For higher-income retirees, the Income-Related Monthly Adjustment Amount, or IRMAA, functions much like a tax on the same Medicare coverage everyone else receives, even though it never shows up on a tax return and the IRS does not collect it. It is a surcharge tied to income from two years earlier, applied on top of the standard Medicare Part B and Part D premiums, and it can push a retired couple’s annual outlay for identical benefits by more than $8,000.
The Base Premium and Where the Surcharge Starts
The 2026 standard Medicare Part B premium is $202.90 per month, which every enrolled beneficiary pays before any income adjustment. For a couple, that alone works out to roughly $4,870 per year in Part B premiums. IRMAA applies on top of that base, and it kicks in for joint filers with modified adjusted gross income above $218,000, or above $109,000 for individuals. Roughly 8% of people with Medicare Part B are affected, but the share climbs quickly among retirees drawing from large IRAs, taxable brokerage accounts, or continuing part-time consulting income.
The reason the threshold is easier to cross than it looks is the two-year lookback. Your 2026 IRMAA is set from your 2024 tax return. A one-time Roth conversion, a large capital gain, or the sale of a business or rental property in 2024 can trigger surcharges in 2026 even if income has since normalized.
How $8,000+ Happens for a Couple
The Part B surcharge is assessed per beneficiary, not per household. Both spouses on Medicare pay their own IRMAA based on the joint return. That doubles the impact at every tier. The 2026 schedule for joint filers looks like this:
- $218,000 to $274,000: adds $81.20 per spouse per month, bringing the total Part B to $284.10.
- $274,000 to $342,000: adds $202.90, total $405.80.
- $342,000 to $410,000: adds $324.60, total $527.50.
- $410,000 to $750,000: adds $446.30, total $649.20.
- $750,000 and above: adds $487.00, total $689.90.
Consider a couple in the fourth tier. The $446.30 monthly surcharge applies twice, once for each spouse, for twelve months. The extra cost above what a couple at the base rate pays is roughly $10,711 per year, and that figure covers only Part B. Part D carries its own IRMAA schedule with the same income tiers, adding to the total. At the top tier, the couple’s Part B alone reaches about $16,558 per year, for coverage identical to what a household under $218,000 receives for $4,870.
Why the Cliff Structure Matters
IRMAA operates as a cliff. Cross a threshold by one dollar of modified adjusted gross income, and the full surcharge applies for the entire year. A couple reporting $274,001 in joint MAGI pays the same Part B premium as a couple reporting $341,999. That cliff design is why year-end tax planning matters more after 65 than before. A modest capital gain harvest or Roth conversion that would be routine in a working year can carry a heavy Medicare cost two years later.
The 2.8% Social Security cost-of-living adjustment for 2026 also interacts here. For retirees close to a threshold, benefit increases and required minimum distributions can nudge MAGI over the line. Because Medicare premiums are typically deducted directly from Social Security checks, a couple hit with the top surcharge can see much of their COLA absorbed before it lands in the bank.
What Retirees Actually Do About It
Retirees generally have two levers to pull. First, income timing. Roth conversions, capital gains realizations, and large IRA withdrawals can be sequenced across tax years to stay under the next threshold, or done in bulk during a single year to accept one bad IRMAA year rather than several marginal ones. Second, appeals. If income has dropped because of a qualifying life-changing event, including retirement, loss of pension income, divorce, or the death of a spouse, Social Security accepts Form SSA-44 to recalculate IRMAA from current income rather than the two-year-old return.
Both levers reduce IRMAA rather than eliminate it, shrinking the number of households whose income two years ago no longer reflects what they are living on today.
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