IRMAA: The Hidden Medicare Surcharge That Catches High Earners Off Guard

Every year, thousands of successful retirees open a letter from the Social Security Administration and discover that their Medicare premiums have more than doubled. Nothing changed about their health. Nothing changed about their coverage. They did not switch plans, add benefits, or file a single extra claim.

What changed was a number on a tax return they filed two years ago.

That letter is an IRMAA determination notice, and it is one of the most misunderstood costs in American retirement. Here in Central Florida, where a large share of our neighbors are retired executives, physicians, business owners, federal retirees, and dual-income professionals who spent forty years building a substantial nest egg, IRMAA is not a rare edge case. It is a recurring, predictable, and largely preventable expense that quietly drains thousands of dollars a year from households that never saw it coming.

At Roger Fishel Financial, we work with pre-retirees and retirees across Orlando, Winter Park, Winter Garden, Lake Mary, Clermont, Oviedo, Lake Nona, Kissimmee, and the surrounding Central Florida communities, and we also serve clients nationwide through virtual meetings. IRMAA comes up in almost every retirement income plan we build. Not because it is exotic, but because it is triggered by the exact strategies most people are told to pursue: Roth conversions, required minimum distributions, selling appreciated property, and harvesting capital gains.

This guide explains what IRMAA is, what it costs in 2026, exactly which income triggers it, how to appeal it, and the planning moves that keep it from eating into your retirement income year after year.

If you want the short version applied directly to your own numbers, you can book a free retirement clarity session and we will map your IRMAA exposure for the next several years in one conversation.

What Is IRMAA?

IRMAA stands for Income-Related Monthly Adjustment Amount. It is a surcharge added to your Medicare Part B and Part D premiums when your modified adjusted gross income from two years ago exceeds a federal threshold. In 2026, IRMAA begins at $109,000 of MAGI for single filers and $218,000 for married couples filing jointly.

That is the entire concept in one paragraph, and it is worth reading twice, because three details inside it cause nearly every IRMAA surprise we see.

First, IRMAA is based on income, not assets. You can have eight million dollars in a brokerage account and pay no IRMAA if you generate very little taxable income. You can have far less and pay the top surcharge because you sold a rental property in a single year.

Second, IRMAA looks backward two full years. Your 2026 Medicare premiums are determined by the tax return you filed in 2025 for the 2024 tax year. By the time you feel the cost, the income event that caused it is ancient history.

Third, IRMAA is not a tax bracket. It is a cliff. Cross a threshold by one dollar and you owe the entire surcharge for that tier, all year, for both spouses if both are on Medicare.

Who Pays IRMAA

IRMAA applies to Medicare beneficiaries enrolled in Part B, Part D, or both. According to Medicare Trustees data, fewer than ten percent of Part B beneficiaries pay IRMAA in any given year. That statistic is comforting until you realize which ten percent it is: precisely the households that did the best job saving, the ones who now hold large traditional IRAs and 401(k) balances, and the ones with pensions, deferred compensation, or real estate gains.

If you are reading an article about IRMAA, there is a reasonable chance you are in or near that group.

IRMAA Applies to Medicare Advantage Too

This is one of the most common misconceptions we correct in client meetings. People assume that because a Medicare Advantage plan advertises a zero dollar premium, IRMAA does not apply to them.

IRMAA applies regardless of whether you choose Original Medicare with a supplement or a Medicare Advantage plan. Part B premiums are owed by every enrollee in either path, and the Part D surcharge follows you into a Medicare Advantage prescription drug plan as well. Choosing a zero premium Medicare Advantage plan does not reduce your IRMAA by a single dollar.

If you are still weighing coverage paths, our comparison of Medicare Supplement versus Medicare Advantage in Florida walks through the tradeoffs that actually matter in Central Florida provider networks.

What IRMAA Is Not

• It is not a penalty for late enrollment. That is a separate, permanent surcharge with different rules.
• It is not permanent. IRMAA is recalculated every single year.
• It is not applied to Medicare Part A. Part A is premium free for most beneficiaries, and even those who pay a Part A premium owe no income-related surcharge on it.
• It is not negotiable with your plan carrier. IRMAA is determined by the Social Security Administration using IRS data, and it is paid to Medicare.

The 2026 IRMAA Brackets: Exactly What You Will Pay

The standard Medicare Part B premium in 2026 is $202.90 per month, up from $185.00 in 2025. That is a 9.7 percent increase, one of the steepest single-year jumps in recent memory. The 2026 Part B annual deductible is $283.

Your 2026 IRMAA tier is determined by the modified adjusted gross income reported on your 2024 federal tax return.

