A Retired Teacher and Firefighter Earn $140,000 in Combined Pensions. It Put Both of Them in an IRMAA Tier.

Picture a married couple, both about 67, both newly on Medicare. She taught middle school for three decades. He spent his career as a firefighter. Between them, two solid public-sector pensions bring in roughly $140,000 a year. They have no million-dollar 401(k), no rental empire, no big stock sales. So when the Medicare letter arrived showing higher Part B premiums for both of them, the reaction was the one you see in retirement forums all the time: we don’t even have a big nest egg, how are we considered high income?

The answer is the Income-Related Monthly Adjustment Amount, known as IRMAA, and it doesn’t care where the income comes from. Pension dollars count just like portfolio withdrawals. After the Social Security Fairness Act of 2025 repealed the Government Pension Offset and Windfall Elimination Provision, many retired teachers, police officers, and firefighters now collect Social Security checks they were previously denied. Restored Social Security stacked on top of two pensions is exactly the combination that pushes a household over the line.

The Two-Year Lookback That Catches People Off Guard

Medicare premiums for 2026 are set from the 2024 tax return. As Suze Orman put it on her Women & Money podcast, “IRMAA is based on your modified adjusted gross income from two years prior. So they’re always looking back two years.” There is no fixing it after the fact, and income from the final working years often shadows the first years of Medicare.

For a married couple filing jointly in 2026, IRMAA kicks in once modified adjusted gross income tops $218,000. Below that line, each spouse pays the standard Part B premium of $202.90 a month. Cross it by a dollar and each spouse pays an extra $81.20, bringing each premium to $284.10. There’s no phase-in. It’s a cliff.

For our couple, $140,000 in pensions doesn’t get them there on its own. Add restored Social Security (up to 85% of which becomes taxable at higher incomes), some interest from a savings account, and joint MAGI can clear $218,000 without anyone doing anything wrong. Once it does, both Medicare premiums go up, because IRMAA is assessed per person and deducted from each Social Security check.

Why the Sting Outlasts the Dollar Amount

The combined surcharge in that first tier runs roughly $162 a month for the household, close to $1,950 a year. The sting comes from permanence. Pensions do not turn off. Social Security does not turn off. Unless a spouse passes away or there is a genuine income drop, the surcharge tends to repeat year after year.

It also feeds on itself. As provisional income climbs, more of Social Security becomes taxable, which raises AGI, which raises MAGI, which is the very number IRMAA reads. The pieces reinforce each other in a way most retirees do not see coming until they are already inside it.

What You Can Actually Control

Pensions are fixed, so the usual MAGI-trimming playbook mostly doesn’t apply. A few things still help:

1. Spend from the right buckets. Withdrawals from a Roth account or taxable savings principal do not add to MAGI. Cash needed for a trip or a new roof is better pulled from there than from a traditional IRA.
2. Avoid stacking discretionary income into a single year. Selling a long-held stock, cashing a savings bond, or taking a lump sum can push you into the next IRMAA tier, where the per-person surcharge jumps to $202.90 on top of the standard premium. Spreading those moves across years often keeps you a tier lower.
3. Know what SSA-44 will and won’t fix. The Life-Changing Event form can reduce IRMAA after a qualifying event like retirement, a spouse’s death, or divorce. It does not apply to ordinary pension income that simply keeps arriving.

The Subtle Truth About This Situation

For a two-pension household with restored Social Security, some IRMAA exposure may simply be the cost of having reliable lifetime income from two careers. The realistic goal becomes avoiding making IRMAA worse by accident, especially in years involving a large sale, a sizable withdrawal, or a Roth conversion made without modeling the tax effect.

Anyone nearing 65 with a similar income picture should review the prior two years’ tax returns now, since those are the ones that set Medicare premiums two years out. Every household’s facts are slightly different, and a single line item on a return can shift which tier a household lands in.