He Retired From Ironwork in June. Medicare’s 2027 Letter Will Price Him on the $180,000 He Earned During His Last Overtime Year
His best-paid year ever is about to follow a retired union ironworker into Medicare, and the surcharge notice arriving this fall will be priced on income he no longer earns. One form exists to fight it, but most retirees never…
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A 67-year-old union ironworker spent 2025 on a major bridge job, and overtime pushed his income to $180,000. He worked part of 2026, retired in June, and expects about $60,000 of income in 2027. This fall, a Social Security letter will set his 2027 Medicare premium. It will base that premium on the busiest, best-paid year of his career, a year that no longer matches his life.
Other new retirees are running into the same wall. On Reddit’s r/SocialSecurity, one of them asked whether to file for relief before the surcharge notice even arrived: “I have a letter from my employer stating that I retired on June 30, 2026 and have my last pay statement.”
He has proof that the paychecks stopped. The next step is getting Social Security to price his Medicare coverage appropriately.
Why an Accurate Tax Return Produces a Stale Premium
Social Security sets the income-related monthly adjustment amount (IRMAA) using modified adjusted gross income (MAGI) from two years before the premium year. For 2027 premiums, that means his 2025 return. MAGI is adjusted gross income (AGI) plus tax-exempt interest, including municipal bond interest.
His salary and overtime have ended, but the lookback carries them into 2027. The return is correct. The picture it paints is already out of date.
Most people on Medicare never deal with this. CMS says IRMAA affects about 8% of Part B enrollees. Someone filing individually whose MAGI is at or below $109,000 pays the standard 2026 Part B premium of $202.90 and no Part D surcharge.
What $180,000 Costs Him in Surcharges
CMS released the 2026 figures on November 14, 2025. The 2026 schedule below is the best stand-in for 2027 rates, shown for a single filer.
| 2025 MAGI (single filer) | Part B surcharge (monthly, per person) | Part D surcharge (monthly, per person) | Combined surcharge (annual, per person) |
|---|---|---|---|
| $109,000 or less | $0.00 | $0.00 | $0 |
| Above $137,000 to $171,000 | $202.90 | $37.50 | $2,884.80 |
| Above $171,000 to $205,000 | $324.60 | $60.40 | $4,620 |
At $180,000, his Part B surcharge would be $527.50 a month, along with a Part D surcharge. Together they total $385 a month, or $4,620 each year. He’d pay that on top of income tax already owed on the overtime. Just under the next bracket would cost $240.40 a month. At $60,000, he would owe no surcharge.
Retirement Qualifies as a Work Stoppage on Form SSA-44
Social Security lets beneficiaries request lower IRMAA after a life-changing event that reduced income. Qualifying events include getting married or divorced, losing a spouse, and loss of income. Form SSA-44 lists “Work Stoppage” as a qualifying event, and retirement counts. This lets him ask the agency to use his recent, lower income instead of waiting two years for it to appear on his tax records.
He should submit:
- Form SSA-44, uploaded through his my Social Security account or faxed or mailed to a local office.
- A union or employer letter confirming his June retirement date, plus his final pay stub.
- The IRMAA notice itself.
- An estimate of his MAGI for the year his income dropped.
The form only covers income drops that happen to you. If he does a Roth conversion or sells a property in retirement, that income stays on the bill no matter how much it raises his MAGI.
Six Months of Overtime Can Still Trip a Bracket
Retiring doesn’t automatically drop him below IRMAA thresholds. His 2026 estimate must include six months of wages, his pension, taxable IRA withdrawals, investment gains, tax-exempt interest, and any vacation payout or severance. If these push him past $109,000, SSA-44 moves him down a tier but may still leave a surcharge. His 2028 premium will reflect the actual 2026 return, so he may need to file again using his 2027 estimate.
Three Moves to Make Before the 2027 Bill Arrives
- Check the tax year printed on the notice. If it says 2025, the premium reflects his final overtime year. He doesn’t have to accept that number.
- File SSA-44 as soon as the notice lands. Attach the retirement letter. One Reddit poster said processing took about 2.5 months, and another got a refund for the extra charges after the appeal went through.
- Build his 2026 MAGI estimate line by line. If he lands within $20,000 of a threshold, he should push optional IRA withdrawals and capital gains into 2027. At about $60,000 of projected income, that year has plenty of room under the thresholds.
His last overtime year belongs on his 2025 return. It doesn’t have to follow him onto his 2027 Medicare bill.
Contact [email protected] for any questions or corrections.
Gerelyn Terzo is the author of dividend investing handbook "Dividend Investing Strategies: How to Have Your Cake & Eat It Too." A veteran financial journalist, she covers agri-finance for outlets like Global AgInvesting and the broader stock market and personal finance for 24/7 Wall Street. She began at CNBC and later helped launch Fox Business in New York. Gerelyn currently resides in Woodland Park, Colorado and dabbles in nature photography as a hobby.
