A married couple, both 72, parked $400,000 in a one-year CD at 5% in early 2024. The interest hit their 2024 tax return, sat on top of Social Security and a pension, and then went quiet. In January 2026, their Medicare Part B premium arrived higher than last year’s. They assumed a standard cost-of-living bump. The real driver was IRMAA.
Social Security uses the tax return from two years prior to set today’s Medicare premiums. 2026 premiums run off 2024 income. If the CD interest tipped Modified Adjusted Gross Income (MAGI) over an IRMAA threshold, the surcharge shows up every month of 2026, on Part B and on Part D.
Who This Article Is Actually For
IRMAA reaches roughly 8% of Part B beneficiaries. The cliff for 2026 sits at MAGI above $109,000 for individual filers and above $218,000 for joint filers. A retiree with $55,000 in Social Security and pensions plus $12,000 in CD interest is nowhere near it. A joint filer already at $210,000 across Social Security, a pension, and RMDs who then added $20,000 of CD interest just crossed the line.
MAGI for IRMAA is AGI (Form 1040, line 11) plus tax-exempt interest (line 2a). The tax-exempt add-back is where readers get surprised: municipal bond income that feels tax-free still counts here. So does every dollar of CD interest, every RMD, and up to 85% of Social Security benefits.
The 2026 IRMAA Cost, Per Person
Standard 2026 Part B premium: $202.90 per month. Add the surcharges below on top of that.
| Individual MAGI (2024) | Joint MAGI (2024) | Part B Surcharge (monthly, per person) | Part D Surcharge (monthly, per person) |
|---|---|---|---|
| ≤ $109,000 | ≤ $218,000 | $0.00 | $0.00 |
| $109,001 to $137,000 | $218,001 to $274,000 | $81.20 | $14.50 |
| $137,001 to $171,000 | $274,001 to $342,000 | $202.90 | Higher tier |
| $171,001 to $205,000 | $342,001 to $410,000 | $324.60 | Higher tier |
| $205,001 to under $500,000 | $410,001 to under $750,000 | $446.30 | Higher tier |
| ≥ $500,000 | ≥ $750,000 | $487.00 | $91.00 |
For the couple in the opening: the first-tier Part B surcharge is $81.20 per month per person, and their total Part B premium rises to $284.10 per month per person. Add the Part D surcharge of $14.50 per month per person. The 5% CD they were proud of just handed a chunk of its interest back to Medicare.
Why This Is a 2026 Story
The Fed held the target rate at 4.5% or higher through mid-September 2025, which is why 5% one-year CDs were widely available in 2024. That window has closed. The fed funds upper bound now sits at 3.75%, and the FDIC national average 12-month CD rate is 1.65% as of June 2026. New CDs generate less taxable interest. The 2024 vintage still generates the income that drives 2026 IRMAA.
Two other pressures compound: the 2026 Social Security COLA of 2.8% raised every retiree’s benefit, pushing more of it into the 85% taxable band. IRMAA is also structured as a cliff. One dollar over $218,000 (joint) triggers the full first-tier surcharge.
The Survivor Trap and What SSA-44 Won’t Do
When one spouse dies, the survivor files single the following year. The single thresholds are roughly half the joint ones. The same household income can newly trigger IRMAA, or jump a tier, even though nothing about the portfolio changed. Widowed retirees holding 2024 CDs are the most exposed group.
Form SSA-44 lets you appeal IRMAA, but only for a qualifying life-changing event: work stoppage, work reduction, divorce, death of a spouse, loss of pension, or an employer settlement. Buying a CD is not a qualifying event. Neither is a Roth conversion or a home sale. If the CD interest drove MAGI over the line, SSA-44 will not reverse it.
What To Do Now
- Pull your 2024 Form 1040. Add line 11 and line 2a. If that number sits within $10,000 of $109,000 (single) or $218,000 (joint), you are the target of this article. Confirm the 2026 Part B amount deducted from your Social Security check matches the tier you land in.
- For 2026 income, focus on the cliff first. Because IRMAA is a two-year lookback, income earned this year sets 2028 premiums. If a maturing 2024 CD is rolling into new taxable interest, weigh Treasuries held to maturity, I-bonds, or municipals only after checking that the muni interest counts toward MAGI.
- File SSA-44 only if you had a qualifying event. Retirement, a spouse’s death, or loss of pension income in 2025 or 2026 can override the 2024 lookback. Attach the retirement letter, death certificate, or pension termination notice. Submit within the plan year the surcharge applies.
IRMAA recalculates every year. A one-time 2024 income spike from a maturing CD typically raises 2026 premiums and then falls off in 2027, assuming 2025 MAGI came back down. The savers who get hit twice are the ones who rolled the 5% CD into another high-yield instrument without checking where their MAGI landed.
Contact [email protected] for any questions or corrections.
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