The $106,000 Line Most Retirees Cross by Accident and the $2,000 Medicare Surcharge It Triggers

The first required minimum distribution generally starts for the year you turn 73. Add a capital gain from selling a rental, a year-end Roth conversion, or a few thousand dollars of municipal bond interest, and a retiree who has never paid a Medicare income surcharge can cross the first IRMAA line without realizing it. Two years later, the bill shows up in the Part B premium.

This is the Income-Related Monthly Adjustment Amount, or IRMAA, and it touches a narrow but growing slice of Medicare. According to the Medicare Trustees Report, roughly 5.1 million beneficiaries paid Part B IRMAA surcharges in 2025, about 7% of the 69 million people enrolled in Medicare Part B. The Trustees project that figure could reach 10.2 million by 2035 as more retirees accumulate income above the threshold. A retiree sitting comfortably below the first threshold may not need to worry this year. One within $20,000 of the line, or planning anything that creates a one-time income spike, needs the math below.

The 2026 line and what crossing it costs

For Medicare premiums in 2026, the first IRMAA tier begins above $109,000 in modified adjusted gross income for single filers and above $218,000 for joint filers. The line moved up from $106,000 for single filers in 2025 because of inflation indexing. Cross the threshold by a dollar and Medicare adds $81.20 per person per month to Part B and $14.50 per person per month to Part D. That works out to $95.70 a month per person, $1,148 a year per person, and roughly $2,297 a year for a married couple where both spouses are on Medicare.

Two features make IRMAA bite harder than the headline suggests. First, it works as a cliff: one dollar over the threshold triggers the entire tier’s surcharge, not just the excess above the line. Second, the surcharge climbs steeply across five tiers. At the top tier, which begins at MAGI of $500,000 or more for single filers and $750,000 or more for joint filers, the combined Part B and Part D surcharge reaches $578 per person per month. That top bracket is not adjusted for inflation and is frozen at least through 2028.

The 2026 standard base premium

The standard Medicare Part B premium in 2026 is $202.90 per month, meaning a beneficiary in the first IRMAA tier pays $284.10 per month for Part B alone. At the top tier, the total Part B premium reaches $689.90 per month. Part D surcharges of $14.50 to $91.00 per month stack on top of those figures, depending on income tier. For context, the 2025 Medicare Trustees Report noted that Part B premiums have risen more than 40% since 2020, making surcharge awareness increasingly important in retirement budgeting.

MAGI counts things people forget

For IRMAA, MAGI is adjusted gross income from Form 1040, line 11, plus tax-exempt interest from line 2a. That add-back catches retirees who shifted income into municipal bonds for what felt like tax-free cash flow. The IRS may exempt such interest from federal income tax, but Medicare still counts it when determining IRMAA brackets.

The lookback runs two years. The 2026 Part B premium reflects the 2024 tax return. The 2027 premium reflects 2025. The 2028 premium reflects 2026. Anything that lifted 2024 MAGI above the line may already be built into this year’s bill unless a qualifying life-changing event supports an SSA-44 appeal. The window a retiree can still steer is calendar 2026, which sets the 2028 premium.

The accidental triggers

A 67-year-old living on Social Security and modest withdrawals rarely brushes the first IRMAA line. The crossings tend to come from taxable events that are large, badly timed, or easy to overlook:

• The first RMD. Required minimum distributions generally begin at age 73 for those born between 1951 and 1959, or at age 75 for those born in 1960 or later. A $1.5 million traditional IRA at 73 can force out roughly $57,000 in mandatory taxable income whether the retiree needs the cash or not.
• An inherited IRA distribution. Under the SECURE Act 10-year rule, beneficiaries who inherited IRAs after 2019 must empty the account within ten years. Those who defer distributions to year ten can face a single large withdrawal that spikes MAGI sharply, potentially pushing a Medicare beneficiary two or three IRMAA tiers higher in one move.
• A Roth conversion. The taxable amount converted lands in MAGI in the conversion year. A $50,000 conversion stacked on Social Security and a pension is enough to push many couples past $218,000.
• A capital gain. Selling a rental property, downsizing a primary home with gain above the $500,000 joint exclusion, or rebalancing a taxable brokerage account can all flow through AGI.
• Severance, deferred comp, or a pension lump sum. These income events often land in the same year someone enrolls in Medicare, combining with Social Security to push MAGI well above expectations.

The survivor trap

When a spouse dies, the survivor can generally still file jointly for the year of death, but most older widows and widowers eventually file as single. Single IRMAA brackets sit at roughly half the joint income amounts. A widow whose household income comfortably fit under $218,000 when filing jointly can land in a higher IRMAA tier on her own if income does not fall by a similar proportion. Nothing about her spending may have changed. The bracket did.

What SSA-44 can and cannot fix

Form SSA-44 lets a beneficiary request a lower IRMAA tier when income dropped because of a qualifying life-changing event: marriage, divorce or annulment, death of a spouse, work stoppage, work reduction, loss of income-producing property, loss of pension income, or certain employer settlement payments. The form does not reverse voluntary income events. A Roth conversion or voluntary property sale will generally not qualify just because it spiked MAGI for that year.

What to do this year

• Model the line before December. Add projected AGI and tax-exempt interest. If you are within $20,000 of $109,000 single or $218,000 joint, consider deferring discretionary income to a year with more headroom or splitting a controllable event across two tax years.
• Use QCDs once you qualify. Qualified Charitable Distributions from an IRA, available to owners age 70½ and older, can count toward the RMD but stay out of AGI when transferred directly to a qualified charity. The 2026 limit is $111,000 per person (up from $108,000 in 2025). For a retiree who already gives, this is one of the most effective ways to keep IRA dollars from lifting MAGI into an IRMAA tier. The QCD’s appeal has grown further in 2026: changes introduced by the One Big Beautiful Bill Act restrict certain itemized charitable deductions, making the income-exclusion mechanics of the QCD more attractive than ever for IRA owners over 70½.
• File SSA-44 promptly after a qualifying life-changing event reduces income. Retirement, a meaningful work reduction, or the death of a spouse can support a request when proper documentation, such as an employer statement or death certificate, confirms the event and the lower-income year. Waiting for the two-year lookback to correct itself is the costlier option.

The line is easier to avoid before you cross it

IRMAA is not a reason to avoid every RMD strategy, Roth conversion, or asset sale. It is a reason to price the Medicare surcharge before the tax year closes. Once the return is filed and the two-year lookback reaches it, a few extra dollars of MAGI can become a full year of higher premiums with no remedy short of a qualifying life-changing event.

Sources: CMS, “2026 Medicare Parts A & B Premiums and Deductibles”; Medicare Trustees Report (2025 data); SSA Form SSA-44 and SSA IRMAA guidance; IRS Notice 2025-67 (QCD limits); IRS guidance on required minimum distributions. Figures reflect 2026 plan-year rules.

Editor’s note: This revision adds the Medicare Trustees’ projection that IRMAA payers could reach 10.2 million by 2035 (up from roughly 5.1 million in 2025), includes a new bullet on inherited IRA distributions under the SECURE Act 10-year rule as an emerging IRMAA trigger, notes that Part B premiums have risen more than 40% since 2020 per the 2025 Trustees Report, and adds context that the One Big Beautiful Bill Act’s 2026 charitable deduction changes make QCDs more attractive for IRA owners above age 70½.

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