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Put simply, an income-related monthly adjustment amount (IRMAA) is an additional charge added to your monthly Medicare Part B and Part D premiums if your income exceeds certain limits. It helps ensure that individuals in higher income brackets contribute more toward the cost of their Medicare coverage. Here’s what you need to know about how IRMAAs work and how they may affect you.
For personalized help planning your finances for retirement, consider speaking with a financial advisor.
What Is IRMAA?
An income-related monthly adjustment amount (IRMAA) is a surcharge added to your Medicare Part B and Part D premiums if your income exceeds certain thresholds. It helps ensure that higher-income beneficiaries contribute more to the Medicare system, supporting its long-term sustainability.
When building and following a retirement budget, it’s important to understand how IRMAA is calculated and how it can affect your Medicare costs. Knowing your income levels and any potential surcharges can help you better plan for your future healthcare costs.
Medicare Parts B and D differ in their coverage.
- Part B covers medically necessary and preventive services such as doctor visits, lab work, surgeries and home health care.
- Part D helps cover the cost of prescription drugs, protecting you from high out-of-pocket expenses.
The surcharge is based on your modified adjusted gross income (MAGI) from two years prior. That means the IRMAA you may owe in 2025 is based on your 2023 MAGI.
How to Calculate IRMAA
Your IRMAA primarily uses your MAGI. This includes your adjusted gross income (AGI), plus any tax-exempt interest income.
The Social Security Administration (SSA) also considers your tax filing status.
- Single
- Married filing jointly
- Head of household
- Married filing separately
The SSA may also factor in life-changing events that significantly affect your income, such as marriage, divorce or the death of a spouse. If you experience one of these events, you may be able to request a reassessment of your IRMAA.
To calculate IRMAA, you must use the following.
- Lookback period. IRMAA uses your MAGI from two years prior. For example, you calculate your 2024 IRMAA using your 2022 tax return.
- Income brackets. The SSA places beneficiaries into income brackets. Each bracket corresponds to a different IRMAA surcharge, which applies to both Medicare Part B and Part D premiums.
- Higher income = higher IRMAA. The more you earn, the more you pay in IRMAA surcharges. This increases your total monthly Medicare premiums.
Let’s take a look at an example. If you’re single and your 2024 MAGI was $109,000 or less, you won’t owe IRMAA in 2026. 1 The same goes if you’re married filing jointly with a MAGI of $218,000 or less.
If your income exceeds those thresholds, you will owe an additional IRMAA surcharge on top of your standard Medicare Part B and Part D premiums.
How Much Are IRMAAs and Who Pays Them?
When budgeting for your Medicare expenses, it’s important to factor in the annual cost of IRMAAs.
Remember, these costs are in addition to your regular Medicare premium amounts. This extra charge is added to the cost of your monthly Part B and Part D premiums if your income exceeds a certain limit.
These are the IRMAA income thresholds for 2026.
2026 Medicare Full Part B: IRMAAs and Total Premiums 2
| MAGI for Beneficiaries Who Filed 2024 Individual Tax Returns | MAGI for Beneficiaries Who Filed 2024 Joint Tax Returns | Total Monthly Premium |
|---|---|---|
| Up to $109,000 | Up to $218,000 | $202.90 |
| More than $109,000 and less than or equal to $137,000 | More than $218,000 and less than or equal to $274,000 | $284.10 |
| More than $137,000 and less than or equal to $171,000 | More than $274,000 and less than or equal to $342,000 | $405.80 |
| More than $171,000 and less than or equal to $205,000 | More than $342,000 and less than or equal to $410,000 | $527.50 |
| More than $205,000 and less than $500,000 | More than $410,000 and less than $750,000 | $649.20 |
| More than or equal to $500,000 | More than or equal to $750,000 | $689.90 |
However, high-income Medicare beneficiaries are subject to different IRMAAs and premiums if they only have Part B immunosuppressive drug coverage.
