Medicare IRMAA (Income-Related Monthly Adjustment Amount) is a surcharge that higher-income retirees pay on top of the standard Medicare Part B and Part D premiums. In 2025, the surcharge kicks in when your modified adjusted gross income from two years ago exceeds $106,000 for single filers or $212,000 for married filing jointly. At the highest income tier — above $500,000 single — your total Part B premium reaches $628.90 per month.
Quick answer: IRMAA is based on your income from two years prior (2024 income for 2026 Medicare). Most retirees pay the standard $185.00/month Part B premium with no surcharge. If you are above the threshold, surcharges range from $74.00 to $443.90 extra per month per person.
2025 IRMAA Brackets — Medicare Part B
The table below shows the 2025 IRMAA thresholds (based on 2023 MAGI). Medicare and SSA use a two-year lookback: your 2026 IRMAA will be determined by your 2024 income and announced by CMS in autumn 2025.
| 2023 MAGI — Single | 2023 MAGI — Married Filing Jointly | 2025 Part B Monthly Premium |
|---|---|---|
| ≤ $106,000 | ≤ $212,000 | $185.00 (no surcharge) |
| $106,001 – $133,000 | $212,001 – $266,000 | $259.00 (+$74.00) |
| $133,001 – $167,000 | $266,001 – $334,000 | $370.00 (+$185.00) |
| $167,001 – $200,000 | $334,001 – $400,000 | $480.90 (+$295.90) |
| $200,001 – $500,000 | $400,001 – $750,000 | $591.90 (+$406.90) |
| Above $500,000 | Above $750,000 | $628.90 (+$443.90) |
Married filing separately thresholds differ — single filer amounts apply once income exceeds $106,000.
2025 IRMAA Brackets — Medicare Part D
Part D (prescription drug coverage) carries a separate IRMAA surcharge paid directly to Medicare — not to your drug plan. The monthly amounts below are for 2025:
| 2023 MAGI — Single | 2023 MAGI — Married Filing Jointly | Additional Monthly Amount |
|---|---|---|
| ≤ $106,000 | ≤ $212,000 | $0.00 |
| $106,001 – $133,000 | $212,001 – $266,000 | $13.70 |
| $133,001 – $167,000 | $266,001 – $334,000 | $35.30 |
| $167,001 – $200,000 | $334,001 – $400,000 | $57.00 |
| $200,001 – $500,000 | $400,001 – $750,000 | $78.60 |
| Above $500,000 | Above $750,000 | $85.80 |
How IRMAA Works: The Two-Year Lookback
The Social Security Administration (SSA) determines your IRMAA tier using your tax return from two years prior. This means:
- Your 2026 Medicare premiums are set by your 2024 income
- Your 2025 Medicare premiums were set by your 2023 income
SSA typically uses your MAGI from your most recent tax return on file. MAGI for IRMAA purposes includes:
- Wages, self-employment income, rental income, and business income
- Taxable Social Security benefits
- Capital gains, dividends, and interest
- IRA withdrawals and 401(k) distributions
- Tax-exempt interest from municipal bonds (added back)
What is NOT included: Roth IRA withdrawals, TFSA/Roth conversions after age 70½ (though Roth conversions in earlier years affect past MAGI), and qualified distributions from health savings accounts.
Worked Example: IRMAA Impact for a Retired Couple
Mark and Susan are both retired, both enrolled in Original Medicare. In 2023, their combined MAGI was $280,000 — joint income from pension, IRA withdrawals, and Social Security.
With $280,000 in joint income, they land in Tier 2:
| Coverage | 2025 Monthly Premium Each | Annual Cost Each | Annual Cost Combined |
|---|---|---|---|
| Part B (Tier 2) | $370.00 | $4,440 | $8,880 |
| Part D (Tier 2 estimated) | $35.30 | $424 | $848 |
| Total IRMAA cost | — | — | $9,728/year |
If their 2023 MAGI had been $265,000 (just below $266,000 threshold), they would have stayed in Tier 1 and paid $259.00 each for Part B — saving the couple $2,664/year. Income management matters.
