On her January 2022 podcast episode 10 Changes That Are New in 2022, Suze Orman walked listeners through a Medicare quirk most retirees only discover after it has already cost them: “Your increase on your Medicare premiums, Part B depends on what your 2020 tax returns happen to be. Don’t ask me why they do it that way.”
Translation: the premium you pay this year was set by the tax return you filed almost two years ago. Social Security calls this the Income-Related Monthly Adjustment Amount, or IRMAA. Orman has mentioned on the podcast that she and her wife KT pay $526 a month each for Part B because their income crossed a threshold two years back.
I’ve been studying retirement tax planning for more than a decade, and IRMAA is one of the most consistently overlooked traps I see. The stakes are concrete. If you do a big Roth conversion in 2026, sell a rental property, take an unusually large required minimum distribution, or simply have one fat income year for any reason, your Medicare premium will jump in 2028. Most people never see it coming because they are looking at this year’s income, not the return they filed nearly two years ago.
The verdict: Orman is right, and the math is worse than it looks
The advice is accurate and the mechanic matters more than most retirees realize. Here is how it actually works.
On a separate podcast segment, Orman explained the rule more directly: “IRMAA is based on your modified adjusted gross income from two years prior. So they’re always looking back two years.” If you sold a piece of property in 2024, that income generally hits your 2026 Medicare premiums.
Take a concrete scenario. A 68-year-old retiree, married filing jointly, has a normal MAGI of $180,000. In 2026 he runs a $150,000 Roth conversion to drain a traditional IRA before RMDs get larger. His 2026 MAGI lands at $330,000.
In 2028, Social Security looks back at that 2026 return and surcharges both spouses. Using illustrative IRMAA bracket math (actual surcharge tiers shift each year and should be checked on Medicare.gov), a couple in that income band faces meaningful combined Part B and Part D surcharges per person per month. Across two spouses for twelve months, that one-year conversion can quietly cost thousands in extra Medicare premiums.
The conversion may still be worth doing. The forward tax savings on a $150,000 conversion at the 24% bracket can dwarf the IRMAA hit. The problem is that most retirees never model the 2028 premium when they decide whether to convert in 2026. They find out by letter from Social Security after the fact.
The variable that decides whether you can fight back
The single factor that determines whether you can undo an IRMAA spike is whether your income event qualifies as a “life-changing event” under Form SSA-44. Orman flagged the option on a caller segment: “You can request that Social Security adjust your IRMAA based on your current income, usually if there’s a significant reduction to a qualifying event.”
The qualifying list is narrow. It covers work stoppage, work reduction, marriage, divorce, death of a spouse, loss of pension income, an employer settlement payment, and a few disaster-related property losses. Retiring qualifies. A voluntary Roth conversion does not. Selling investment property for a profit generally does not, despite being a common income spike.
Two retirees can post identical $330,000 MAGI years and get opposite outcomes:
- Retiree A’s spike came from a final paycheck and severance the year she retired. She files SSA-44, attaches proof of work stoppage, and her IRMAA is recalculated using current income. Surcharge avoided.
- Retiree B’s spike came from a Roth conversion. No form he files will help. He pays the full surcharge for the full year.
What to do this week
- Pull your most recent tax return and find your MAGI. That number is setting your Medicare premium one to two years out, whether you remember filing it or not.
- If you are planning a Roth conversion, property sale, or large RMD this year, project your 2026 MAGI and check the current IRMAA brackets at Medicare.gov before pulling the trigger. Stopping a conversion $5,000 short of a bracket can save thousands.
- If you just retired or cut back work hours, download Form SSA-44 from SSA.gov and file it. Do not wait for Social Security to ask.
- If you are married, run the math per spouse. Each of you pays IRMAA separately, so a joint income spike doubles the bill.
The look-back is simply slow. Orman’s “don’t ask me why” line lands because the rule rewards retirees who plan two years ahead of the bill and punishes the ones who only find out about it two years after it arrives.
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