2026 Medicare Part B Immunosuppressive Drug Coverage Only: Total Premiums
| MAGI for Beneficiaries Who Filed 2024 Individual Tax Returns | MAGI for Beneficiaries Who Filed 2024 Joint Tax Returns | IRMAA | Total Monthly Premium |
|---|---|---|---|
| Up to $109,000 | Up to $218,000 | $0.00 | $121.60 |
| More than $109,000 and less than or equal to $137,000 | More than $218,000 and less than or equal to $274,000 | $81.10 | $202.70 |
| More than $137,000 and less than or equal to $171,000 | More than $274,000 and less than or equal to $342,000 | $202.70 | $324.30 |
| More than $171,000 and less than or equal to $205,000 | More than $342,000 and less than or equal to $410,000 | $324.30 | $445.90 |
| More than $205,000 and less than $500,000 | More than $410,000 and less than $750,000 | $445.90 | $567.50 |
| More than or equal to $500,000 | More than or equal to $750,000 | $486.50 | $608.10 |
Part D premiums vary, depending on your Medicare plan. However, about 8% of beneficiaries pay an IRMAA in addition to their premiums, according to Centers for Medicare and Medicaid Services.
About a third of beneficiaries have their premiums and IRMAAs deducted from their Social Security checks. The remainder make their payments directly to their plan.
2026 Medicare Part D IRMAAs 3
| MAGI for Beneficiaries Who Filed 2023 Individual Tax Returns | MAGI for Beneficiaries Who Filed 2023 Joint Tax Returns | IRMAA |
|---|---|---|
| Up to $109,000 | Up to $218,000 | $0.00 |
| More than $109,000 and less than or equal to $137,000 | More than $218,000 and less than or equal to $274,000 | $14.50 |
| More than $137,000 and less than or equal to $171,000 | More than $274,000 and less than or equal to $342,000 | $37.50 |
| More than $171,000 and less than or equal to $205,000 | More than $342,000 and less than or equal to $410,000 | $60.40 |
| More than $205,000 and less than $500,000 | More than $410,000 and less than $750,000 | $83.30 |
| More than or equal to $500,000 | More than or equal to $750,000 | $91.00 |
Appealing Your IRMAA
If you disagree with your IRMAA determination, or if your income has significantly decreased due to certain life-changing events, you have the right to appeal the decision through the SSA-44 form.
On this form, explain why you believe the IRMAA determination is incorrect. Be sure to provide evidence to support your claims, such as documentation of a life-changing event or proof of an income reduction.
Once completed, the form should be submitted to your local Social Security office for review. You’ll then receive a new determination based on your SSA-44 request.
If you’re not satisfied with the decision, there are other levels of appeal available to you. These include requesting a hearing by an administrative law judge, requesting a review by the Appeals Council or taking the matter to federal court.
Paying Your IRMAA
When paying IRMAA charges, you have several options.
Your Medicare Part B premium and IRMAA surcharge automatically come out of your monthly Social Security or Railroad Retirement Board benefits, if you receive them. It is a convenient way to manage your payments without taking extra steps.
If you don’t receive these benefits, you’ll be billed directly. You can pay your IRMAA charges several ways.
- By mail using a payment coupon
- In person at your local Social Security office
- Online through your bank’s bill pay system
- Online via Medicare’s Biller Direct Express service
Automatic deductions work well for those who receive regular benefits and prefer a hands-off approach. However, if your income varies or you prefer more control over when and how you pay, you can also opt for direct billing.
Don’t Forget Late Enrollment Penalties
It’s also important to stay on top of enrollment deadlines.
For Part D, the penalty is 1% of the national base premium multiplied by the number of full months you didn’t have creditable prescription drug coverage.
If you are late enrolling in Part B, you could face a 10% penalty for each full 12-month period you were eligible but didn’t sign up.
Strategies to Reduce or Avoid IRMAA
Because IRMAA is based on your income from two years prior, proactive planning well before you reach Medicare age can make a meaningful difference in what you pay each month.