How SSA Notifies You of IRMAA
SSA sends an IRMAA determination letter (called an Initial Determination Notice) each autumn for the following year’s Medicare premiums. If you are enrolled in Medicare, you do not apply — SSA calculates your IRMAA automatically based on IRS data.
If you disagree with the determination, you can:
- Request reconsideration if you believe SSA used the wrong income figures
- File an appeal citing a life-changing event (see section below)
How to Appeal IRMAA: Life-Changing Events
If your income dropped significantly since the reference year, you may be eligible to use a more recent year’s income. Qualifying life-changing events (LCEs) include:
- Retirement or reduction in work hours
- Death of a spouse
- Divorce or annulment
- Loss of income-producing property (fire, flood, disaster)
- Loss of pension income
- Employer settlement payment
To appeal, complete Form SSA-44 (Medicare Income-Related Monthly Adjustment Amount — Life Changing Event) and submit it to your local SSA office. You will need evidence of the event and your estimated income for the current year.
5 Strategies to Reduce or Avoid IRMAA
1. Manage Roth Conversion Timing
Large Roth IRA conversions spike MAGI in the conversion year, which raises IRMAA two years later. Plan conversions before age 63 or structure them below the tier thresholds to avoid crossing into a higher IRMAA bracket. Read our Roth conversion guide for step-by-step planning.
2. Use Qualified Charitable Distributions (QCDs)
Once you turn 70½, qualified charitable distributions allow you to donate directly from your IRA to charity — up to $108,000 per year — without the withdrawal counting as MAGI. This strategy simultaneously reduces your RMD and keeps IRMAA in check.
3. Time Capital Gains Harvesting
Selling appreciated assets in a high-income year can push you into a higher IRMAA tier. Work with a tax planner to harvest capital gains in years when other income is lower.
4. Maximise Tax-Exempt Income
Invest in municipal bonds or municipal bond funds for interest that is not counted as ordinary income (though tax-exempt interest IS added back to MAGI for IRMAA — so this strategy has limits).
5. Delay IRA Withdrawals (Where Possible)
If you retire before 65 and do not yet need Medicare, use taxable accounts or Roth accounts to fund living expenses and delay IRA withdrawals. Qualified Roth IRA withdrawals do not add to MAGI.
IRMAA and Married Filing Separately
Married couples who file separately face harsh IRMAA treatment. The thresholds for married filing separately mirror those for single filers — not the joint thresholds. In 2025, any married-filing-separately filer with MAGI over $106,000 pays the Tier 1 surcharge. This makes filing separately costly for Medicare beneficiaries.
Does IRMAA Apply to Medicare Advantage?
Yes. Medicare Advantage (Part C) enrollees still pay the standard Part B premium plus any IRMAA surcharge directly to Medicare. The Advantage plan’s own premium is separate. If your Advantage plan includes prescription drug coverage, the Part D IRMAA surcharge also applies.
What Happens If You Miss the IRMAA Deadline?
If you receive an IRMAA determination and do nothing, the surcharge is automatically deducted from your monthly Social Security benefit. There is no penalty for not appealing — you simply continue to pay the higher premium. You may appeal at any time during the calendar year if circumstances change.
Related Medicare and Retirement Resources
- Medicare & HSA Guide 2026 — full coverage overview
- Required Minimum Distributions (RMDs) 2026 — RMD rules and calculator
- Roth Conversion Guide — strategic conversions to reduce MAGI
- Social Security Tax Guide — how Social Security benefits are taxed
- Health Insurance Guide — all health coverage types explained
IRMAA is an often-overlooked retirement cost. Planning ahead by managing your MAGI in the two years before Medicare enrolment — particularly around Roth conversions, capital gains, and IRA withdrawals — can save thousands of dollars annually in reduced surcharges.
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