The Hidden Medicare Surcharge That Hits Retirees With Over $109,000 in Income

Many seniors who are 65 and over rely on Medicare for their healthcare coverage, and with good reason. Medicare is available regardless of your health status, covers a broad array of services typically without requiring pre-approval, and usually comes with affordable premiums.

The keyword, though, is usually.

Medicare Part B premiums for most seniors come in at $202.90 per month in 2026, up $17.90 from $185.00 in 2025. But a meaningful share of retirees will find themselves hit with an unexpected surcharge that can seriously strain their retirement budgets. Here is why it happens and what you can do about it.

If your income is $109,000 or higher, you could face a surprise Medicare hit

The surcharge in question comes from something called the Income-Related Monthly Adjustment Amount, or IRMAA. Once your income crosses a specific threshold, IRMAA causes both your Medicare Part B and Medicare Part D premiums to increase substantially. That threshold is $109,000 for single tax filers and $218,000 for married joint filers in 2026, up from $106,000 and $212,000 respectively in 2025.

Critically, it is not your current income that triggers the surcharge. The Social Security Administration (SSA) determines IRMAA using your Modified Adjusted Gross Income (MAGI) from two years earlier, pulling that data directly from your IRS tax return. So if your MAGI in 2024 exceeded those thresholds, you will face higher Medicare premiums in 2026. For retirees who had an unusually high-income year due to capital gains from selling appreciated investments, a large IRA withdrawal, or even a Roth conversion, this two-year lookback can feel like a ticking time bomb that detonates years after the fact.

IRMAA is also what experts call a “cliff” surcharge. Earning just one dollar over a bracket threshold triggers the full surcharge for that entire tier, not just the amount above the cutoff. That means a single retiree with $109,001 in 2024 MAGI pays the same higher premium as someone who earned $136,999, even though their incomes are nearly $28,000 apart.

How much higher will your Medicare premiums go?

The premium increases that result from crossing IRMAA thresholds can be dramatic. The table below shows how much you can expect to pay in monthly Part B premiums based on your MAGI and the corresponding Income-Related Monthly Adjustment amount:

At the highest tier, a single retiree pays $487 extra per month for Part B alone, bringing their total Part B premium to $689.90. And IRMAA does not stop at Part B. The same thresholds apply to Medicare Part D prescription drug coverage, where surcharges add another $14.50 to $91.00 per month on top of your plan premium. A top-tier beneficiary who has both Part B and Part D exposure could owe nearly $6,936 in additional annual premiums because of a single high-income year.

While the surcharge affects a minority of Medicare enrollees (about 7% to 8% of all beneficiaries, or roughly 5.1 million people in the most recent year reported by the Medicare Trustees), the dollar impact on those who are caught by it is substantial. Retirees with persistently high income face IRMAA every year they remain on Medicare.

What can you do about the IRMAA adjustments?

The most effective strategy is to plan ahead, well before you turn 65. Saving for retirement in a Roth IRA or Roth 401(k) rather than a traditional pre-tax account keeps future withdrawals out of your MAGI calculation, which is one of the most powerful tools available for staying below IRMAA thresholds. Being deliberate about when you sell appreciated assets, the timing of large IRA withdrawals, or the size of any Roth conversions can also keep a single year’s income from triggering surcharges two years down the road.

If your income has already dropped significantly because of a qualifying life-changing event, such as retirement, the death of a spouse, or a divorce, you do not have to wait for the two-year lookback to catch up. The SSA allows beneficiaries to appeal their IRMAA determination by filing Form SSA-44, the Medicare Income-Related Monthly Adjustment Amount Life-Changing Event form. A successful appeal prompts the SSA to recalculate your premiums using more recent income data, which can eliminate or significantly reduce the surcharge immediately rather than two years later.

For situations that do not involve a qualifying life-changing event, a financial advisor who specializes in retirement income planning can help you build a long-term strategy to manage your MAGI across multiple years, so that you keep more of your savings instead of sending extra money to Medicare each month.

Editor’s note: This article was updated to reflect the $17.90 increase in the 2026 standard Part B premium from $185.00 in 2025, the rise in the IRMAA threshold from $106,000 (single) and $212,000 (joint) in 2025 to $109,000 and $218,000 respectively, the addition of Part D surcharges ($14.50 to $91.00/month) that IRMAA also triggers, enrollment data showing roughly 5.1 million beneficiaries paid IRMAA surcharges, the cliff-surcharge mechanics, and the SSA Form SSA-44 appeal option for qualifying life-changing events.

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