A single 73-year-old woman with roughly $2.4 million in wealth, most of it locked inside a traditional IRA, is about to receive her first required minimum distribution check. The IRS takes its cut this year. Medicare takes a second cut two years from now. That second cut catches many people off guard.
The first RMD uses the IRS Uniform Lifetime Table. At age 73, the divisor is 26.5. Divide $2.4 million by 26.5 and the first RMD comes in near $91,000 of mandatory taxable income.
Federal income tax on that RMD is the smaller of the two bills. After the $16,100 single-filer standard deduction for 2026, most of the RMD lands in the 22% and 24% brackets. Assuming a modest Social Security check and a bit of brokerage income, her marginal rate sits at 24%.
The Two-Year Lookback That Doubles Her Medicare Bill
Medicare’s Income-Related Monthly Adjustment Amount (IRMAA) uses a two-year lookback. Her 2026 tax return determines her 2028 Medicare premiums. That return carries the $91,000 RMD, so this year’s forced withdrawal reprograms her Medicare bill for 2028, and every future RMD does the same on a rolling two-year lag.
Assume her 2026 MAGI lands somewhere between $140,000 and $160,000 once the RMD, taxable Social Security, and dividends are added up. That puts her in the third IRMAA tier for single filers, which covers MAGI above $137,000 and up to $171,000.
The 2026 standard Part B premium is $202.90 per month. Her tier adds an IRMAA surcharge of $202.90, taking total Part B to $405.80 per month. Part D adds another $37.50 monthly surcharge on top of her drug plan premium. Her Medicare bill effectively doubles, and it stays doubled every year MAGI sits in that band.
The One Move That Could Shrink MAGI
For a 73-year-old already inside RMD territory, the single most effective lever is the Qualified Charitable Distribution. A QCD sends money directly from the IRA to a qualified charity. The distribution counts toward her RMD, but it never appears in her adjusted gross income. If she planned to give $25,000 to her church or a food bank this year anyway, routing that gift through a QCD instead of writing a check from her brokerage keeps $25,000 out of MAGI. That substitution can drop her below the IRMAA cliff at $137,000 and cut her 2028 Part B premium roughly in half. It also skips the standard deduction problem entirely, since QCDs deliver the tax benefit even for non-itemizers. (To learn more, see our Medicare hidden bills briefing).
The second lever is Roth conversion. The RMD itself cannot be converted, but distributions beyond the RMD can. Converting $40,000 to $70,000 a year over the next several years shrinks the pre-tax base, which shrinks every future RMD and MAGI on a permanent basis. It also removes IRMAA risk for heirs who inherit the IRA under the 10-year rule.
Stacking a large conversion on top of the RMD in the same year risks pushing her into the next IRMAA tier, which starts at $171,000. So she needs to cap the conversion at the ceiling of the current tier.
Steps to Take
- Redirect the RMD through QCDs. Identify every dollar of charitable intent this year and route it from the IRA. Each dollar saves federal tax and reduces 2028 IRMAA exposure.
- Project MAGI this fall, well before the April filing scramble. Add the $91,000 RMD to Social Security and portfolio income. Find the nearest IRMAA ceiling. If she is $10,000 under a cliff, defer any discretionary income. If she is $10,000 over, a modest Roth conversion up to the next ceiling is nearly free from an IRMAA standpoint.
Managing this is complicated. A fee-only advisor who models IRMAA tiers alongside a multi-year conversion schedule typically pays for herself.
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