A married couple, ages 73 and 71, sitting on $1.8 million in a traditional 401(k). Social Security and a modest pension bring in about $80,000. The required minimum distribution this year adds roughly $68,000.
Their modified adjusted gross income lands at $274,500. They just clipped the second IRMAA threshold by $500. The cost is about $3,500 in extra Medicare premiums next year, and not one dollar of it shows up on a tax return.
How the cliff actually works
The IRMAA structure is a step function with sharp jumps at fixed income lines. In 2026, a married couple with MAGI at or below $218,000 pays the standard Part B premium of $202.90 per person with no Part D surcharge.
Slip into the $218,001 to $274,000 band, and the Part B premium becomes $284.10 with a $14.50 Part D add-on. Cross into the next band of $274,001 to $342,000, and Part B jumps to $405.80 with a $37.50 Part D surcharge.
For one spouse, the marginal cost of breaching that second threshold is $144.70 per month. For two, it works out to $289.40 per month, or about $3,500 a year. A few hundred dollars of RMD overshoot triggers it.
The two-year lookback hides the damage
Medicare uses your tax return from two years ago to set today’s premium. Your 2026 IRMAA reflects 2024 income. Your 2027 IRMAA will reflect 2026 income, so the RMD you take this December decides what Social Security deducts from your check 18 months later.
The withdrawal feels routine because the income tax hit lands in April. The Medicare hit lands a year and a half later, and most retirees never connect the two.
Suze Orman has put it bluntly: “Money that you withdraw from a traditional IRA or a traditional 401K… is used to calculate what your Medicare B premiums are going to be, and they will be higher because of that. Money that’s withdrawn from a Roth does not count.”
Inflation is widening the trap
Healthcare services spending climbed from $3.43 trillion in January 2025 to $3.70 trillion by April 2026. Core PCE inflation is running at 3% year over year, sitting in the 91st percentile of the past decade. IRMAA thresholds are indexed, but the standard Part B base has been climbing faster, which means the same nominal MAGI buys a larger surcharge each year.
Three moves that protect the margin
- Project MAGI in October. Add expected Social Security, pension, interest, dividends, capital gains, and any RMD you still need to take. If the total sits within $5,000 of any IRMAA line, you have a planning problem. Pulling from a Roth instead of the traditional 401(k) for the year-end gap keeps MAGI below the cliff.
- Use a Qualified Charitable Distribution to absorb the RMD. A QCD lets anyone age 70.5 or older send up to $111,000 per person directly from an IRA to charity in 2026. The distribution satisfies the RMD without touching MAGI. A couple already giving $10,000 a year to a church or charity can route that gift through the IRA and reclaim the entire $3,500 surcharge.
- File Form SSA-44 after a life-changing event. Retirement, divorce, the death of a spouse, or the loss of a pension all qualify. Social Security will recalculate IRMAA using current-year income rather than the two-year lookback. Most retirees never file it because they assume the brackets are locked.
The 22% bracket that becomes 40%
A 22% marginal tax bracket stops being 22% once Social Security taxation and IRMAA stack on top. A couple sitting in the second IRMAA band who pulls one extra dollar of 401(k) money and lands across the cliff faces an effective marginal rate north of 40% on that withdrawal, once the premium surcharge is folded in. The withdrawal itself looks trivial. The cliff behind it dwarfs it.
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