IRMAA: The Medicare Surprise That Catches Retirees Off Guard
A quiet surcharge that surprises a lot of retirees.
Most people expect Medicare to lower their costs in retirement. So it comes as a genuine surprise when a letter arrives explaining that their premiums are going up — not because anything changed with their health, but because of their income two years ago.
That surcharge has a name: IRMAA, the Income-Related Monthly Adjustment Amount. It’s one of the most overlooked items on the Retirement Red Zone Checklist, and one of the easiest to walk into by accident.
What IRMAA actually is
Medicare Part B and Part D have standard premiums. But if your income is above certain thresholds, you pay a surcharge on top of those standard premiums. The more income above the threshold, the larger the surcharge.
The catch that surprises people is the two-year lookback: your premiums in a given year are based on your tax return from two years earlier. So a high-income year in, say, 2026 can raise your Medicare premiums in 2028 — long after you’ve forgotten about it.
What can trigger it
IRMAA is triggered by your income crossing a threshold, and a number of ordinary retirement moves can push you there. From the checklist, the usual suspects include:
Roth conversions — a large conversion adds to your income for the year.
Large IRA or 401(k) withdrawals.
Capital gains — including from selling investments or property.
Business-sale proceeds — a one-time spike from an exit.
Required Minimum Distributions (RMDs) once they begin.
Any one-time income spike — even a good financial event can nudge you over.
Notice the pattern: several of these are smart financial moves. That’s what makes IRMAA tricky — a sensible decision in isolation can create an unintended cost somewhere else.
Why this isn’t a reason to avoid good planning
Here’s the important part: IRMAA is not a reason to avoid Roth conversions, or to never sell appreciated stock, or to fear RMDs. Sometimes crossing an IRMAA threshold is still the right call — the long-term benefit outweighs a year or two of higher premiums.
The goal isn’t to avoid IRMAA at all costs. It’s to know it’s coming and decide on purpose. Could a smart tax move create an unexpected Medicare premium increase? Sometimes the answer is still yes — but you want to know before it happens, not after.
How coordinated planning helps
Because IRMAA is income-based and works on a two-year delay, it rewards looking ahead. A coordinated plan can:
Project your income across the years around Medicare enrollment, so thresholds are visible in advance.
Size Roth conversions deliberately, filling a bracket without unnecessarily blowing past an IRMAA tier.
Time large withdrawals or sales where there’s flexibility to do so.
Coordinate with your CPA so the tax return that drives IRMAA doesn’t hold surprises.
None of this requires perfect prediction. It just requires looking at the whole picture — income, taxes, and Medicare together — instead of one decision at a time.
A good place to start
If you’re within a few years of Medicare, or planning a Roth conversion or a business sale, IRMAA belongs on your radar. The Retirement Red Zone Checklist walks through it alongside 19 other areas worth reviewing before you retire. And if you’d like help projecting where you stand, we’re glad to be a second set of eyes.
Nicholas St. George is a Registered Representative with, and securities and advisory services offered through, LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC. This material is for general educational purposes only and is not individualized tax, legal, or investment advice; please consult a qualified professional regarding your individual situation. Investing involves risk including possible loss of principal.