2026 IRMAA Brackets for Part B and Part D

Source: Centers for Medicare and Medicaid Services, 2026 Medicare Parts A and B premiums and deductibles fact sheet, released November 14, 2025.

What IRMAA Actually Costs Per Year

Monthly numbers understate the pain. Here is the same table expressed as annual out-of-pocket cost above the standard premium, which is the number that belongs in your retirement budget.

A Central Florida couple in the top tier pays nearly fourteen thousand dollars a year in Medicare surcharges alone. That is a car payment, a property tax bill, and a decent vacation, gone, every year, for a cost most people never budgeted for.

Married Filing Separately Is Treated Harshly

If you are married, lived with your spouse at any point during the tax year, and file separately, you do not get the joint brackets and you do not get the full single ladder either. You get a compressed structure that pushes you into the highest tiers very quickly. In 2026, a married-filing-separately taxpayer above roughly $391,000 of MAGI lands in the top tier.

This matters more than people expect, because separate filing is sometimes recommended for reasons that have nothing to do with Medicare, such as income-driven student loan repayment or liability separation. Before you file separately in any year you are on Medicare or within two years of enrolling, run the IRMAA math.

The Two-Year Lookback: Why Your 2024 Tax Return Controls Your 2026 Premium

The single most important mechanical fact about IRMAA is the timing lag. The Social Security Administration determines your IRMAA using the most recent tax return the IRS has transmitted, which is always two years old.

Which Tax Year Controls Which Premium Year

Read that table again with a planner’s eye and you will see the opportunity hiding inside it. The income decisions you make right now, in 2026, are setting your 2028 Medicare premiums. You are not powerless. You are simply operating on a two-year fuse, and almost nobody plans that far ahead without help.

Why the Lag Blindsides Newly Retired Professionals

Consider a common Central Florida profile. A Lake Mary executive works through 2024, earns a final year salary of $240,000 plus a bonus and a deferred compensation payout, and retires in early 2025 at age 64. She enrolls in Medicare when she turns 65 in 2026.

Her actual 2026 income is about $95,000 from Social Security, a modest pension, and portfolio withdrawals. She has planned around that number.

Medicare, however, looks at her 2024 return. She lands in the third tier and pays $405.80 a month for Part B plus a Part D surcharge, roughly $4,600 for the year in surcharges on income she no longer earns.

This exact scenario is appealable, and we will cover how below. But the reason it happens so often is that people enroll in Medicare during a life transition, and nobody tells them the enrollment paperwork and the premium calculation are looking at two completely different chapters of their life.

The Projected 2027 and 2028 Brackets

Thresholds adjust annually for inflation, except the top tier, which remains frozen at $500,000 for single filers and $750,000 for joint filers.

Based on published CPI data through mid-2026, the projected first-tier threshold for 2027 is approximately $112,000 for single filers and $224,000 for joint filers, based on your 2025 income. Projections for 2028, based on 2026 income, currently fall in the range of roughly $114,000 to $116,000 single and $228,000 to $232,000 joint, depending on inflation between now and August 2027.

Two important cautions about those projections. First, they are estimates, not law, and the Social Security Administration will publish official figures each November. Second, and more significantly, the Medicare Trustees Report projects a substantial restructuring of Part D surcharge multipliers beginning in 2030, which would push Part D IRMAA meaningfully higher for everyone above the first threshold. If you are building a ten-year or twenty-year Roth conversion plan, assuming today’s IRMAA cost structure holds forever is a mistake.

The Cliff Effect: How One Dollar Can Cost You Thousands

This is the part of IRMAA that makes people genuinely angry, and it deserves its own section because it is the difference between a nuisance and a planning emergency.

IRMAA is not progressive. It is a cliff. If your MAGI exceeds a threshold by one dollar, you pay the full surcharge for that entire tier, for all twelve months, not just on the excess amount.

A One Dollar Mistake, Priced Out

A single retiree in Winter Park has 2024 MAGI of exactly $109,000. She pays the standard $202.90 per month in 2026. No surcharge.

Her neighbor, in an otherwise identical situation, has 2024 MAGI of $109,001. That extra dollar costs him $1,148.40 over the course of 2026.

That is an effective marginal rate of over one hundred thousand percent on a single dollar of income.

For a married couple where both spouses are on Medicare, the number doubles. One dollar over $218,000 of joint MAGI in 2024 costs the household $2,296.80 in 2026.

