How Do You Avoid IRMAA in Retirement?

Quick Answer 

You avoid IRMAA by managing your modified adjusted gross income (MAGI) to stay below specific Medicare income thresholds each year. For 2026, IRMAA begins at $109,000 of MAGI for single filers and $218,000 for joint filers, per the Centers for Medicare and Medicaid Services. The most effective strategies are timing Roth conversions to stay below an IRMAA tier, using qualified charitable distributions from your IRA after age 70 and a half, avoiding income spikes from capital gains in years near a threshold, and filing Form SSA-44 after a qualifying life-changing event. 

Key Takeaways 

– Standard 2026 Medicare Part B premium is $202.90 per month. With IRMAA at the top tier, the total reaches $689.90 per month. 

– IRMAA uses a two-year lookback. Your 2026 IRMAA is based on your 2024 tax return. – IRMAA is a cliff. One dollar over a threshold triggers the full surcharge for the year. – Each spouse on Medicare pays IRMAA separately. A couple in the top tier can pay over $10,000 per year in surcharges. 

– Tax-free municipal bond interest still counts toward MAGI for IRMAA purposes. 

What is IRMAA? 

IRMAA stands for Income-Related Monthly Adjustment Amount. It is a surcharge on Medicare Part B and Part D premiums for higher-income beneficiaries. The Social Security Administration administers IRMAA based on income data from the IRS. 

The surcharge applies to all Medicare beneficiaries above the income thresholds, including those on Medicare Advantage plans. 

What are the IRMAA brackets for 2026? 

The Centers for Medicare and Medicaid Services publishes the 2026 thresholds:

The first four brackets adjust for inflation. The fifth bracket (above $500,000 single or $750,000 joint) is frozen until 2028. 

What income counts toward MAGI for IRMAA? 

Modified adjusted gross income for IRMAA purposes includes: 

– Wages and self-employment income 

– Pension and annuity income 

– Traditional IRA and 401(k) distributions, including required minimum distributions – Roth conversions (the converted amount counts as income) 

– Capital gains and dividends 

– Interest income, including tax-exempt municipal bond interest 

– Taxable portion of Social Security benefits 

Tax-free municipal bond interest is the one that surprises retirees most. It does not count for regular federal tax but it does count for IRMAA. 

How do you avoid IRMAA on Roth conversions? 

Model the conversion against the IRMAA threshold two years out. If a $200,000 conversion in 2026 pushes the household from $200,000 of MAGI to $400,000 of MAGI, the resulting 2028 IRMAA jump may exceed the long-term tax savings. 

The strategy is to convert enough to fill bracket space without crossing the next IRMAA tier. See Link For Blog 3 for the full conversion framework. 

Can a one-time event like selling a house trigger IRMAA? 

Yes. A large capital gain in any year can push MAGI above an IRMAA threshold and trigger surcharges two years later. The primary residence exclusion ($250,000 single, $500,000 joint) helps, but gains above the exclusion count toward MAGI.

For retirees planning to sell a property with significant gain, coordinating the sale timing with other income decisions can prevent stacking gains in a single high-income year. 

How do qualified charitable distributions reduce IRMAA? 

A qualified charitable distribution (QCD) sends money directly from an IRA to a qualified charity. For 2026, the IRS allows up to $111,000 per person per year via QCD, up from $108,000 in 2025. 

The QCD satisfies part or all of the required minimum distribution without counting toward MAGI. For charitable retirees over age 70 and a half, this is one of the most powerful tools for managing both RMDs and IRMAA simultaneously. 

Can you appeal IRMAA? 

Yes. The Social Security Administration accepts IRMAA appeals when a qualifying life-changing event causes income to drop significantly. Qualifying events include: 

– Retirement or work reduction 

– Death of a spouse 

– Marriage or divorce 

– Loss of pension or income-producing property 

– Settlement from an employer 

The appeal is filed on Form SSA-44 with documentation. Appeals for legitimate life-changing events are routinely approved. 

How does IRMAA affect a surviving spouse? 

The IRMAA single filer threshold ($109,000 for 2026) is exactly half of the joint threshold ($218,000). A surviving spouse with similar income but filing single often crosses IRMAA tiers immediately after the death of a spouse. See Link For Blog 7 for the full discussion on surviving spouse tax planning. 

Common Mistakes 

1. Doing a Roth conversion without modeling the IRMAA impact two years out 2. Stacking capital gains in a year already near an IRMAA threshold 
2. Forgetting that municipal bond interest counts toward MAGI 
3. Not filing Form SSA-44 after a qualifying life-changing event 
4. Treating IRMAA as a one-year problem instead of recurring for as long as MAGI stays above the threshold