High Earning Retirees Are Being Warned About This $9,600 Medicare Surcharge That Hits Two Years After a Big Income Event

On the September 15, 2022 episode of Ask Suze & KT Anything, Suze Orman pulled back the curtain on something most retirees never see coming until it hits their own bank account. She was talking about her wife KT’s Social Security deposit, and the number she described should make every high earner approaching 65 pay attention.

Here is what Suze said: “That’s why I was just showing KT the other day that she got a Social Security check, right, put into her account and they had to subtract 560, I think almost $600 for her Medicare B part of it. So the more money you make, the more you have to pay.”

That number is real. It reflects IRMAA, the Income Related Monthly Adjustment Amount, and if your income crosses certain thresholds in retirement, it can quietly carve hundreds of dollars off every Social Security check you receive.

What IRMAA Actually Does to Your Check

IRMAA is a premium add-on the government withholds directly from your Social Security deposit before the money ever lands in your account, rather than a tax you file.

Every Medicare beneficiary pays a standard Part B premium. Suze mentioned she and KT pay roughly $526 a month out of their Social Security checks for Medicare Part B. For someone on the standard premium with no IRMAA, the number is much lower. The gap between those two figures is the IRMAA surcharge, and it scales up in tiers as income rises.

The mechanic that makes IRMAA dangerous is the lookback. As Suze explained on the show, IRMAA is based on your modified adjusted gross income from two years prior. Your 2026 Medicare premium is determined by what you reported on your 2024 tax return. A one-time event in 2024, selling a rental property, exercising stock options, or doing a large Roth conversion, can spike your premium two years later, long after the cash from that transaction has been spent or reinvested.

The Math on a Realistic Scenario

Consider a couple who sells a rental property in 2024 and recognizes $200,000 in capital gains on top of their normal $120,000 retirement income. Their modified adjusted gross income jumps to $320,000 for that single year. In 2026, when Medicare looks back at that 2024 return, both spouses get pushed into a higher IRMAA tier.

If each spouse’s Part B premium climbs by roughly $400 a month because of the surcharge, that is $800 a month between them, or about $9,600 over the full year. They earned the gain in 2024, paid capital gains taxes on it in April 2025, and then in 2026 watched another five-figure bite come out of their Social Security checks for a property they no longer own. That is the IRMAA cliff effect, and it is exactly what blindsides high earners.

The same trap snaps shut on retirees who do aggressive Roth conversions in their 60s, take a big required minimum distribution, or sell a business. The income event is finite. The IRMAA bill arrives two years later as if the income were permanent.

The Variable That Decides Whether IRMAA Is Permanent

The factor that changes everything is whether your high-income year is a one-time event or your steady state. If you are a retiree pulling $400,000 a year from a portfolio and that is your normal income, IRMAA is a permanent feature of your Medicare costs and you should plan around it. If your high-income year came from a property sale, an inheritance event, or a Roth conversion, you have a way out.

Suze pointed to the fix on the same episode: Form SSA-44. If you have what Social Security calls a life-changing event, you can request that your IRMAA determination be adjusted based on your current income rather than the two-year-old number. Qualifying events include retirement itself, the death of a spouse, divorce, and loss of pension income. The sale of a property by itself does not automatically qualify, but retirement triggered by that sale often does.

What to Do Before Your Next High-Income Year

Run the math before you pull the trigger on any large income event in your 60s or later:

1. Pull the current IRMAA bracket chart from Medicare.gov and find where your projected modified adjusted gross income lands two years out. The difference between the top of one bracket and the bottom of the next can be a few thousand dollars of income that triggers thousands in surcharges.
2. If you have a one-time income event coming, ask whether you can split it across two tax years to keep each year under the next IRMAA threshold.
3. If a life-changing event has already happened, download Form SSA-44 from the Social Security website and file it. Do not wait for Medicare to figure it out on its own.

Suze’s comment about KT’s check is the clearest warning a high-earning retiree will ever get: the bigger your income, the smaller your Social Security deposit, and the lag between the two makes the bill feel like it came out of nowhere. It came from a tax return you filed two years ago.