The Cost of Each Cliff, Per Couple

Notice what this means for Roth conversion planning. A couple deciding whether to convert one more $30,000 slice of their traditional IRA is not just weighing the income tax on that conversion. If that slice pushes them from tier one into tier two, they are also volunteering to pay an extra $3,472.80 in Medicare surcharges two years later. That is an additional 11.6 percent effective cost layered on top of the federal income tax on the conversion.

Nobody tells you that when you read a generic article about how Roth conversions are always a good idea.

They often are a good idea. We recommend them regularly. But the right conversion amount is the one that fills your target tax bracket and stops short of the next IRMAA cliff, and finding that number requires knowing all of your income sources with precision before December 31.

Why the Cliff Punishes People Who Are Close, Not People Who Are Rich

Here is the uncomfortable truth about IRMAA design. A household with $2 million of income barely notices the top surcharge. A household with $220,000 of income, which in Orlando might be a retired teacher with a pension married to a retired hospital administrator, feels every dollar of it, and they are the ones most likely to cross a threshold accidentally.

The people harmed most by IRMAA are not the wealthy. They are the ones sitting near a line they did not know existed.

What Counts as MAGI for IRMAA (and What Does Not)

IRMAA uses its own definition of modified adjusted gross income, and it is not the same MAGI used for ACA subsidies, Roth contribution limits, or student loan interest deductions. Getting this wrong is a common and expensive error.

For IRMAA purposes, MAGI equals your adjusted gross income (Form 1040, line 11) plus tax-exempt interest.

That is the whole formula. It is short, but the implications are large.

Income That Counts Toward IRMAA MAGI

• Wages, salary, self-employment income, and net business income
• Traditional IRA and 401(k) withdrawals, including required minimum distributions
• Roth conversion amounts, in the year of conversion
• Pension and annuity income that is taxable
• The taxable portion of your Social Security benefits
• Capital gains, both short term and long term, including the gain on a home sale above the exclusion
• Interest, dividends, and rental income
• Tax-exempt municipal bond interest, which is added back even though it is not subject to federal income tax
• Distributions from inherited IRAs
• Deferred compensation payouts and stock option exercises
• Withdrawals from non-qualified annuities, to the extent of gain
• Farm income, royalties, and partnership pass-through income

Income That Does Not Count Toward IRMAA MAGI

• Qualified withdrawals from Roth IRAs and Roth 401(k)s
• The non-taxable portion of your Social Security benefits
• Return of principal from a non-qualified annuity, taxable brokerage account, or bank CD
• Proceeds from a life insurance death benefit
• Qualified charitable distributions made directly from an IRA, which reduce your taxable RMD
• Health savings account distributions used for qualified medical expenses
• Loan proceeds, including reverse mortgage draws and margin loans
• Gifts and inheritances received, though the income those assets later generate does count
• Long-term care insurance benefits paid under a qualified policy

The gap between those two lists is where retirement income planning lives. Two retirees can enjoy the identical lifestyle, spend the identical amount each year, and land in completely different IRMAA tiers based purely on which accounts they draw from and in what order.

That is not a loophole. That is planning.

The Municipal Bond Surprise

A specific warning, because it burns Central Florida retirees frequently. Many affluent retirees hold municipal bonds specifically because the interest is free of federal income tax, and here in Florida there is no state income tax to shelter from in the first place.

Tax-exempt muni interest is added back into IRMAA MAGI. It is exempt from income tax and fully counted for Medicare surcharge purposes. A retiree with a large muni portfolio can be pushed into a higher IRMAA tier by income that never appears as taxable on their return.

Eleven Income Events That Trigger IRMAA

In our experience, IRMAA surprises almost never come from ordinary recurring income. People generally have a decent handle on their pension and Social Security. IRMAA comes from one-time events, and they cluster into a predictable list.

1. Roth Conversions

The most common self-inflicted trigger. Conversions are usually the right long-term move, especially for households facing large future RMDs or a surviving spouse who will file as single. But conversion amounts land in MAGI dollar for dollar in the conversion year, and they hit your Medicare premiums two years later.

2. Required Minimum Distributions

RMDs begin at age 73 for most current retirees. A $1.5 million traditional IRA generates a first-year RMD of roughly $56,600. Layered on top of Social Security, a pension, and dividends, that alone can push a couple past the first threshold. Unlike a Roth conversion, an RMD is not optional, which is exactly why the planning has to happen in the years before RMDs begin.

3. Selling a Rental or Second Home

Central Florida property values have appreciated dramatically. A Kissimmee short-term rental purchased in 2013 and sold today can generate a six-figure capital gain plus depreciation recapture, all landing in one tax year. The Section 121 exclusion does not apply to investment property.

