The Medicare Surcharge Suze Orman Says Most Home Sellers Don’t Find Out About Until It’s Too Late

On a recent highlights replay of Ask KT & Suze Anything, Suze Orman brought Pat’s question back into the spotlight for anyone with a significant real estate sale on the horizon. Pat and her husband are selling a rental property and have already accepted the capital gains hit. Their real question is narrower: “do I have to wait for the two year look back with Medicare to charge the IRMAA fees?”

If you are within a few years of 65 and sitting on a property, a concentrated stock position, or an inherited IRA you plan to liquidate, this question determines whether your Medicare bill spikes for one year or two. Suze’s answer is short. The math behind it is layered.

What IRMAA actually is, and why Pat is right to worry

IRMAA stands for Income Related Monthly Adjustment Amount. It is the surcharge Medicare adds to your Part B (and Part D) premium once your income crosses certain thresholds. For 2026, those thresholds begin at $109,000 for single filers and $218,000 for married couples filing jointly. The standard Part B premium this year is $202.90 per month, a figure that itself rose about $18 from 2025’s standard. Once IRMAA kicks in, total Part B costs range from $284.10 all the way to $689.90 per month, depending on which income tier applies. Part D carries its own IRMAA layer on top, adding between $14.50 and $91.00 per month.

Suze put the high end in plain terms on the show: “I think we pay 526 a month KT out of our Social Security check for Medicare part B.” That figure, while not the maximum, illustrates what a high-income household already faces before a one-time gain ever enters the picture.

The trap is the look-back. As Suze explained on the episode, “IRMAA is based on your modified adjusted gross income from two years prior.” Sell a rental in 2024, and Social Security uses that 2024 return to set your 2026 premium. A retiree living on a modest pension can still receive a surcharge notice because of a transaction from two tax years ago. The structure feels punishing precisely because the income that triggered it is long gone by the time the bill arrives.

The verdict: Suze is right, and most sellers miss step two

The look-back is real, and it is the piece most CPAs do not volunteer. A property sale generally lands on your Medicare premium two years after closing. But Pat does not have to passively absorb a multi-year IRMAA hit when the underlying gain was a one-time event.

Consider a realistic scenario. A couple, both 67, normally reports MAGI around $180,000. They sell a rental in 2024 and book a $400,000 long-term gain, pushing 2024 MAGI to roughly $580,000. Two years later, Social Security pulls that 2024 return and places them in a top IRMAA tier. Their Part B premium climbs well above the standard $202.90, potentially reaching Suze’s $526-a-month range or higher, per spouse. Across two people and twelve months, the added cost runs into thousands of dollars for the year, on top of the capital gains tax already paid. For many retirees, that premium increase wipes out a full year of Social Security cost-of-living adjustments for both spouses.

There is also the cliff problem. IRMAA does not work like a graduated tax rate. Crossing a threshold by even $1 triggers the full surcharge for that entire tier, not just on the amount above the line. The 2026 Tier 1 surcharge alone adds roughly $1,148 per person per year. The top tier can add approximately $6,936 per person per year. That asymmetry makes precision planning around the sale year’s MAGI especially valuable.

Here is what Pat asked about directly. The gain is a one-off. In 2025, the couple’s income drops back to $180,000. Under the default process, Social Security still bills them at the inflated 2026 rate because the 2024 return is what Medicare reads. Their premium normalizes in 2027, once the 2025 income flows through to the agency. One hard year, not two. But that outcome requires the household to take action.

The form Suze name-checked: SSA-44

Suze’s actual fix is Form SSA-44, the life-changing event request. The details here matter enormously, because the SSA’s definition of a qualifying event is narrower than most people assume.

Under 20 CFR 418.1205, eight events qualify: marriage, divorce or annulment, death of a spouse, work stoppage, work reduction, loss of income-producing property, loss of pension income, and employer settlement payments. The list is closed.

The “loss of income-producing property” category sounds as though it might cover a rental sale, but the SSA is explicit on this point: the provision applies only to involuntary losses. That includes property destroyed in a presidentially declared disaster, lost to arson or theft, or lost to fraud. A voluntary sale of an appreciated rental at the owner’s direction does not qualify, regardless of how sharply it inflated MAGI. In fact, financial advisors and SSA guidance confirm that a one-time capital gain from a voluntary real estate sale is among the events that typically cannot be appealed away through SSA-44.

So Suze’s broader suggestion that “the sale of a property qualifies for that” deserves a firm caveat. If the sale coincides with retiring or reducing work hours, SSA-44 is precisely your form, because that work stoppage or work reduction is its own qualifying event. If no qualifying event accompanies the sale, the surcharge generally stands. Call the Social Security office, document any income change, and verify your situation before assuming relief is available.

The variable that flips the math: is the income recurring?

The single factor that determines whether you fight IRMAA or simply budget for it is whether the income repeats. A rental sale is one year of pain. A pension that just started paying, a Roth conversion spread across multiple years, or a multi-year installment sale stretches the surcharge across consecutive premium years. In some cases, stacking Roth conversions into a single tax year costs less overall than spreading them across three, because one IRMAA hit replaces three consecutive ones. The cliff structure cuts both ways: concentrated income in one year can be cheaper than the same total income distributed across multiple years of surcharges.

One forward-looking point worth noting: the two-year lookback runs in all directions. Income decisions made in 2026 will set 2028 IRMAA. Anyone who sold a property, converted a large IRA balance, or received a one-time distribution this year should model the 2028 impact now, while there is still time to adjust. CMS will not publish the official 2027 brackets until November 2026, but projections based on current CPI data place the first 2027 threshold around $112,000 for single filers, up slightly from $109,000 in 2026.

What to do before you sign the closing papers

1. Pull the current IRMAA brackets from Medicare.gov and model where your sale-year MAGI lands, paying particular attention to the cliff thresholds at each tier boundary.
2. Ask your CPA whether installment sale treatment or a 1031 exchange fits your situation.
3. If the sale coincides with retiring or cutting hours, download SSA-44 now and gather proof of the work change, because that event qualifies even when the sale itself does not.
4. Budget the surcharge into your net proceeds as a real cost of the transaction, not a surprise to absorb later.

Suze re-aired Pat’s question because most sellers first learn about IRMAA from the premium notice itself, by which point the triggering income is already two tax years in the past. Run the two-year math before you sign the closing documents, and the surcharge becomes a line item instead of an ambush.

Editor’s note: This pass added context on the 2025-to-2026 Part B premium increase of approximately $18, noted that CMS projects the 2027 first IRMAA threshold near $112,000 for single filers (up from $109,000 in 2026), and incorporated current guidance confirming that voluntary real estate sales do not qualify for SSA-44 relief under the “loss of income-producing property” category.

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