Medicare Part B has a standard price and a surcharge price, and the difference between them can run into thousands of dollars a year. The surcharge is called the Income-Related Monthly Adjustment Amount, or IRMAA, and it is set using modified adjusted gross income from two years prior. That two-year lookback period turns the years immediately preceding Medicare eligibility into a critical tax-planning window. Your 2026 Medicare premiums are based on the income you reported on your 2024 tax return, and the return filed at age 63 typically dictates the premium you pay at age 65.
The base rate is substantial to begin with. The standard monthly Part B premium for 2026 is $202.90, up $17.90 from $185.00 in 2025, with an annual deductible of $283. About 8% of people with Medicare Part B pay more than that because their income crossed one of the IRMAA thresholds two years back. Part D carries its own parallel surcharge on the same income brackets, so the effect stacks.
The 2026 Part B Premium Ladder
The Centers for Medicare and Medicaid Services publishes the surcharge schedule each fall. For 2026, the tiers for a single filer (and the joint-return equivalents) look like this:
- MAGI at or below $109,000 single / $218,000 joint: $0 surcharge, $202.90 total
- $109,001 to $137,000 / $218,001 to $274,000: $81.20 surcharge, $284.10 total
- $137,001 to $171,000 / $274,001 to $342,000: $202.90 surcharge, $405.80 total
- $171,001 to $205,000 / $342,001 to $410,000: $324.60 surcharge, $527.50 total
- $205,001 to under $500,000 / $410,001 to under $750,000: $446.30 surcharge, $649.20 total
- $500,000 and above / $750,000 and above: $487 surcharge, $689.90 total
The jump between the first and second tiers is roughly $81 per person per month. For a married couple, both spouses pay their own IRMAA if they are enrolled in Medicare, so a single income year impacts two premiums simultaneously. A single dollar of MAGI over a threshold pushes the entire premium into the next tier, which is why crossing a threshold by any amount triggers the full surcharge for that specific bracket.
Why Ages 63 and 64 Are the Pressure Points
Most people file for Medicare during the seven-month window around their 65th birthday. The premium they are assigned is based on the tax return filed roughly 18 to 24 months earlier, typically the return for the year they turned 63. As Suze Orman described the mechanic on her podcast, “IRMAA is based on your modified adjusted gross income from two years prior. So they’re always looking back two years.” The same rule then applies year after year, so income at 64 sets the premium at 66, and so on.
That timing coincides with the years when many households experience one-time income spikes. Roth conversions, the sale of a business or a rental property, exercised stock options, large capital gains from rebalancing a taxable account, and required distributions from inherited retirement accounts all count toward MAGI. So does Social Security itself once claimed. A single planning move at 63 can raise the Part B premium at 65 by hundreds of dollars a month for that year.
The Numbers in Context
The first IRMAA threshold sits well above typical household income. Per capita disposable personal income in the first quarter of 2026 was $68,391, and the personal savings rate has slipped to 3.9%. Households in the surcharge tiers are, by definition, above these medians, but they are also the ones most likely to execute Roth conversion strategies or draw down taxable accounts in those pre-Medicare years. These households have the most to lose from the lack of inflation indexing on the IRMAA thresholds themselves.
Inflation on the thresholds themselves comes from the same CPI-W measure that drives Social Security. The 2026 Social Security COLA is 2.8%, and CPI-W stood at 328.829 in May 2026, up from 316.349 in July 2025. Threshold indexing moves slowly relative to portfolio events, so the practical exposure at 63 and 64 grows with each strong market year.
What the Data Shows
The 2026 schedule documents a fixed structure: six income tiers, a two-year lookback, a surcharge that stacks across Part B and Part D, and a threshold that has not moved dramatically year over year. The data stops short of predicting which retirees will cross a line. That part is set by choices made at 63 and 64. A Roth conversion planned for 63 will show up at 65. Delaying that conversion to 66 pushes the effect to 68. The lookback treats every income year the same way, which is why the two years before Medicare enrollment carry weight, the calendar does not advertise.
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