4. Selling Your Primary Residence Above the Exclusion

The primary residence exclusion is $250,000 of gain for single filers and $500,000 for married couples filing jointly. Those numbers have not been indexed for inflation since 1997. A couple who bought in Winter Park or Windermere thirty years ago can easily exceed $500,000 of gain, and every dollar above the exclusion counts toward IRMAA MAGI.

5. Selling a Business or Professional Practice

The exit event most business owners spend a career working toward is often their single largest IRMAA event. A practice sale, an earnout, or a partnership buyout concentrated in one year can push a seller into the top tier for one year, and sometimes two if the earnout straddles tax years.

6. Large Capital Gains or Concentrated Stock Sales

Rebalancing out of a concentrated position, taking gains after a strong market year, or a mutual fund’s year-end capital gain distribution you did not choose to receive. That last one is worth emphasizing: a fund can distribute a large capital gain in December even if you never sold a share.

7. Inherited IRA Distributions Under the Ten-Year Rule

Non-spouse beneficiaries who inherited an IRA after 2019 must generally empty the account within ten years, and many must take annual distributions along the way. A retiree who inherits a large IRA from a sibling or parent can be pushed into IRMAA tiers for a decade.

8. Pension Lump Sum Payouts

Taking a lump sum instead of a monthly annuity converts decades of income into a single tax year, unless it is rolled over. If you are weighing this decision, the IRMAA consequence belongs in the analysis alongside the interest rate assumptions and mortality math.

9. Deferred Compensation and Stock Option Exercises

Non-qualified deferred comp payouts often land in the first years of retirement, exactly when people believe their income has dropped. Similarly, exercising incentive or non-qualified stock options can generate a large one-year spike.

10. Annuity Surrenders and Non-Qualified Withdrawals

Withdrawals from non-qualified annuities come out gain first for tax purposes. Surrendering a highly appreciated contract in one year can create an IRMAA event that spreading the withdrawal over three years would have avoided entirely.

11. Losing a Spouse

The most painful item on this list, and we will address it separately below.

The Widow’s Penalty: How IRMAA Compounds Loss

When a spouse dies, the surviving spouse typically files as single beginning in the tax year after the death. Nothing about IRMAA thresholds is forgiving here.

The single filer IRMAA thresholds are exactly half of the joint thresholds. In 2026, a couple can have $218,000 of MAGI with no surcharge. A survivor with $109,001 pays a surcharge.

Now consider what actually happens to household income. The survivor loses the smaller of the two Social Security benefits. A pension may drop to a fifty percent or seventy-five percent survivor benefit, or terminate. But the traditional IRA balance does not shrink. The RMD does not shrink. The dividends, interest, and rental income do not shrink.

Household income might fall by twenty-five to thirty-five percent. The IRMAA threshold falls by fifty percent. The result is that a surviving spouse can pay a larger Medicare surcharge on materially less income, in the same year they are grieving.

This is one of the strongest arguments for doing Roth conversions during the joint filing years, even at the cost of some IRMAA today. Paying a tier one surcharge for a few years while both spouses are alive is often cheaper than leaving a surviving spouse with a large traditional IRA, single brackets, and a decade of tier three surcharges ahead.

We build this scenario into every plan where there is a meaningful age gap or health difference between spouses. It is not pleasant to model, and it is one of the most valuable things a retirement income plan can do.

How to Appeal IRMAA With Form SSA-44

Here is the good news that most people never hear: if your income dropped because of a qualifying life-changing event, you can appeal your IRMAA determination and have it recalculated using your current income instead of your two-year-old income.

The form is Form SSA-44, Medicare Income-Related Monthly Adjustment Amount Life-Changing Event. It is two pages. It is free. It works.

The Eight Qualifying Life-Changing Events

The Social Security Administration will reconsider your IRMAA if your income declined because of any of the following:

1. Death of a spouse
2. Marriage
3. Divorce or annulment
4. Work stoppage, including retirement
5. Work reduction, such as moving to part-time or reducing hours
6. Loss of income-producing property, due to a disaster, theft, fraud, or similar event outside your control
7. Loss of pension income, when a pension plan terminates or benefits are reduced
8. Employer settlement payment, resulting from an employer bankruptcy or reorganization

Retirement is the big one. If you retired and your income fell, you almost certainly qualify, and yet an enormous number of newly retired people simply pay the surcharge because they assume the letter is final.

What Does Not Qualify for an Appeal

This distinction is critical, and it is the reason planning matters more than appeals.

You cannot appeal IRMAA caused by:

• A Roth conversion
• A capital gain from selling property, stock, or a business
• A required minimum distribution
• An inherited IRA distribution
• A one-time bonus or unusual investment income
• Simply having a higher income than you expected

In other words, the government will forgive income you lost involuntarily. It will not forgive income you chose to create. Every trigger on the list of eleven above, except losing a spouse and certain pension losses, falls into the unforgivable category.

