A 70-year-old retired federal employee has a straightforward question. His Social Security cost-of-living adjustment would offset any Medicare Part B premium increase, right? The hold-harmless rule would protect him. He had roughly $1.1 million in his Thrift Savings Plan, a $40,000 FERS pension, and Social Security, and he assumed the same rule that shields most retirees would shield him too.
It will, but only until the year he turns 73.
The Social Security hold-harmless provision caps the dollar increase in a beneficiary’s Part B premium at the dollar increase in their Social Security check from the annual COLA. In practice, your net Social Security deposit cannot fall from one year to the next because Medicare premiums rose faster than your COLA. In 2026, the COLA came in at 2.8%, and the standard Part B premium moved to $202.90 per month. For most beneficiaries, hold-harmless absorbed the gap.
The rule carves out two groups: new enrollees, and anyone paying an Income-Related Monthly Adjustment Amount (IRMAA). Roughly 8% of Part B beneficiaries pay IRMAA, and that exclusion is the one that catches high-balance TSP holders.
The RMD at 73 That Changes the Math
Under current law, required minimum distributions from the TSP begin at age 73. On the day the first RMD lands, the picture shifts.
His FERS pension runs about $40,000. Add taxable Social Security. Add a first-year RMD calculated against a $1.1 million balance. For a single filer, the first IRMAA tier starts at MAGI above $109,000. The RMD alone lifts him over that line.
Once he crosses it, Part B climbs from $202.90 to $284.10 per month, an IRMAA surcharge of $81.20. Part D adds another $14.50 monthly surcharge on top of whatever his drug plan charges. If the RMD pushes him into the next tier (MAGI above $137,000 single), Part B totals $405.80 monthly and the Part D surcharge grows to $37.50.
And because he is now an IRMAA payer, hold-harmless no longer applies to him. Any future Part B increase lands in full, whatever his COLA does. IRMAA uses a two-year lookback: 2026 income drives 2028 premiums, so the first RMD year sets the surcharge two Januarys later.
The TSP-Specific Wrinkle
The TSP does not permit qualified charitable distributions, a detail federal retirees might miss. A QCD lets someone aged 70½ or older send money directly from an IRA to a qualified charity, and the distribution never enters MAGI. It is a great tool for trimming RMD-driven income under an IRMAA cliff. But it works only from an IRA. TSP money has to be rolled to a traditional IRA first.
Roth conversions face the same friction. In-plan Roth options inside the TSP are limited; a traditional IRA gives full control over conversion size, timing, and withholding.
Three Actions Before 73
Roll a meaningful portion of the TSP to a traditional IRA. That unlocks QCDs at 70½ and opens clean Roth conversion mechanics. You can keep some balance in the TSP if the G Fund matters to the fixed-income sleeve, but move enough to run the next two moves.
Run partial Roth conversions between now and age 73. Every dollar converted at today’s brackets is a dollar that will not sit in the traditional balance generating a future RMD. Fill the 22% or 24% federal bracket, but stay below the $109,000 single-filer MAGI line. A conversion that crosses the line saves RMD tax later but triggers the first-tier IRMAA surcharge two years out.
Model MAGI against IRMAA cliffs every October, before year-end tax moves are locked. A retiree who lands even $500 over a threshold pays the full tier surcharge for the year. If projected MAGI sits within roughly $10,000 of a cliff, defer discretionary income (delay a capital gain, pause a Roth conversion) or accelerate a deduction (QCD from the IRA, bunched charitable giving) to stay under.
Hold-harmless is a real protection, and it will do its job for most beneficiaries. For the federal retiree with a seven-figure TSP, it is a floor that disappears at 73. What he does between 70 and 73 decides whether he pays $202.90 a month or a lot more.
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