Wes Moss Says One Dollar Over the Wrong IRMAA Threshold Can Cost a Retiree Up to $4,000 a Year and Most Advisors Never Mention It

Wes Moss told Clark Howard listeners something most retirees never hear from their insurance broker or their financial advisor: “IRMAA is paying for health care, but also goes back to taxes. So that’s a tax planning thought.” He said it on the January 6, 2026 “Ask An Advisor With Wes Moss” episode of The Clark Howard Podcast, and he is right in a way that has real dollars attached.

I’ve been watching IRMAA quietly drain retiree budgets for years, and the stakes for the typical retiree are simple. Cross an IRMAA income threshold by a single dollar and your Medicare Part B and Part D premiums jump for an entire year. The surcharge can run into thousands of dollars per couple, per year. Nobody bills you for it in advance. It just shows up as a deduction on your Social Security statement.

Why Moss is right: IRMAA is a cliff, not a slope

IRMAA, the Income-Related Monthly Adjustment Amount, is a surcharge added to Medicare Part B and Part D premiums for higher-income retirees. The Social Security Administration uses your modified adjusted gross income (MAGI) from two years prior to assign your bracket. Your 2026 premium is based on your 2024 tax return, which is why decisions you make today reach forward into bills that arrive long after you have forgotten them.

Here is the mechanic most people miss. Ordinary federal income tax brackets are marginal. Earn one more dollar at the edge of the 24% bracket and you pay 24 cents on that dollar. IRMAA works the opposite way. One dollar past the next threshold and the full surcharge tier applies to the whole year. Depending on which tier you cross, that can mean roughly $850 to $4,000 of additional Medicare premiums per person, per year (illustrative figures; check current brackets at Medicare.gov).

Walk through a realistic scenario I see all the time. A 70-year-old couple has a $1.2 million traditional IRA, $40,000 in combined Social Security, and a small pension. In December they take a $90,000 IRA withdrawal to fund a kitchen remodel. Layered on the Social Security and pension, that withdrawal pushes their MAGI past the next IRMAA threshold by about $3,000. Two years later, their Medicare premiums climb for the full calendar year. The remodel effectively cost them an extra Medicare bill nobody at the bank flagged, because their insurance agent never looks at tax returns and their advisor never quotes Medicare premiums.

The decision that triggers the surcharge happens inside the brokerage account, two years before the bill arrives at the insurance window.

The variable that flips the math: account type

The single factor that decides whether IRMAA hits is the tax character of the account the money comes from. The same $90,000 spending need produces three completely different MAGI outcomes:

1. Pulled from a traditional IRA or 401(k): counts as ordinary income, fully visible to IRMAA.
2. Pulled from a Roth IRA: does not feed into MAGI at all, invisible to IRMAA.
3. Pulled from a taxable brokerage account: only the realized capital gain counts, often a small fraction of the dollars withdrawn.

A retiree with a mix of account types has a steering wheel. A retiree with everything in a traditional IRA has a brick on the gas pedal. That is why Moss and the Clark Howard team keep circling back to Roth conversions executed in the early 60s, before the income shows up in the two-year lookback that drives the first Medicare premium at 65.

The flip side matters too. Aggressive Roth conversions can themselves trip an IRMAA bracket if you convert too much in a single year. Spreading conversions across multiple tax years and stopping just below each threshold is the whole game.

What to do before December 31

1. Pull your most recent tax return, find the MAGI line, and compare it to the current IRMAA bracket table at Medicare.gov. You cannot plan around a line you have not located.
2. If you sit within $10,000 of the next bracket, model whether a year-end IRA withdrawal, capital gain, or Roth conversion will push you over. If it will, split it across two tax years.
3. If a one-time event (home sale, inheritance, large gain) inflated your income two years ago, file Form SSA-44 to request a recalculation based on your current lower income. The form exists because Social Security knows life-changing events happen.
4. Put your financial advisor and your Medicare advisor in the same conversation with the same tax return in front of them. If they will not coordinate, you are the coordinator by default.

My takeaway: treat every December withdrawal, every Roth conversion, and every realized gain as a Medicare premium decision two years out. Put SSA-44 on the shelf next to your tax software, and run the IRMAA math before you press the trade button — not after the surcharge shows up in your Social Security deposit.