Medicare IRMAA: Why Your Income Is the One You Can Still Control

Medicare IRMAA is an income-based surcharge added to standard Part B and Part D premiums, and Social Security sets it using your tax return from two years earlier. That means your 2027 premium is already decided; it’s based on the 2025 return you filed this year. Nothing you do between now and December will move it.

What that same two-year rule means, though, is that 2028 is wide open. The income you take in 2026, right now, is the number Social Security will use to set that year’s premium. Below are the brackets for 2027 so you can see what’s coming, and then what’s actually still worth doing about the year you can control.

What Is IRMAA and How Is It Calculated?

IRMAA stands for Income-Related Monthly Adjustment Amount. It’s added to your Medicare Part B and Part D premiums once your Modified Adjusted Gross Income, your AGI plus any tax-exempt interest, crosses a threshold, using the return you filed two years before the coverage year.

It doesn’t work like an income tax bracket. Regular tax brackets only tax the dollars above each threshold. IRMAA taxes the whole thing. Cross a line by one dollar, and your entire premium jumps to the next tier, not just the marginal amount over it.

Where Do the Brackets Stand for 2026, and Where Is 2027 Headed?

The standard Part B premium for 2026 is $202.90 a month. IRMAA starts above $109,000 in MAGI for single filers and $218,000 for joint filers, based on 2024 tax returns.

For 2027, the Medicare Trustees project a standard premium near $209.50, with some private forecasts running a bit higher, into the $216–$219 range. Projected Medicare brackets for IRMAA 2027 start around $112,000 single and $224,000 joint. None of this is final; CMS won’t confirm the actual 2027 numbers until late in the year.

*Projected figures only. CMS confirms official 2027 brackets in late 2026.

Notice that the top bracket’s income cutoff, $500,000 single, $750,000 joint, doesn’t move between 2026 and 2027. Congress froze that threshold instead of indexing it like the rest, and the freeze runs through 2027. Beginning in 2028, it starts adjusting for inflation along with the other brackets, which matters if you’re planning this year’s income against that top tier.

Why Does Crossing a Threshold by One Dollar Cost Thousands?

Say a married couple’s joint MAGI lands at $224,001 instead of $223,999. Two dollars of difference, and both spouses, if both are on Medicare, jump into the next surcharge tier for the entire year, and not by two dollars’ worth. By the full tier. That’s not a rounding error; it’s the whole design of the bracket system, and it’s exactly why one uncoordinated year-end withdrawal can cost more than the tax it was meant to save.

Those particular numbers are the projected 2027 thresholds, and 2027 is already settled. But the mechanic is the point, and the mechanic is what you’re managing against right now for 2028. Those brackets will sit a little higher than the ones above, and CMS won’t publish them until late 2027, so the practical move is to plan against the most recent confirmed numbers and deliberately leave yourself margin rather than aiming at a line nobody has drawn yet.

What Raises Your MAGI Without You Noticing?

A few income events catch retirees off guard every year, mostly because none of them show up on a W-2 the way a paycheck does:

• Required minimum distributions. Mandatory withdrawals from a traditional IRA or 401(k) are treated as ordinary income as soon as you receive them. Planning RMD tax strategies before the distribution happens, not after, is the difference between managing the bracket and reacting to it.
• Roth conversions. Converting a traditional IRA to a Roth is a taxable event in the year of the conversion, even though all future withdrawals from the Roth will be tax-free.
• Capital gains and asset sales. Selling real estate or a concentrated stock position can push MAGI up in a single year, even when the underlying gain built up over decades.
• Inherited IRA distributions. Non-spouse beneficiaries working through the 10-year rule often see a sharp, one-time spike the year they take a larger distribution.
• Deferred compensation and first-year Social Security. Executive payout plans and the first year of claiming Social Security both add income in ways that are easy to forget when estimating MAGI.

Why Is the Year You Retire the Worst Year for IRMAA?

New Medicare enrollees at 65 get their first premium based on the tax return from age 63, often still a peak-earning year. That means the first IRMAA notice many new retirees receive reflects a salary they no longer have.

If that’s your situation, you can appeal. Form SSA-44 lets you ask Social Security to recalculate your premium based on a qualifying life-changing event:

• Work reduction or full retirement 
• Marriage, divorce, or annulment 
• Death of a spouse 
• Loss of income-producing property 
• Loss or reduction of pension income 
• A settlement payment from a former or current employer

How to Manage Your 2026 Income Before December 31

This is the part that’s still in your control, and everything below moves your 2028 premium, not the 2027 numbers in the table above. A few levers, in the order most people reach for them:

1. Fill the bracket deliberately, not accidentally. If you’re close to a threshold, model a Roth conversion that gets you right up to the line rather than avoiding conversions altogether.
2. Use qualified charitable distributions. At 70½ or older, you can send up to $111,000 per person directly from an IRA to a qualified charity in 2026. It counts toward your RMD and never touches your MAGI.
3. Harvest capital losses in taxable accounts to offset gains you’ve already realized this year.
4. Coordinate where the money comes from. Balancing withdrawals across taxable, tax-deferred, and Roth accounts is what keeps MAGI level year to year instead of spiking in the years you need more cash.

Coordinate Your 2026 Income Before It’s Locked In

Your 2027 premium is settled. Your 2028 premium is being decided right now, in every withdrawal, conversion, and asset sale between today and December 31, and most of those decisions get made without anyone checking what they do to a Medicare bracket two years out. Peak American Investment Advisors coordinates RMD tax strategies, Roth conversions, and retirement income planning as one plan, not separate decisions made by different people. This is what tax-efficient retirement planning looks like when Medicare premiums are treated as part of the tax picture from the start, not an afterthought discovered in a premium notice. If you’re comparing options for a retirement planner near you, explore our retirement tax strategies or request an appointment with our team today.

Frequently Asked Questions

What income counts toward the Medicare IRMAA calculation?

Modified Adjusted Gross Income, your AGI from your federal return, plus any tax-exempt interest.

Can I appeal a Medicare IRMAA surcharge?

Yes, using Form SSA-44, if you can show a qualifying life-changing event, retirement, marriage, divorce, or the loss of pension income, among others, reduced your income after the year Medicare used to set the surcharge.

Do Roth IRA withdrawals increase my IRMAA surcharge?

No. Qualified Roth withdrawals aren’t part of your AGI or your tax-exempt interest, so they never touch your MAGI or your IRMAA bracket.