A retired union electrician, 66, single, pulls a $52,000 defined-benefit pension, collects Social Security, and sits on roughly $760,000 in savings. That includes about $500,000 in a 401(k) and IRA and the rest in a brokerage account. In 2024 he pulled $40,000 from the 401(k) to buy a truck and redo a bathroom. Two years later, the Medicare bill arrived and the Part B premium was suddenly higher than his neighbor’s, who has the same pension. That is IRMAA, which catches many people off guard.
Roughly 8% of Part B enrollees ever pay the surcharge. But a pension in the $50,000s plus Social Security plus one lumpy withdrawal can easily trip the first tier.
IRMAA is a cliff. One dollar over a threshold moves you into the next bracket for the whole year. For 2026, a single filer with MAGI above $109,000 and up to $137,000 pays a Part B surcharge of $81.20 per month on top of the $202.90 standard premium, bringing the total to $284.10. Add the Part D surcharge of $14.50 per month and Tier 1 costs about $95.70 extra per month, or roughly $1,148 for the year. Cross into Tier 2 (over $137,000) and the Part B piece jumps to $202.90 in surcharge alone, with a total premium of $405.80, plus $37.50 for Part D.
MAGI includes municipal bond interest that felt tax-free. So does the taxable portion of Social Security, every dollar of pension, and every dollar of the 401(k) withdrawal.
How the Electrician Tripped It
Two years ago, the electrician received a pension of $52,000 and $30,000 in Social Security, of which about $25,500 is taxable. That is roughly $77,500 of MAGI in a normal year, comfortably under the $109,000 line. Add a $40,000 traditional 401(k) draw for the truck and the bathroom, and MAGI lands around $117,500. That crosses the first cliff.
Because IRMAA uses a two-year lookback, the 2024 tax return drives the 2026 premium. He wrote the check for the truck in 2024, filed in April 2025, and Social Security started deducting the higher premium from his January 2026 benefit.
This surcharge lasts only one year. If he does not repeat the withdrawal in 2025, his 2027 premium resets to standard. But if he pulls another $40,000 every year (for a new roof, a wedding, medical bills), the surcharge becomes recurring, and the math compounds against a Part B premium that rises annually.
Readers might assume they can appeal any IRMAA hit. SSA-44 covers only a MAGI reduction from a qualifying life-changing event: marriage, divorce, death of a spouse, work stoppage or reduction, loss of income-producing property, loss of pension income, or an employer settlement. A voluntary 401(k) withdrawal does not qualify, no matter how good the reason. Neither does a Roth conversion or a home sale.
What to Do Before the Next Draw
- Front-load large withdrawals into pre-Medicare years. Between retirement and age 65, and again before RMDs begin at 73, MAGI has room.
- Split big purchases across tax years. Take $20,000 in December and $20,000 in January. Two smaller MAGI bumps, each potentially under the cliff, beat one that lands $8,500 over.
- Fund one-off expenses from the brokerage first. A long-held taxable account throws off capital gains, not ordinary income, and the cost basis lowers MAGI impact compared with a traditional 401(k) dollar.
- Watch the survivor bracket. A married retiree filing jointly at $200,000 pays no surcharge; the same person filing single the year after a spouse dies pays Tier 2.
If your MAGI runs within $20,000 of the $109,000 single or $218,000 joint line, model the withdrawal before you take it. A fee-only planner who charges for the hour can be cheaper than a year of Tier 1 premiums, and much cheaper than accidentally landing in Tier 2.
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