How to File the Appeal

1. Wait for your IRMAA determination notice from Social Security, usually mailed in November or December.
2. Complete Form SSA-44, available at ssa.gov. You will select the life-changing event, provide the date, and report your estimated modified adjusted gross income for the current year and, if relevant, the following year.
3. Attach documentation. A retirement letter from your employer, a death certificate, a divorce decree, a pension termination notice, or a signed statement describing the work stoppage.
4. Submit it to your local Social Security office, by mail, by fax, or in person. Central Florida beneficiaries can file at Social Security offices serving Orlando, Winter Park, Kissimmee, Sanford, and surrounding areas, or handle it by mail.
5. File within sixty days of receiving the determination notice if you are formally requesting reconsideration.

Appeal Realities Worth Knowing

• You can file an SSA-44 proactively, in the same year you retire, without waiting for a notice. If you know your income has dropped, do not wait to be billed.
• Approval is not automatic, and documentation quality matters. A one-line statement is weaker than an employer letter with a separation date.
• If your appeal is denied, you can request a formal reconsideration and, beyond that, a hearing.
• IRMAA is recalculated annually regardless. If your high income was a one-time event and you do not qualify for an appeal, you pay the surcharge for one year and it falls off on its own. That is genuinely important perspective. A single bad year is a single bad year, not a life sentence.

IRMAA Planning Strategies That Actually Work

Appeals fix the past. Planning fixes the future. These are the strategies we use most often with clients, roughly in order of how frequently they apply.

Multi-Year Roth Conversion Sequencing

The goal is not to avoid Roth conversions. The goal is to convert the right amount every year for many years instead of a large amount in a few years.

A well-built conversion plan looks at your projected income from every source, identifies the tax bracket ceiling and the IRMAA threshold that applies in each year, and converts up to whichever limit binds first, leaving a deliberate buffer. Done across ten or fifteen years, this moves an enormous amount of money into tax-free status while paying either no IRMAA or one tier of it by choice rather than by accident.

The window between retirement and the start of RMDs, typically ages 62 to 73, is the most valuable tax planning window most people will ever have. It is also the window most people spend doing nothing.

Build a Buffer Below the Threshold

Never plan to land exactly at the line. Aim to finish the year with $5,000 to $10,000 of headroom below your target threshold.

Why? Because you do not control everything. A mutual fund declares an unexpected year-end capital gain distribution. A 1099 arrives with more dividend income than projected. A K-1 shows up in March with a number you did not anticipate. Any of those can push you over a cliff you thought you had cleared, and by then the tax year is closed.

Qualified Charitable Distributions

If you are 70 and a half or older, you can transfer up to a set annual limit directly from your IRA to a qualified charity. The distribution satisfies part or all of your RMD and never enters your adjusted gross income at all.

For charitably inclined retirees, this is the single cleanest IRMAA reduction tool available. You get the full benefit whether or not you itemize, and the amount simply never appears in MAGI.

Compare that to writing a check to the same charity from your checking account. Same charity, same dollar amount, completely different Medicare consequence.

Tax-Efficient Withdrawal Sequencing

Most retirees are told to spend taxable accounts first, then tax-deferred, then Roth. That default is often wrong, and it is frequently wrong specifically because of IRMAA.

A better approach blends withdrawals across account types each year to hit a target MAGI. In a year where you need $120,000 of spendable income, you might draw $70,000 from tax-deferred accounts, $30,000 of principal from a taxable account, and $20,000 from a Roth, producing a MAGI far below what a single-source withdrawal would generate.

The spending is identical. The Medicare premium is not.

Time Large Sales Deliberately

If you are selling a rental property, a business, or a concentrated stock position, the calendar is a planning tool.

• Consider an installment sale to spread gain across multiple tax years
• For real estate, evaluate whether a 1031 exchange fits your goals
• If you are close to Medicare age, ask whether the sale can be completed before the tax year that will control your first Medicare premium year
• If a sale is unavoidable in one year, consider accelerating other income into that same year, since you are already paying the surcharge and the marginal IRMAA cost of additional income within the same tier is zero

That last point is counterintuitive and powerful. Once you have crossed into a tier, income up to the next threshold carries no additional IRMAA cost. A year you have already lost is often the best year to do a large Roth conversion.

Donor-Advised Funds for Lumpy Charitable Giving

Bunching several years of charitable giving into one high-income year through a donor-advised fund can reduce AGI in the year it matters most while allowing you to distribute grants to charities over time.