Roth Conversions
One of the most effective long-term strategies is executing Roth conversions before age 63. Converting funds from a traditional IRA to a Roth IRA increases your taxable income in the year of the conversion, but it reduces the balance of your traditional IRA and therefore lowers your required minimum distributions (RMDs) later.
Since RMDs count toward your MAGI, reducing them can help keep your income below IRMAA thresholds in the years that matter most. The window between retirement and age 63 is often ideal for this strategy, when income tends to drop before Social Security and RMDs kick in.
IRMAA Cliff
Being mindful of the IRMAA cliff is equally important.
Because the surcharge applies to an entire bracket rather than just the income above the threshold, crossing a cutoff by even a small amount can trigger a disproportionately large increase in your monthly premium. For example, a married couple whose 2024 MAGI is $275,000 rather than $274,000 would owe an additional $37.50 per month.
Careful income management around these thresholds can prevent costly bracket creep. This is particularly critical in years that will serve as the lookback period for future IRMAA calculations.
Timing
Timing large one-time income events is another area where planning pays off.
Selling a property, taking a large retirement account distribution or realizing significant capital gains in a single year can push your MAGI above an IRMAA threshold unexpectedly. Spreading these events across multiple years or coordinating them with years when other income is lower can help you avoid an unintended surcharge.
Qualified Charitable Distributions
For those who are charitably inclined and over age 70 ½, qualified charitable distributions (QCDs) can be a useful tool for managing MAGI 4 . This approach allows you to direct funds from your IRA straight to a qualifying charity. Because the amount never passes through your hands as taxable income, it does not count toward your MAGI the way a standard withdrawal would.
Keeping that income off your tax return can help prevent your earnings from crossing an IRMAA threshold in a given year.
Selling Positions
Investors with taxable brokerage accounts have another option worth considering.
When a portfolio holds positions that have declined in value, selling those positions to offset gains elsewhere in the portfolio can reduce your net investment income for the year. This can be a practical way to trim your MAGI when it is close to an IRMAA cutoff, as long as the decision makes sense within your investment strategy.
Because IRMAA planning requires coordinating multiple income sources, account types and timing decisions simultaneously, working with a financial advisor in the years leading up to Medicare eligibility is particularly valuable.
A well-constructed plan that accounts for IRMAA thresholds, tax brackets and Social Security timing can yield substantial savings over the course of a long retirement.
Bottom Line
The income-related monthly adjustment amount (IRMAA) is an essential component of Medicare, serving as a mechanism to ensure fairness and financial stability within the healthcare system. It adjusts Medicare Part B and Part D premiums based on a beneficiary’s income, requiring higher-income beneficiaries to contribute more. The implications of IRMAA can significantly impact individuals’ budget planning, particularly during retirement.
Healthcare Planning Tips
- Medical bills and healthcare expenses can quickly drain your retirement savings. A financial advisor can help you plan for these costs. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area. You can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- If you’d prefer to go it alone, be sure to familiarize yourself with the various ways to guard against medical costs that could derail your financial plans in retirement.
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Article Sources
All articles are reviewed and updated by SmartAsset’s fact-checkers for accuracy. Visit our Editorial Policy for more details on our overall journalistic standards.
- “2026 Medicare Parts A & B Premiums and Deductibles.” Centers for Medicare & Medicaid Services CMS Newsroom CMS Newsroom, Apr. 10, 2026, https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles.
- Social Security Administration. Jan. 2026, https://secure.ssa.gov/poms.nsf/lnx/0601001016.
- “2026 Medicare Parts A & B Premiums and Deductibles.” Centers for Medicare & Medicaid Services CMS Newsroom CMS Newsroom, Apr. 10, 2026, https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles.
- “Important Charitable Giving Reminders for Taxpayers | Internal Revenue Service.” Home, https://www.irs.gov/newsroom/important-charitable-giving-reminders-for-taxpayers. Accessed Apr. 28, 2026.