What Is IRMAA?
The Medicare Surcharge That Catches High-Income Retirees Off Guard
Picture this. You have just gotten back from two weeks in Hawaii, golfing with friends. Sunshine, good company, some of the best courses you have ever played, the kind of trip you spend a career working toward.
When you get home, there is the usual mountain of mail waiting, the stack that always piles up when you have been gone a while. You work your way through it, and partway down the pile you find an envelope from the Social Security Administration. For a second you get a little excited. This is it, you think. My benefit details. The reward for all those years of hard work, all those years of paying into Medicare, finally spelled out in black and white.
You open it. It is not a thank-you note. It is a notice telling you your Medicare premiums are going up by hundreds of dollars a month, because of something called IRMAA.
That envelope is how a lot of high earners meet IRMAA, expecting good news and instead getting a bill they never saw coming, with no idea what they did to deserve it. It is the Medicare surcharge nobody warned them about.
At Treveri Capital we see this constantly. IRMAA is one of the most overlooked costs in retirement, and because of how it is calculated, by the time you feel it, the decision that caused it is already two years in the past. The good news is that it is highly plannable once you understand how it works. Here is the overview, and it is the subject of a book we just published.
What IRMAA actually is
IRMAA stands for Income-Related Monthly Adjustment Amount. It is a surcharge added on top of your standard Medicare Part B and Part D premiums when your income climbs above certain thresholds. The higher your income, the larger the surcharge.
In 2026, the standard Part B premium is $202.90 a month. If your income is above the threshold, IRMAA adds an extra amount on top, and in the highest tier the Part B surcharge alone reaches $487.00 a month, per person. There is a separate IRMAA surcharge on your Part D prescription drug coverage as well. So a high-income married couple can see their combined Medicare costs rise by many thousands of dollars a year, simply because of where their income landed.
The thresholds, and the cliff that makes IRMAA sting
For 2026, IRMAA starts when your modified adjusted gross income (MAGI) exceeds $109,000 for a single filer or $218,000 for a married couple filing jointly. Cross that line and you move into the first surcharge tier. Keep climbing and you move into higher tiers, each one adding more.
Here is the part that surprises people most. IRMAA is a cliff, not a gentle slope. Go one dollar over a threshold and you owe the entire surcharge for that whole tier, not a little more for the one extra dollar. A small, avoidable bump in income, a Roth conversion that was slightly too large, a capital gain you could have spread across two years, can cost you a full tier. For a couple, remember, both spouses pay, so every surcharge effectively doubles.
Why it catches people two years late
IRMAA runs on a two-year lookback. Your 2026 premiums are based on the income reported on your 2024 tax return. So the surcharge you are paying today was set in motion by decisions you made two years ago, often before Medicare was even on your radar.
That delay is exactly why IRMAA is so easy to trip and so hard to undo after the fact. By the time the letter arrives, you cannot go back and change the income that caused it. But if you plan ahead, in the years before and during that lookback window, you have real control over where your income lands.
One more detail that trips people up: MAGI for IRMAA is not just your taxable income. It is your adjusted gross income plus any tax-exempt interest, which is why even “tax-free” muni bond interest can count against you here.
The good news: IRMAA is plannable
This is the part we want high earners to hear. IRMAA is not random, and it is not a tax you simply have to accept. Because it is driven by your income in specific years, the levers are in your hands. The planning playbook includes things like:
Managing the timing and size of Roth conversions so they fill a tier without spilling into the next one
Spreading capital gains, home sales, and other one-time events across tax years
Using qualified charitable distributions to satisfy required minimum distributions without raising MAGI
Coordinating which accounts you draw from, and when
In some cases, raising cash by borrowing against a portfolio rather than selling, so you avoid a taxable event that would spike MAGI
There is also an appeals process. If your income dropped because of a specific life-changing event, retirement, the death of a spouse, and several others, you can ask Social Security to use your more recent, lower income instead, using Form SSA-44.
Each of these has rules and tradeoffs, which is the whole reason planning matters. Done well, the savings over a retirement can be substantial. Done carelessly, or not at all, IRMAA quietly drains thousands of dollars a year you never needed to pay.
We wrote the book on it
Because IRMAA is so misunderstood and so plannable, we put the entire playbook into a book: “The IRMAA Handbook: How High-Income Retirees Cut the Medicare Surcharge,” by Jeff Martinez, CRPC. It walks through the thresholds, the traps, the planning strategies, the appeal process, and the special cases like the married-filing-separately penalty and the widow’s bracket squeeze, in plain language, with the specifics high earners actually need.
Where a fiduciary comes in
IRMAA does not live in a vacuum. It connects to your tax plan, your withdrawal strategy, your charitable giving, and your estate plan, and the right move in one area can create a problem in another. As a fiduciary at Treveri Capital, our job is to look at the whole picture, plan your income years in advance so you do not stumble over a threshold by accident, and coordinate with your CPA and estate attorney so the pieces fit together.
If you are approaching Medicare, or already on it and tired of paying more than you should, that is exactly the kind of planning we do. We would be glad to look at your situation and show you where the thresholds fall for you.
Want the cash-flow angle? If you need liquidity but worry that selling will spike your income and your IRMAA, see our companion article on borrowing against your portfolio to avoid the IRMAA surcharge.
Jeff Martinez, CRPC, is a fiduciary financial advisor at Treveri Capital, focused on retirement income and Medicare planning for high-income households, and the author of “The IRMAA Handbook.” Reach us at jeff@trevericapital.com or 213-537-8971, or visit trevericapital.com.
This article is for informational purposes only and is not investment, tax, or legal advice. IRMAA thresholds and premium amounts are set by the federal government and change annually. Consult your advisor and tax professional before acting.
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