IRMAA and MAGI Planning

What’s the most expensive number on your tax return that you never think about? For a Medicare-age retiree, it might be your modified adjusted gross income, because two years from now it sets what you pay for healthcare.

That’s IRMAA. The Income-Related Monthly Adjustment Amount is a surcharge Medicare adds to your Part B and Part D premiums once your income clears a threshold. Most people never plan for it because it arrives on a two-year delay, by which point the income that caused it is ancient history.

How the surcharge actually works

Start with the base. For 2026 the standard Part B premium is $202.90 a month. That’s what you pay if your income sits under the first threshold. Above it, IRMAA stacks on, and it climbs in steps, not a smooth curve.

Here are the 2026 Part B tiers, priced off your 2024 MAGI:

MAGI single	MAGI married filing jointly	Total Part B premium
≤ $109,000	≤ $218,000	$202.90
> $109,000 to $137,000	> $218,000 to $274,000	$284.10
> $137,000 to $171,000	> $274,000 to $342,000	$405.80
> $171,000 to $205,000	> $342,000 to $410,000	$527.50
> $205,000 to $500,000	> $410,000 to $750,000	$649.20
≥ $500,000	≥ $750,000	$689.90

Part D carries its own IRMAA on top, from $14.50 a month at the first tier up to $91.00 at the top, added to whatever your drug plan already charges. The full breakdown lives in the IRMAA brackets guide.

The cliff that makes this worth your time

IRMAA is a cliff, not a ramp. Go one dollar over a threshold and the entire surcharge for that tier hits. For a married couple, stepping from the first tier into the second adds about $81 a month each, roughly $1,950 a year for the household, triggered by a single dollar of income.

That’s the planning hook. Most tax decisions cost you a marginal rate on the marginal dollar. IRMAA charges you a flat penalty for crossing a line. So the dollar that pushes you over is worth far more than the dollar before it. Knowing where the lines sit turns into real money.

What counts as MAGI

For IRMAA, MAGI is your adjusted gross income plus any tax-exempt interest. That last part catches people. Municipal bond interest is tax-free for income tax, but it still counts toward the surcharge. So does every RMD, every realized capital gain, every Roth conversion, and the taxable slice of Social Security.

The big lever for affluent retirees is the Roth conversion. Converting in your 60s, before Medicare and before RMDs, shrinks the future tax-deferred balance. But a conversion is income, and a conversion two years before you start Medicare can spike the premium you pay later. The art is filling a bracket without tipping over an IRMAA line. I work through that tension in Roth conversions without triggering IRMAA.

The two-year lookback, used on purpose

The rule that hurts you can also help you. 2026 IRMAA is based on 2024 income. That delay is a planning window if you see it coming.

The years that matter most are the two right before you turn 65, because they set your first Medicare premiums. A business sale, a large gain, or an aggressive conversion in those years follows you onto your premium. Sometimes the move is to pull that income forward into a year that won’t count, or push it back past the lookback.

And if a one-time event already spiked your income, you may have a way out. A life-changing event, retirement itself counts, divorce, a spouse’s death, lets you file Form SSA-44 to ask Social Security to use your current, lower income instead of the two-year-old figure. Most people who qualify never file it.

If your income is large

For households well into the top brackets, the goal shifts from dodging IRMAA to managing it. If your RMDs alone clear the top threshold, no amount of bracket-fiddling drops you under, so the better question is whether the lifetime tax saved by Roth conversions beats a few years of higher premiums. Often it does. A Qualified Charitable Distribution is the cleanest tool here. It satisfies your RMD and never lands in MAGI, which means it lowers the number IRMAA reads. The full planning context is in IRMAA and MAGI’s home on the benefits side.

IRMAA is a tax that announces itself two years early to anyone paying attention. Read the lines, time your income against them, and you turn a surprise premium into a number you chose.