Suze Orman Just Said the Medicare Surcharge Can Add Up to $578 a Month and Most Pre Retirees Have Never Heard of It

On her September 15, 2022 podcast episode Ask Suze & KT Anything: Diversification, The 5 Year Rule and IRMAA, Suze Orman walked listeners through one of the most expensive surprises in retirement: “IRMAA stands for Income Related Monthly Adjustment Amount.” Then she dropped the number that should make every pre-retiree pay attention. “It can be anywhere for part B from $170 a month more to $578 a month more.”

If you have never heard of IRMAA, you are not alone, and that is exactly the problem. A one-time spike in income, say from selling a rental property, exercising stock options, or doing a large Roth conversion, can quietly hand you a Medicare bill two years later that you never budgeted for. For a married couple where both spouses hit the top tier, you are talking about an extra surcharge that compounds across two Part B premiums plus Part D adjustments.

The verdict: Orman is right, and most people learn this the hard way

Her advice is sound and underdiscussed. IRMAA is real, it is steep, and the math behind it punishes anyone who treats “income” as a single-year concept once they hit 65.

Here is the mechanic. Medicare Part B has a standard premium that almost everyone pays. If your modified adjusted gross income (MAGI) crosses certain thresholds, Social Security tacks on a surcharge tier on top of that base premium. Orman noted she and her wife KT pay roughly $526 a month for Part B out of their Social Security check, because their income lands them in a higher bracket.

The trap is the lookback. IRMAA is based on your modified adjusted gross income from two years prior. So your 2026 Medicare premium is set by what showed up on your 2024 tax return. Most retirees do not realize a single transaction in their 60s can echo into a Medicare bill in their late 60s.

Picture a 65-year-old couple living on $90,000 of pension and Social Security income. Comfortable, well below any IRMAA tier. In 2024 they sell a rental property and book a $250,000 gain. Their 2024 MAGI balloons. Two years later, in 2026, Social Security looks back at that return and slots them into a high IRMAA bracket. Instead of the base premium, each spouse could pay an extra $170 to $578 per month for Part B. At the top tier, for two people, that is more than $1,100 a month in surcharges on Part B alone, before Part D adjustments.

The kicker: the surcharge applies for the entire year, not just the month the property sold. One transaction, one full year of penalty, two years after the fact.

The variable that flips the math: was it a one-time event?

This is where Orman gave listeners the lever most do not know exists. If you have what she called a “life changing event,” you can file Form SSA-44 and request that Social Security adjust your IRMAA based on your current income rather than the two-year-old return.

The list of qualifying events is narrower than people assume. Marriage, divorce, death of a spouse, work stoppage, work reduction, loss of pension income, and a few others. A capital gain from selling property does not, by itself, qualify, but the related event (retiring, stopping work) often does.

Run the two scenarios. Scenario A: you sell the property the year you also retire and stop earning a paycheck. File SSA-44 citing work stoppage, and you may shed the surcharge after one year instead of carrying it. Scenario B: you sell the property while still working full-time. No qualifying event, no relief, you eat the full IRMAA hit. Same transaction, very different Medicare bill, decided entirely by whether you can attach it to a life event Social Security recognizes.

What to do this week

1. Pull your most recent tax return and find your MAGI. If you are within $20,000 of any IRMAA threshold and you are 63 or older, every dollar of additional income now has a Medicare cost attached.
2. Before any large taxable event (Roth conversion, property sale, RMD, stock option exercise), model the two-year-out Medicare premium impact. Spreading a Roth conversion over three years instead of one can keep you in a lower tier.
3. If you already had a one-time income spike tied to retirement, marriage, divorce, or loss of pension, download Form SSA-44 and file it. Do not wait for Social Security to figure it out.
4. Check the current year’s IRMAA brackets at SSA.gov before December. Thresholds shift with inflation, and a small bracket change can save or cost you four figures.

Orman’s point lands because IRMAA is the rare retirement cost you can actually plan around, if you know it exists. The two-year lookback gives you time to manage income on purpose instead of by accident.