Medicare can charge higher Part B and Part D premiums when your income is above certain limits. Those higher premiums are called IRMAA (Income-Related Monthly Adjustment Amount). The catch is timing: IRMAA is usually based on your tax return from two years earlier. So a bump in part-time income or a big IRA withdrawal this year can raise your Medicare costs two years from now.
Key Takeaways
- IRMAA for a given year is generally based on your MAGI from two years before.
- Going even $1 over a threshold can push you into a higher tier for the year.
- The best way to avoid surprises is to coordinate part-time income, IRA withdrawals, Roth conversions, and capital gains so you do not create avoidable premium spikes.
What IRMAA is and what triggers it
IRMAA is an income-based surcharge that can be added to:
- Medicare Part B (medical insurance), and
- Medicare Part D (prescription drug coverage)
It is not a permanent tax. It is reviewed each year, based on your income, and it can change from year to year.
What income Medicare looks at
For IRMAA, Social Security uses a version of income called MAGI, which is basically:
- your Adjusted Gross Income (AGI), plus
- tax-exempt interest (often municipal bond interest)
That means you can cross an IRMAA threshold even if part of the income involved is “tax-free” interest.
2026 IRMAA thresholds and why they matter
In 2026, most people pay the standard Part B premium. IRMAA starts once your 2024 MAGI goes over the first threshold. The first tier begins above:
- $109,000 for single filers
- $218,000 for married couples filing jointly
Part D has IRMAA tiers too, and those charges are added on top of your Part D plan premium.
The main point is this: 2026 premiums are generally based on your 2024 tax return.
Income events that often surprise semi-retirees
Part-time work is only one way people accidentally trigger IRMAA. Many “one-time” moves can raise MAGI quickly.
Part-time or consulting income
A short contract or a strong consulting year can be enough to bump you into the next tier, especially if you were already close to the line.
Extra IRA withdrawals
Large withdrawals for a remodel, a car purchase, debt payoff, or a big travel year can raise MAGI fast.
Roth conversions
Roth conversions count as taxable income. Even if the strategy makes sense long-term, the conversion year can push you into an IRMAA tier.
Capital gains
Selling appreciated investments or real estate can create a sudden income spike.
Tax-exempt interest
Municipal bond interest is often tax-exempt for income tax purposes, but it is still included in MAGI for IRMAA.
Planning moves that can reduce IRMAA surprises
Most IRMAA planning comes down to one idea: smooth your income instead of stacking it all into one year.
1) Spread income across tax years when possible
If you need a large amount of cash, it may help to split it over two years, depending on your baseline income and deductions.
Example: taking part of a withdrawal late in one year and part early in the next year. This is not always the best move, but it is often worth modeling.
2) Coordinate work income with withdrawals
If a year is already high because you are working part-time, you may be able to reduce IRA withdrawals or delay discretionary sales so total MAGI stays steadier.
3) Size Roth conversions with IRMAA in mind
Roth conversions can be powerful, but the amount matters. If you are near an IRMAA threshold, the conversion should usually be planned to avoid stepping into a higher tier without a clear reason.
4) Think two years ahead
A simple habit helps a lot: treat IRMAA as a two-years-forward planning problem.
If you make an income decision in 2026, ask what it might do to your Medicare premiums in 2028.
5) Know you may be able to appeal after certain life changes
If IRMAA is based on older income that no longer reflects your current situation, Social Security allows an appeal process for certain qualifying life-changing events using Form SSA-44.
FAQs
Medicare looks at your MAGI, which is generally your AGI plus tax-exempt interest.
Usually a two-year lookback. For example, 2026 premiums are generally based on 2024 income.
Yes. Roth conversions increase taxable income and can push MAGI into a higher IRMAA tier.
Start with your most recent tax return, estimate your MAGI, and compare it to the published IRMAA brackets for the Medicare year you are planning for.
Want to avoid surprise Medicare premium jumps?
If you are earning part-time income, doing Roth conversions, or planning larger withdrawals, it helps to build a simple two-year-forward income map so IRMAA does not sneak up on you. Schedule a complimentary consultation with one of our CFP® professionals at Bauman Wealth Advisors to coordinate your income, withdrawals, and tax strategy so your Medicare costs stay as predictable as possible.