Manage Investment Income Location

Hold interest-generating and high-turnover assets inside tax-deferred accounts where the income does not surface annually. Hold tax-efficient equity index funds in taxable accounts. Be alert to mutual funds with a history of large capital gain distributions and consider exchange-traded alternatives in taxable accounts.

And remember that municipal bond interest, despite being tax-exempt, is counted for IRMAA. In a no-income-tax state like Florida, the case for munis is already narrower than it is for a New York or California resident, and the IRMAA add-back narrows it further.

Health Savings Account Funding Before Medicare

If you are still working and covered by a high-deductible health plan, maximizing HSA contributions before you enroll in Medicare builds a pool of money you can spend in retirement on medical costs with zero MAGI impact. Note that HSA contributions must stop once you enroll in Medicare, and there is a six-month lookback rule when you enroll after age 65.

Coordinate With Your Coverage Decisions

IRMAA is one component of your total Medicare cost. The other components are your supplement or Medicare Advantage premium, your drug plan, your deductibles, and your out-of-pocket exposure. Optimizing one while ignoring the others is not planning.

Our Florida healthcare planning page walks through how we integrate Medicare costs, long-term care exposure, and healthcare inflation into a complete retirement income plan, and our guide to Medicare health insurance plans in Florida and Orlando covers how local plan availability and network structure differ across Central Florida counties.

Why IRMAA Hits Central Florida Retirees Especially Hard

IRMAA is a federal rule that applies identically in every state. So why do we see it so often in Orlando and the surrounding communities? Four reasons specific to this region.

1. No State Income Tax Creates a False Sense of Tax Safety

Florida has no state income tax, which is precisely why so many high earners retire here. The unintended consequence is that many retirees stop thinking about income taxes altogether once they establish Florida domicile.

IRMAA is federal. It does not care that you moved from New Jersey to Lake Nona. A retiree who has trained themselves to think “Florida means no income tax consequences” is exactly the retiree who executes a large Roth conversion or property sale without checking the Medicare implication.

If you are a recent transplant, note that establishing Florida domicile is genuinely valuable for state tax purposes and does nothing whatsoever for IRMAA.

2. Extraordinary Real Estate Appreciation

Central Florida home values have risen substantially over the past decade, and the primary residence capital gain exclusion of $250,000 single and $500,000 joint has not been adjusted since 1997.

A couple who bought in Winter Park, Windermere, Baldwin Park, or Celebration in the 1990s and sells today can clear the exclusion by hundreds of thousands of dollars. Add in the enormous inventory of investment property in Kissimmee, Davenport, and the Disney corridor, where short-term rentals purchased a decade ago carry both large gains and depreciation recapture, and you have a region generating one-time capital gains at unusual scale.

Every dollar above the exclusion is IRMAA MAGI.

3. A Concentration of High-Income Professionals and Business Owners

The Central Florida economy has produced a large population of retirees from healthcare systems, aerospace and defense, hospitality management, higher education, technology, and professional services. Many of them retired with substantial 401(k) and 403(b) balances, deferred compensation arrangements, and pensions.

Large tax-deferred balances mean large RMDs. Large RMDs mean IRMAA is not a possibility, it is a schedule.

4. Snowbirds, Second Homes, and Split Residency

A significant share of Central Florida retirees maintain property in another state, often the Northeast or the Midwest. Selling the northern home, converting it to a rental, or eventually selling both creates concentrated income events. Add complications around residency, state taxation of the sale, and timing, and the IRMAA consequence frequently gets lost in the shuffle.

Case Study: A Winter Garden Couple and a $9,240 Mistake

Names and details are composited and changed, but the numbers are typical of what we see.

A married couple, both age 68 and both on Medicare, live in Winter Garden. Their recurring income in 2024 looked like this:

• Combined Social Security, taxable portion: $52,000
• Pension: $48,000
• Interest, dividends, and taxable brokerage income: $38,000
• Traditional IRA withdrawals: $40,000

Total MAGI before any planning: $178,000. Comfortably below the $218,000 joint threshold, with $40,000 of room.

In November 2024, their prior advisor recommended a Roth conversion. The reasoning was sound in isolation: the couple was in a relatively low bracket, they had a combined $2.1 million in traditional IRAs, and future RMDs plus a potential widow’s penalty made conversions attractive.

The conversion amount was $180,000.

Their 2024 MAGI came in at $358,000. That placed them in the fourth tier for 2026.

The IRMAA cost, for that one conversion, was $12,710.40 across both spouses for calendar year 2026.

