A $1.8 Million 401(k) and Social Security Coming Up? Drain It Before 70 to Dodge the IRMAA Cliff

A 64-year-old couple with $1.8 million sitting in traditional 401(k)s walks into a planning meeting convinced they should claim Social Security at full retirement age and let the portfolio compound. The advisor pushes back: claim later, drain the 401(k) first. The math behind that counterintuitive sequence is what high earners are quietly using to dodge a Medicare premium structure that punishes anyone who waits.

The trap is timing. Required minimum distributions on a $2 million-plus pre-tax balance, stacked on top of two Social Security checks at full retirement age, push modified adjusted gross income well past $218,000 for joint filers. That is the first IRMAA cliff. Cross it, and Medicare Part B jumps from $202.90 per person per month to $284.10, plus a Part D surcharge of $14.50. For a couple, that is roughly $2,300 a year in surcharges triggered by a dollar of MAGI over the line.

Why the Pre-Social Security Window Is the Whole Game

The strategy uses the gap between retiring early and claiming Social Security at 70 to spend down the 401(k) at controlled tax rates. The 2026 brackets for married filing jointly hit 22% over $100,800 and 24% over $211,400. The standard deduction is $32,200. That means a couple can pull roughly $185,800 out of a traditional 401(k), report MAGI of about $218,000, and still sit right at the edge of the first IRMAA tier while staying inside the 24% bracket.

Do that for six years from age 64 to 70 and the pre-tax balance shrinks by more than $1 million in gross withdrawals. The future RMD, which uses the IRS Uniform Lifetime Table starting at 73, falls in proportion. A $2.5 million balance left untouched produces a first-year RMD near $94,000. A $1.4 million balance produces one closer to $53,000. That difference is what keeps the couple under the IRMAA line a decade later, when Social Security and RMDs both hit the tax return.

The Delayed Claim Pays for the Tax Bill

Delaying Social Security from full retirement age at 67 to age 70 raises the benefit by 8% a year, a 24% lift before COLAs. Layer in the 2.8% 2026 COLA and the indexing that follows, and a couple expecting $4,000 a month each at 67 lands closer to $5,200 a month each at 70 in inflation-adjusted dollars. That higher base benefit is also the survivor benefit. The pre-tax withdrawals during the gap effectively buy a larger, joint-and-survivor annuity at a discount.

The penalty for getting it wrong is concrete. A couple whose RMDs and Social Security combine to push MAGI past $274,000 faces Part B of $405.80 per person, or about $4,870 a year in surcharges alone. Push past $342,000 and the premium climbs to $527.50 each. Because IRMAA uses a two-year lookback, the surcharge that arrives at 73 reflects income reported at 71. Planning has to start before the bill shows up.

What This Looks Like in Practice

Three steps separate this from generic drawdown advice:

1. Map MAGI to the $218,000 first-tier threshold for every year between Medicare enrollment at 65 and age 73. Include any taxable brokerage income, since capital gains and dividends count toward IRMAA.
2. Size each 401(k) withdrawal to fill the 24% bracket without crossing the IRMAA line, then run a parallel projection that adds Roth conversions for any remaining headroom. A conversion done at 65 lowers the future RMD denominator the same way an outright withdrawal does, without forcing the cash out of tax-advantaged shelter.
3. Lock the Social Security claim at 70 unless health or longevity assumptions change. The 24% delayed retirement credit, applied to the larger of the two benefits, is the survivor’s check.

The couples who run this sequence are recognizing that the $1,629.6 billion in annual Social Security transfer payments now flowing through the system is indexed to inflation, while the IRMAA brackets adjust more slowly. Spending the 401(k) first turns the most punitively taxed dollars into the cheapest ones.