Social Security Fairness Act Slams 71-Year-Old Retired Teacher With IRMAA Penalty

A retired public school teacher, age 71, lives on a $48,000 state pension and pulls roughly $36,000 a year from a $1.1 million 403(b). That puts her ordinary income near $84,000 before Social Security even enters the picture. For decades she assumed Social Security would be a small add-on, because the Windfall Elimination Provision clipped her benefit as a non-covered government worker. Then Congress passed the Social Security Fairness Act in January 2025, repealing WEP and the Government Pension Offset (GPO). President Biden signed the act on January 5, 2025, and it restored benefits to roughly 2.8 million teachers, firefighters, and other public employees who had spent careers in jobs not covered by Social Security.

The restored check is welcome. The modified adjusted gross income (MAGI) bump that comes with it, however, creates a new and largely invisible problem.

The IRMAA Cliff Nobody Warned Her About

IRMAA, the Income-Related Monthly Adjustment Amount, surcharges Medicare Part B and Part D for higher-income retirees. For 2026, the first surcharge tier kicks in for single filers with MAGI above $109,000. The standard Part B premium is $202.90 a month, but crossing into Tier 1 pushes the total to $284.10, with a Part D surcharge of $14.50 stacked on top. Critically, Medicare uses a two-year lookback: your 2026 premiums are set by your 2024 tax return, meaning the income shock from a restored Social Security benefit hits the premium bill with a lag that many retirees never anticipate.

Her pension and 403(b) draws already sit around $84,000. Add her restored Social Security benefit (with the 2026 COLA of 2.8% applied), and up to 85% of that benefit counts as taxable income. Even a modest restored benefit can push her MAGI over the $109,000 line. One dollar over the threshold triggers the full tier surcharge for an entire year.

There is a further wrinkle from recent tax law. The One Big Beautiful Bill Act, signed in July 2025, created a $6,000 bonus deduction for filers age 65 and older. The catch: that deduction phases out for single filers with MAGI above $75,000. Her pension alone exceeds that mark, so the new senior deduction provides her no benefit and does nothing to soften the IRMAA exposure.

The Appeal She Thought She Had

Form SSA-44 is the IRMAA reconsideration request. It works only for a specific list of qualifying life-changing events: work stoppage, work reduction, marriage, divorce, death of a spouse, loss of pension income, or loss of income-producing property. Receiving a previously withheld Social Security benefit is not on the list. Neither is a MAGI increase caused by a change in federal law. High income, on its own, is not grounds for relief.

There is also the matter of the retroactive lump-sum payments the SSA began distributing in late February 2025, covering restored benefits back to January 2024. For retirees who received that windfall in 2025, the one-time payment inflated their 2025 MAGI and will drive up their 2027 Medicare premiums, compounding the problem across two consecutive benefit years.

The 2026 federal brackets for a single filer apply the 22% rate on income above $50,400 and the 24% rate above $105,700. Her marginal tax rate sits in the 22% band today, with real headroom before the 24% bracket begins. The IRMAA cliff at $109,000, however, hits well before that 24% threshold, making it the binding constraint on her income planning.

Required minimum distributions on a $1.1 million 403(b) at her age compound the problem further. The RMD percentage rises every year, which means future MAGI grows automatically whether she wants the cash or not. Each year of inaction makes the IRMAA tier harder to avoid.

The Practical Path Forward

One strategy dominates for most retirees in her position: bracket-fill Roth conversions, sized to the IRMAA tier rather than the tax bracket.

1. Convert 403(b) dollars to Roth in measured slices. Each conversion is taxable now at 22%, but future Roth withdrawals do not count toward MAGI. As Suze Orman has noted, “Money that’s withdrawn from a Roth does not count towards Social Security or Medicare B premiums.”
2. Size each conversion to stop short of $109,000 MAGI. Leave a buffer of several thousand dollars for interest and dividends. At today’s 10-year Treasury yield above 4.6%, even conservative fixed-income holdings throw off enough income to matter at the margin.
3. Time 403(b) withdrawals around RMD math. Pulling more now instead of converting just shifts the same tax bill without solving the MAGI problem. Conversions shrink the future RMD base; ordinary withdrawals do not.

The action item is straightforward: build a projected 2026 MAGI worksheet before year-end. Add pension, planned 403(b) withdrawals, taxable interest, and 85% of the restored Social Security benefit. If the total lands within a few thousand dollars of $109,000, a partial Roth conversion sized to the gap can hold MAGI below the threshold and preserve the lower Medicare premium for the following year.

Editor’s note: This article was updated to reflect the 10-year Treasury yield rising above 4.6% from the earlier approximation of 4.5%, to add the IRMAA two-year lookback rule, to note the one-time retroactive WEP/GPO lump-sum payments and their separate MAGI impact, and to incorporate the One Big Beautiful Bill Act’s new $6,000 senior deduction, which phases out above $75,000 MAGI and is therefore unavailable to the retiree described in this article.

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