Now here is what makes it a mistake rather than a tradeoff. Had that same $180,000 been converted as $60,000 per year across 2024, 2025, and 2026, each year’s MAGI would have landed at $238,000, keeping them in tier one. The three-year IRMAA cost would have been roughly $6,890 total. Same amount converted. Same tax brackets, roughly. Nearly $5,800 saved in Medicare surcharges, plus a lower federal income tax bill because the income was spread across three years of bracket space instead of stacked into one.

The conversion was right. The sizing and sequencing were not.

That is the entire discipline of IRMAA planning in one example. It is rarely about whether to do something. It is about how much and in which year.

Case Study: A Lake Mary Retiree Who Appealed and Won

A 66-year-old retired healthcare administrator enrolled in Medicare in 2026. Her 2024 income, her final full year of work, was $196,000. That placed her in tier three for 2026, with a Part B premium of $527.50 per month plus a $60.40 Part D surcharge.

Her actual 2026 income, post-retirement, is $88,000.

She filed Form SSA-44, checked the box for work stoppage, attached her employer’s separation letter with her retirement date, and estimated her current-year MAGI at $88,000.

Social Security recalculated her premium to the standard $202.90 with no Part D surcharge. Her annual savings were $4,620.

She spent about forty-five minutes on a two-page form. Most people in her exact situation never file it, because they were never told it existed.

If you retired in the last two years and you are paying more than the standard Part B premium, this is the single highest-value hour you can spend this month.

How We Approach IRMAA at Roger Fishel Financial

We do not treat IRMAA as a footnote. It is a line item in every retirement income plan we build, projected forward for a decade or more alongside your tax brackets, RMD schedule, Social Security claiming strategy, and healthcare costs.

A complete IRMAA review looks at:

• Your projected MAGI for every year from now through age 90, by source
• Where each year falls relative to current and projected IRMAA thresholds
• The optimal annual Roth conversion amount, sized to your bracket and your nearest threshold
• The timing of any planned property, business, or concentrated position sales
• Whether QCDs, donor-advised funds, or asset location changes reduce your MAGI
• The survivor scenario, modeled for both spouses
• Whether an SSA-44 appeal is available to you right now
• How your Medicare coverage choices interact with all of the above

Our practice is based in Orlando and serves Central Florida communities including Winter Park, Winter Garden, Lake Mary, Clermont, Oviedo, Lake Nona, Kissimmee, Sanford, Apopka, Altamonte Springs, and Dr. Phillips. We also work with clients nationwide through secure virtual meetings, which means the fact that you live in Ohio, Texas, Colorado, or anywhere else does not change our ability to build and maintain your plan. Many of our clients have never sat in our office, and their plans are no less thorough for it.

You can start with a retirement clarity session, which is our structured first conversation about where your retirement income plan actually stands. Or, if you prefer to pick a time directly, book a free consultation here.

There is no cost, no obligation, and no pressure. If your IRMAA exposure turns out to be zero, we will tell you that in the first meeting and you will have lost nothing but thirty minutes.

Frequently Asked Questions About IRMAA

What does IRMAA stand for?

IRMAA stands for Income-Related Monthly Adjustment Amount. It is a surcharge added to Medicare Part B and Part D premiums for beneficiaries whose modified adjusted gross income exceeds federal thresholds.

What income triggers IRMAA in 2026?

In 2026, IRMAA applies when your 2024 modified adjusted gross income exceeded $109,000 for single filers or $218,000 for married couples filing jointly. There are five surcharge tiers above those thresholds.

How much is the Medicare Part B premium in 2026?

The standard 2026 Medicare Part B premium is $202.90 per month. With IRMAA, the monthly Part B premium ranges from $284.10 to $689.90 depending on your income tier. The 2026 Part B deductible is $283.

How far back does Medicare look at my income for IRMAA?

Medicare uses your modified adjusted gross income from two years prior. Your 2026 premiums are based on your 2024 tax return, your 2027 premiums on your 2025 return, and your 2028 premiums on your 2026 return.

Does IRMAA apply to Medicare Advantage plans?

Yes. IRMAA applies to all Medicare beneficiaries enrolled in Part B or Part D, including those in Medicare Advantage plans and Medicare Advantage prescription drug plans. A zero dollar Medicare Advantage premium does not reduce your IRMAA.

Is IRMAA permanent once I trigger it?

No. IRMAA is recalculated every year based on your most recent available tax return. If your income drops back below the threshold, the surcharge disappears the following applicable year without any action on your part.

Can I appeal IRMAA?

