over multiple years to stay below IRMAA thresholds in each year.
Step 3: File an Appeal If Your Income Dropped
- If you retired, lost a spouse, divorced, or had a significant income reduction, you can file SSA-44 (Life-Changing Event) to use current-year income instead of 2-year-old income 3.
- Qualifying events include: retirement or work reduction, marriage, divorce, death of spouse, loss of income-producing property, and loss of pension.
- Call Social Security at 1-800-772-1213 or visit your local office with documentation.
Step 4: Account for the Combined Healthcare Cost
- Add up: Medicare Part B premium + IRMAA surcharge + Part D premium + Part D IRMAA + Medigap or Advantage premium + dental costs (no Medicare coverage) + vision costs.
- For a retiree in the second IRMAA bracket, total annual healthcare costs can easily exceed $10,000 to $15,000 before any medical care is received.
- Build these costs into your retirement spending plan. The decumulation phase requires budgeting for expenses your paycheck used to cover.
Real-World Example
From Grace
Here is what most people do not understand about IRMAA until it costs them thousands.
- IRMAA is not punishment for being successful. It is a predictable system that rewards precise income planning. The retirees who avoid IRMAA surprises are the ones who plan their income two years ahead.
- If your income dropped because you retired, file the appeal. Many people pay IRMAA surcharges they do not owe because they do not know about the Life-Changing Event form.
- I can help you think through how Roth conversions, RMDs, and other income events interact with IRMAA. This is exactly the kind of multi-year, multi-variable planning where conversational AI adds real value.
Grace is an AI educational tool, not a licensed financial advisor. This content is for informational purposes only and does not constitute financial, tax, or legal advice. Always consult a qualified professional for decisions specific to your situation.
Frequently Asked Questions
What is IRMAA and who has to pay it? +
IRMAA stands for Income-Related Monthly Adjustment Amount. It is an additional charge on top of the standard Medicare Part B and Part D premiums for beneficiaries with higher incomes. In 2026, IRMAA applies to individuals with Modified Adjusted Gross Income above $109,000 and married couples filing jointly above $218,000. About 5.1 million Medicare beneficiaries currently pay IRMAA.
How does IRMAA use income from two years ago? +
Social Security determines your IRMAA bracket using your Modified Adjusted Gross Income (MAGI) from your tax return filed two years prior. For 2026, they look at your 2024 tax return. This means a Roth conversion, property sale, or large RMD in 2024 will affect your Medicare premiums in 2026. Planning your income during the decumulation phase requires thinking two years ahead.
Can I appeal my IRMAA surcharge? +
Yes. If you experienced a life-changing event that reduced your income (retirement, work reduction, marriage, divorce, death of spouse, loss of income-producing property, or loss of pension), you can file Form SSA-44 to request that Social Security use your current-year income instead. This must be done each year the surcharge applies. Many retirees in their first year of Medicare successfully appeal because their retirement reduced their income below the threshold.
Do Roth conversions trigger IRMAA? +
Yes. Roth conversions add to your Modified Adjusted Gross Income in the year of conversion. A $100,000 Roth conversion in 2024 would increase your 2024 MAGI by $100,000, potentially triggering IRMAA surcharges in 2026. The long-term tax savings from Roth conversions may still outweigh the IRMAA cost, but you need to calculate both sides. Consider spreading conversions over multiple years to stay below IRMAA thresholds.
How does IRMAA interact with the Medicare dental gap? +
IRMAA and the dental gap create a compounding cost burden for higher-income retirees. You are already paying more for Medicare through IRMAA surcharges, and then you discover Medicare covers no dental. A retiree in the second IRMAA bracket paying an extra $1,944 per year in Part B surcharges who also needs a dental implant ($3,000 to $6,000) faces nearly $5,000 to $8,000 in unexpected healthcare costs. Most retirement plans account for neither.
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Sources
- [1] Centers for Medicare & Medicaid Services, 2026 Medicare Parts B and D IRMAA Tables (accessed March 11, 2026)
- [2] Kiplinger, IRMAA and Roth Conversion Planning (accessed March 11, 2026)
- [3] Social Security Administration, Medicare Premium Appeals: Life-Changing Events (accessed March 11, 2026)
- [4] Internal Revenue Service, IRMAA Income Thresholds and Adjustment (accessed March 11, 2026)
Educational content only. This is not financial, tax, or legal advice. Consult a qualified professional for guidance specific to your situation.