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.”…
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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 landed the number that should command every pre-retiree’s attention. “It can be anywhere for part B from $170 a month more to $578 a month more.”
Those figures came from 2022. By 2026, the math has shifted. According to Kiplinger, the standard Medicare Part B premium is now $202.90 per month, a $17.90 jump from the 2025 rate of $185.00. The Part B IRMAA surcharge alone runs from $81.20 to $487.00 per month depending on income tier. Add in Part D surcharges, which range from $14.50 to $91.00 per month in 2026, and the very top bracket carries a combined IRMAA hit of $578 per month. Orman’s headline number remains accurate as a combined figure; it just arrives by a different route than it did four years ago.
If you have never heard of IRMAA, you are not alone, and that is exactly the problem. A one-time income spike 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, that surcharge compounds across two Part B premiums and two Part D adjustments.
The verdict: Orman is right, and most people learn this the hard way
Her advice is sound and remains chronically underdiscussed. IRMAA is real, it is steep, and it penalizes anyone who treats “income” as a single-year concept once they reach 65.
Here is how it works. Medicare Part B carries a standard premium that almost everyone pays. Once your modified adjusted gross income (MAGI) crosses certain thresholds, Social Security adds a surcharge tier on top of that base. In 2026, the surcharge kicks in at $109,000 MAGI for single filers and $218,000 for joint filers. There are five tiers in all, with the top bracket beginning at $500,000 for single filers and $750,000 for joint filers. Roughly 5.1 million Medicare beneficiaries, about 7% to 8% of all Part B enrollees, paid an IRMAA surcharge in 2025. Orman noted on her podcast that she and her wife KT were paying roughly $526 a month for Part B out of their Social Security check because their income placed them in a higher bracket. Today, the total Part B premium at the upper tiers reaches as high as $689.90 per month, or $8,278.80 per year per person.
The trap is the two-year lookback. IRMAA is based on your MAGI from two years prior, so your 2026 Medicare premium is determined by what appeared on your 2024 tax return. Most retirees do not realize that a single transaction in their 60s can echo into a Medicare bill years later.
The surcharge also operates as a cliff, not a marginal rate. Cross a threshold by one dollar and your entire year of coverage reprices at the higher tier. A retiree with 2024 MAGI of exactly $109,000 pays the standard $202.90 monthly in 2026. A neighbor who reported $109,001 pays $284.10, an extra $974 for the year per person and nearly $2,000 for a couple where both spouses are enrolled. At the top bracket, the annual Part B cost alone reaches $8,278.80 per person, before any Part D adjustment is added.
Two lesser-known traps compound the cliff problem. First, tax-exempt municipal bond interest counts in full toward MAGI for IRMAA purposes. Retirees who hold municipal bonds specifically to reduce their federal income tax bill often discover that the same interest raises their Medicare premiums, because IRMAA uses a broader definition of income than ordinary taxable income. Second, married couples who file separately face a particularly punitive outcome: if you lived with your spouse at any point during the tax year and filed separately, the highest surcharge tiers kick in much earlier, starting at just $109,000 of individual income.
Picture a 65-year-old couple living on $90,000 of pension and Social Security income. They are comfortable and well below any IRMAA tier. In 2024 they sell a rental property and book a $250,000 capital gain. Their MAGI balloons. Two years later, Social Security looks back at that return and slots each spouse into a high IRMAA bracket. At the top tier, the combined Part B and Part D surcharges for two people can exceed $1,100 a month, before any plan premiums.
The surcharge applies for the entire calendar year, not just the month the transaction occurred. One event produces one full year of elevated premiums, two years after the fact. For those near the highest income tier, the situation is further complicated by a legislative quirk: the fifth and top IRMAA bracket is frozen by the Bipartisan Budget Act of 2018 and will not be indexed for inflation until at least 2028. The lower four brackets move upward with CPI-U each year, but the $500,000/$750,000 ceiling does not, meaning more retirees with rising incomes drift into the maximum surcharge zone over time.
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 experienced what she called a “life changing event,” you can file Form SSA-44 and request that Social Security recalculate your IRMAA using your current income rather than the two-year-old return.
The qualifying events are narrower than most people assume. Marriage, divorce, death of a spouse, work stoppage, work reduction, and loss of pension income are among them. A capital gain from selling property does not, by itself, qualify. But the associated event, such as retiring or stopping work in the same year, often does.
Run both scenarios before you act. Scenario A: you sell the property the same year you retire and stop earning a paycheck. File SSA-44 citing work stoppage and you may exit the elevated surcharge after one year instead of carrying it into a second. Scenario B: you sell the property while still working full-time. No qualifying event means no relief, and you absorb the full IRMAA hit for that year. The same transaction, a very different Medicare bill, decided entirely by whether you can attach it to a life event Social Security recognizes.
What to do this week
- Pull your most recent tax return and locate your MAGI. If you are within $20,000 of any IRMAA threshold and you are 63 or older, every dollar of additional income now carries a Medicare cost attached to it. If you hold municipal bonds in a taxable account, add that interest back in when estimating your MAGI exposure.
- Before any large taxable event (Roth conversion, property sale, RMD, stock option exercise), model the two-year Medicare premium impact. Spreading a Roth conversion over three years instead of one can keep you in a lower tier and save thousands.
- If you already had a one-time income spike tied to retirement, marriage, divorce, or loss of pension income, download Form SSA-44 and file it promptly. Social Security will not make this adjustment on your behalf.
- Check the current year’s IRMAA brackets at SSA.gov before December. The first four tiers adjust with inflation each year and a modest bracket change can save or cost a retiree four figures annually. The top bracket is frozen through at least 2028, so income near that ceiling carries no bracket-drift relief, and more retirees are drifting into it as nominal incomes rise.
Orman’s point lands because IRMAA is the rare retirement cost you can actually plan around, provided you know it exists. The two-year lookback gives you a window to manage income deliberately rather than discover the bill after the fact.
Editor’s note: This revision adds context on the Bipartisan Budget Act of 2018 as the source of the top-bracket freeze through 2028, introduces the married-filing-separately surcharge trap (where the highest tiers apply starting at $109,000 of individual income), and notes that bracket creep into the frozen top tier is accelerating as nominal incomes rise. The five-tier bracket structure and the $500,000/$750,000 top-bracket thresholds are also now specified.
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