Yes, if the increase was caused by one of eight qualifying life-changing events: death of a spouse, marriage, divorce or annulment, work stoppage, work reduction, loss of income-producing property, loss of pension income, or an employer settlement payment. You file Form SSA-44 with the Social Security Administration. Appeals are not available for Roth conversions, capital gains, or required minimum distributions.

Do Roth conversions trigger IRMAA?

Yes. Roth conversion amounts are included in modified adjusted gross income in the year of the conversion and will affect your Medicare premiums two years later. You cannot appeal an IRMAA increase caused by a Roth conversion, which is why conversion amounts should be sized against IRMAA thresholds in advance.

Do withdrawals from a Roth IRA count toward IRMAA?

No. Qualified Roth IRA distributions are not included in modified adjusted gross income and do not affect IRMAA. This is one of the primary long-term benefits of building Roth assets before Medicare age.

Does tax-exempt municipal bond interest count toward IRMAA?

Yes. Tax-exempt interest is added back to adjusted gross income when calculating MAGI for IRMAA purposes, even though it is not subject to federal income tax.

Does selling my house trigger IRMAA?

It can. Gain above the primary residence exclusion of $250,000 for single filers or $500,000 for joint filers counts toward IRMAA MAGI. Sales of rental property or second homes receive no exclusion at all and the full gain, including depreciation recapture, counts.

Does IRMAA apply to Medicare Part A?

No. Medicare Part A is premium-free for most beneficiaries, and even those who must pay a Part A premium owe no income-related surcharge on it. IRMAA applies only to Part B and Part D.

If both spouses are on Medicare, do we each pay IRMAA?

Yes. IRMAA is assessed per beneficiary. A married couple where both spouses are enrolled in Medicare pays the surcharge twice, which doubles the annual cost of crossing any threshold.

How is Part D IRMAA billed?

The Part B surcharge is typically deducted from your Social Security benefit or included in your Medicare bill. The Part D surcharge is billed separately by Medicare and must be paid directly to Medicare, not to your drug plan carrier, even if an employer or retirement system pays your Part D plan premium.

What happens if I cross an IRMAA threshold by only a few dollars?

You pay the entire surcharge for that tier for the full year. IRMAA is a cliff, not a graduated bracket. Crossing the first threshold by one dollar costs a single filer $1,148.40 and a couple $2,296.80 in 2026.

Will IRMAA get more expensive in the future?

Thresholds adjust annually for inflation, except the top tier, which is frozen at $500,000 single and $750,000 joint. Separately, the Medicare Trustees project a significant increase in Part D surcharge multipliers beginning in 2030. Long-term Roth conversion plans should not assume today’s surcharge levels are permanent.

Do I need a financial advisor to manage IRMAA?

Not necessarily, but the calculation requires projecting all income sources with precision before December 31 of each year, and the cost of an error is measured in thousands of dollars per year per person. Most people who avoid IRMAA successfully do so because someone modeled it in advance.

Key Takeaways

• IRMAA is a Medicare surcharge, not a tax, applied to Part B and Part D premiums based on income from two years ago.
• 2026 thresholds begin at $109,000 single and $218,000 joint, based on 2024 MAGI.
• It is a cliff, not a bracket. One dollar over a threshold triggers the full tier surcharge for the entire year, per person.
• The costliest triggers are voluntary: Roth conversions, property sales, and business sales. Those are also the ones you cannot appeal.
• Appeals exist for involuntary income drops. Form SSA-44 covers retirement, work reduction, widowhood, divorce, and pension loss.
• IRMAA resets annually. A single high-income year costs you one year of surcharges, not a lifetime.
• Planning happens two years ahead. What you do in 2026 sets your 2028 premiums.

Get Your IRMAA Exposure Mapped Before December 31

The IRMAA planning window for any given year closes on December 31. After that, the tax year is locked, the return will be filed, and the surcharge two years out is already determined.

If you are within a few years of Medicare, already enrolled, considering a Roth conversion, planning to sell property, or facing your first required minimum distribution, this is worth an hour of your time now rather than a letter of regret in November.

Schedule your retirement clarity session

Or book a free consultation directly

We meet clients in person throughout Central Florida and virtually with clients nationwide. Plan. Protect. Prosper.

Roger Fishel Financial provides retirement income planning, annuity, Social Security, and Medicare planning guidance. This article is educational and is not tax, legal, or investment advice. IRMAA figures cited are from the Centers for Medicare and Medicaid Services 2026 premium fact sheet released November 14, 2025, and are subject to change. Projected figures for 2027 and beyond are estimates only. Individual results depend on your specific circumstances. Please consult a qualified tax professional regarding your personal tax situation. We are not connected with or endorsed by the United States government or the federal Medicare program.