If You Retired This Year, the Medicare Premium Letter You Get in Late November Will Be Wrong, and Social Security Will Not Fix It Unless You Do
Social Security priced her 2027 Medicare premium off a salary she no longer earns, and the agency will keep collecting the overage every single month unless she takes one specific action before January.
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Sometime in late November, Social Security will mail a recent retiree a letter setting her 2027 Medicare premium. Picture a 66-year-old who left her job this spring. Her 2025 modified adjusted gross income, from her last full year of salary, fell between $137,000 and $171,000 as a single filer. Her retirement income now stands below $109,000. The letter prices her at the higher figure anyway. On the 2026 schedule, that bracket has a Part B premium of $405.80 a month instead of the $202.90 standard, plus $37.50 a month on top of her Part D plan premium.
The letter comes weeks after Social Security announced a 3.6% cost-of-living raise for 2027. For most retirees already collecting benefits, the agency takes Part B premiums out of the monthly check, so the surcharge eats into that raise before she ever gets it.
Why a Two-Year-Old Tax Return Sets Your 2027 Premium
Social Security sets the income-related monthly adjustment amount (IRMAA) using the latest tax return the IRS sends over. For 2027 premiums, that means your 2025 return. Your 2024 income set your 2026 premiums, and your 2026 income will set 2028’s. The agency applied the rule correctly. The rule just can’t see that your paycheck stopped.
The system catches up on its own only when a lower-income year finally becomes the lookback year. If your 2026 return still shows several months of salary, even 2028 could come in high. Nothing in between flags the drop for you.
Who Pays the Surcharge and Where It Starts
Only a small share of enrollees ever pay IRMAA. CMS’s 2026 schedule is the source for these figures. Your letter will quote 2027 amounts, which will differ in dollars. The structure remains the same.
| Single MAGI (2026) | Joint MAGI (2026) | Total Part B premium, monthly, per person | Part D surcharge, monthly, per person |
|---|---|---|---|
| $109,000 or less | $218,000 or less | $202.90 | $0.00 |
| Above $109,000 to $137,000 | Above $218,000 to $274,000 | $284.10 | $14.50 |
| Above $137,000 to $171,000 | Above $274,000 to $342,000 | $405.80 | $37.50 |
If your 2025 income came in under the first line, your letter has no surcharge. Above it, every enrolled spouse pays the surcharge separately. Here, MAGI means adjusted gross income plus tax-exempt interest. Municipal bond interest that escaped federal tax still counts toward it.
How Form SSA-44 Resets Your Number
Form SSA-44 asks Social Security to use a more recent tax year. Social Security lists retirement as a “work stoppage,” one of the qualifying life-changing events. Others include marriage, divorce, the death of a spouse, loss of income and an employer settlement payment. Voluntary income spikes never count. Your Roth conversion or home sale stays in the calculation however much it raised your MAGI.
Fill in three things:
- Event: Work stoppage, plus the month and year you stopped working.
- Income: Your estimated MAGI and filing status for the year you want used. For 2027 premiums, that is the current year or the prior year, meaning 2027 or 2026. If 2026 still includes months of salary, 2027 is usually your better year. Social Security also asks for an estimate covering the next premium year, and if you leave it blank, it reuses your first estimate.
- Proof: A retirement letter or employer statement. Social Security also takes your signed attestation under penalty of perjury.
Upload the form through your my Social Security account, or fax or mail it to a local office with your evidence. Social Security processes the request using your estimate, then asks for a signed copy of the tax return once you file it. One catch for couples: a filing covers only the beneficiary reporting. If both spouses retired, each files a separate form.
What Doing Nothing Costs Every Month in 2027
If she skips the form, our retiree pays $405.80 for Part B and an extra $37.50 for Part D every month from January through December 2027. Her actual income places her at $202.90 with no Part D add-on. A couple in the same level pays that gap twice. Don’t count on a refund later, either. Relief for a prior premium year usually requires an event in the last three calendar months of that year and a request by March 31.
IRMAA is only one of several Medicare costs that quietly scale with income, and the surcharges linked to a two-year-old return are the kind of trap we reported for readers through Medicare’s hidden bills.
- Check the tax year on the letter. If your estimated 2026 or 2027 MAGI drops you into a lower level, file SSA-44 once the letter comes. Social Security will not act until you do.
- Get your retirement letter from HR now. Ask for one that states your separation date, so you have the evidence ready when the notice comes.
- Hold off on big conversions in the estimate year. A Roth conversion in your first low-income year raises the MAGI on your SSA-44 estimate and can put you right back in a surcharge level. The form can’t reverse that.
Contact [email protected] for any questions or corrections.
Jake has been been working in financial media for almost 15 years. He focuses on all things personal finance for 24/7 Wall St. with high hopes to educate and entertain. Most recently, Jake spent 12 years working various roles at The Motley Fool. He started copy editing fool.com content, worked on premium and marketing campaigns, and helped launch The Ascent, a personal finance brand.
His work has been featured on platforms like MSN, Yahoo Finance, USA Today, and more. He's written about credit cards, social security, ETFs, savings accounts, and just about anything else you can imagine when thinking about money. Jake love to cook, play golf, and tell people he's never had a cavity. (It's true!)
