You Retired This Year. Medicare Is Charging You Off the Six-Figure Salary You Earned in 2024
A 66-year-old who walked out of her corporate job last December opened her first Medicare bill in January and found a number she did not recognize. The standard Part B premium for 2026 is $202.90, up $17.90 from 2025. Hers…
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A 66-year-old who walked out of her corporate job last December opened her first Medicare bill in January and found a number she did not recognize. The standard Part B premium for 2026 is $202.90, up $17.90 from the $185.00 rate in 2025. Her bill showed $405.80, plus a Part D surcharge on top of that. The culprit is a rule that almost no new retiree sees coming: Medicare looked at her 2024 tax return, the year she was still drawing a six-figure salary, and priced her 2026 coverage off that figure.
If your 2024 modified adjusted gross income was under $109,000 as a single filer or under $218,000 filing jointly, this article does not apply to you. Only about 8% of Part B enrollees pay the Income-Related Monthly Adjustment Amount, known as IRMAA. The rest pay the standard premium and can stop reading. For the new retiree who cleared one of those thresholds in her final working year, the rest of this matters enormously, because there is a form that can erase the surcharge in the same year it hits.
The two-year lookback, explained in dollars
IRMAA prices today’s premium off a tax return from two years ago. Your 2024 MAGI sets your 2026 surcharge. Your 2025 return will set 2027. Your first full retirement year, 2026, will not flow through to the premium calculation until 2028. That two-year lag is the trap: you pay working-income premiums on a retirement-income budget for up to two full years.
MAGI for IRMAA purposes is adjusted gross income (Form 1040, line 11) plus tax-exempt interest (line 2a). Municipal bond income that felt tax-free at the state level still counts here. Roth distributions, by contrast, do not count toward MAGI and do not affect IRMAA calculations. A single filer with 2024 MAGI of $150,000 falls in the second surcharge tier (the range covering $137,001 to $171,000) and owes the following in 2026:
- Part B total premium of $405.80 per month instead of $202.90, an IRMAA add-on of $202.90.
- Part D surcharge of $37.50 per month on top of whatever the chosen drug plan charges.
- Combined extra cost: $240.40 per month, or $2,884.80 over a full year.
A married couple with $300,000 of joint 2024 MAGI lands in that same tier and pays the surcharge on each spouse’s coverage separately. The household total runs roughly $5,770 in additional Medicare cost for 2026 alone. Retirees with slightly lower income, falling in Tier 1 ($109,001 to $137,000 single), face a smaller but still substantial total Part B premium of $284.10, plus a $14.50 monthly Part D surcharge.
Why SSA-44 actually works here
Most people have heard that IRMAA appeals rarely succeed. That reputation comes from people who tried to appeal voluntary income events: a Roth conversion, a large capital gain, a home sale. None of those qualify, regardless of how sharply they spiked MAGI. The Social Security Administration’s Form SSA-44 accepts only eight specific life-changing events: marriage, divorce or annulment, death of a spouse, work stoppage, work reduction, loss of income-producing property, loss of pension income, and employer settlement payment.
Work stoppage and work reduction are on that list, making retirement one of the most common qualifying events for an SSA-44 request. If you stopped working in 2025 or 2026 and your income dropped substantially, SSA may recalculate the surcharge using an estimate of your current-year MAGI rather than relying on the 2024 return on file. Submitting the form promptly after receiving your IRMAA determination notice can shorten the period you spend at the elevated premium, and in some cases may prevent the surcharge from persisting into future billing cycles.
The income math is straightforward. If a retiree’s current-year MAGI falls to roughly $60,000 after leaving work, that figure sits well below the first IRMAA threshold. An approved SSA-44 request allows SSA to recalculate the premium using the lower income estimate, which can eliminate the surcharge entirely and restore the standard $202.90 rate. Processing times vary by office and case complexity, but advisors generally estimate 30 to 90 days once a complete file is submitted.
What to do this week
- Download Form SSA-44 from ssa.gov, or fill it out through your my Social Security online account at ssa.gov/medicare/lower-irmaa. Check the box for “Work Stoppage” or “Work Reduction,” enter the month and year your employment ended, and provide a current-year MAGI estimate built from expected Social Security, pension, dividend, interest, and any part-time income.
- Attach a retirement letter from your former employer, a final pay stub, or a signed statement confirming the stop date. SSA will not process the form without documentation of the qualifying event. Submit copies, not originals, as SSA does not return original documents.
- Submit by mail, fax, in person at a local SSA office, or by uploading through your my Social Security account. The online upload option is typically the fastest, as it eliminates transit time and creates an immediate electronic record. If the request is approved, SSA can adjust future premiums and may credit prior overpayments, depending on the timing of the determination and the beneficiary’s circumstances.
Skip the form and the surcharge corrects itself when your 2026 return reaches SSA in 2028. Filing SSA-44 pulls that fix forward by two years. For a single filer in Tier 2, that is close to $5,800 kept in the household rather than mailed to CMS while waiting for the lookback to catch up.
Sources: CMS, “2026 Medicare Parts A & B Premiums and Deductibles,” released November 14, 2025; Social Security Administration Form SSA-44 and ssa.gov/medicare/lower-irmaa. Figures reflect the 2026 plan year.
Editor’s note: This update adds the online my Social Security account as a submission option for Form SSA-44, notes that Roth distributions do not count toward MAGI for IRMAA purposes, and includes the Tier 1 premium of $284.10 for single filers between $109,001 and $137,000 to give a fuller picture of who the surcharge affects.
Contact [email protected] for any questions or corrections.
Drew Wood has edited or ghostwritten nine books and published more than 1,500 articles on investing, business, politics, travel, world cultures, wildlife, and earth science. He holds a doctorate and four master's degrees and has nearly 30 years of college teaching experience. His travels have taken him to 25 countries, including three years living in Ukraine.
