A 66-year-old executive retires in 2024 with a $410,000 annual pension, $52,000 in Social Security, and roughly $50,000 in dividend and interest income. His first Medicare bill arrives in 2026. The Part B premium is $689.90 per month, not the standard $202.90. He calls Social Security to dispute it. The number is correct, and unless his income falls sharply, he will likely keep paying top-tier IRMAA.
This is the income-cost cascade many retirees never see coming, and it can hit people whose retirement income looks safest: a defined-benefit pension. If your MAGI is comfortably below $109,000 single or $218,000 joint, IRMAA may not be an immediate concern. CMS says income-related Part B adjustments affect roughly 8% of people with Medicare Part B. The trap below is for retirees close to or above those lines.
Why a pension is the worst income source for IRMAA
IRMAA, the Income-Related Monthly Adjustment Amount, uses a two-year MAGI lookback: 2024 income drives 2026 premiums, 2025 income drives 2027, and so on. MAGI here means adjusted gross income (Form 1040, line 11) plus tax-exempt interest (line 2a). Municipal bond income that feels tax-free still counts.
A Roth conversion or home sale may spike MAGI once. A large pension can keep MAGI elevated year after year, especially if the plan includes cost-of-living adjustments. Social Security adds to the pile, and the 2026 COLA was 2.8%. For a high-income pensioner, the income that triggered IRMAA two years ago may still be present when the premium bill arrives.
The 2026 top-bracket math
Our retiree’s 2024 MAGI lands above $500,000 as a single filer, the highest of six IRMAA tiers. For 2026, the CMS fact sheet sets his costs as follows:
| 2026 cost (single filer, MAGI ≥ $500,000) | Monthly surcharge per person | Annual surcharge per person |
|---|---|---|
| Part B IRMAA | $487.00 | $5,844 |
| Part D IRMAA | $91.00 | $1,092 |
| Total IRMAA surcharge | $578.00 | $6,936 |
A married couple where both spouses are enrolled and joint MAGI sits at or above $750,000 pays that surcharge twice: about $13,872 a year on top of standard premiums. At the first tier, which starts above $109,000 for single filers and above $218,000 for joint filers, the combined Part B and Part D surcharge is $95.70 per person per month, or $1,148.40 a year. The cliffs are real, and the top published tier covers any single-filer MAGI of $500,000 or more.
RMDs are about to make it worse
For this retiree, Required Minimum Distributions generally begin at age 73. His 401(k) and IRA balances may add another layer of mandatory taxable income on top of a pension that already clears the top threshold. Managing down into a lower bracket may be difficult once the pension and RMDs run side by side, but there are still levers: Qualified Charitable Distributions from an IRA beginning at age 70½ and partial Roth conversions before RMDs start.
When SSA-44 helps and when it does not
Form SSA-44 lets you request a lower IRMAA amount, but only after a qualifying life-changing event that reduced household income. The list includes marriage, divorce or annulment, death of a spouse, work stoppage, work reduction, loss of income-producing property, loss of pension income, and certain employer settlement payments. A pension that keeps paying does not qualify. Neither does a Roth conversion, a home sale, or an RMD that simply raised MAGI.
One second-order trap is the survivor bracket. A surviving spouse may still be able to file jointly for the year of death, but many older survivors eventually file as single, and single IRMAA thresholds are roughly half the joint ones. The same income can newly trigger IRMAA or jump a tier. Death of a spouse is an SSA-44 qualifying event if it reduces household income, so file promptly when the facts support it.
What to do
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If you retire mid-year and your income drops, file SSA-44 promptly. Work stoppage is one of the clearest qualifying events, and it can reduce or eliminate IRMAA before the normal two-year lookback catches up to your lower income. If a large pension keeps MAGI in the same tier, the form may not change the bill.
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Run partial Roth conversions in the gap years between retirement and age 73 only after modeling the tax and Medicare impact together. If the pension already puts you in the top IRMAA tier, a conversion may not add more IRMAA for that year, but it can still raise income taxes and may affect other tax items. The trade-off is smaller future RMDs.
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From age 70½, consider routing charitable giving through QCDs. A properly executed QCD is sent directly from the IRA to charity and is excluded from taxable income, which can help keep MAGI lower for IRMAA purposes. For 2026, the QCD limit is $111,000 per eligible IRA owner.
The Pension Is Safe. The Premium Is Not.
A large pension can make retirement feel secure, but Medicare prices that income every year through IRMAA. The goal is not to avoid good income. It is to know which dollars are permanent, which are controllable, and which ones will still be showing up on a Medicare bill two years from now.
Sources: 2026 Medicare Parts A & B Premiums and Deductibles (CMS); Medicare 2026 cost materials; Social Security Administration Form SSA-44 and IRMAA guidance; IRS guidance on RMDs and QCDs. Figures reflect plan year 2026.
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