3 Ways IRMAA Can Impact Your Medicare Costs
Medicare IRMAA surcharges can materially change retirement cash flow — often unintentionally. This video walks through how modified adjusted gross income (MAGI) drives Medicare Part B and Part D premiums, why more retirees are being pulled into IRMAA brackets, and how ordinary planning decisions (like investment sales, retirement withdrawals, and filing status) can trigger higher monthly costs.
Real-world scenarios illustrate how IRMAA affects married couples, surviving spouses, and single filers, with a clear focus on income thresholds, bracket management, and longevity in retirement, without hype or promises.
3 Ways IRMAA Can Impact Your Medicare Costs:
1. The one-time income trap: IRMAA costs are calculated on your income from two years ago. In 2026, IRMAA is based on your income for 2024. If you had a large capital gain, did a Roth Conversion, a sale of a business or some large one-time event, IRMAA may be triggered.
2. The IRMAA brackets are cliffs, not slopes. If you exceed your bracket by one dollar, you are pushed into the next bracket of costs. Be careful!
3. The surviving spouse problem. After the death of a spouse, the surviving spouse will likely see a reduction is social security income. In some cases, the surviving spouse may pay just as much as the both spouse paid in the past!
Key Takeaways:
- IRMAA affects a growing share of Medicare recipients, and costs are rising
- Small income increases may trigger large Medicare premium jumps
- Married filing jointly vs. single filer rules could change the math dramatically
- Surviving spouses might face near-identical IRMAA costs as couples
- Ongoing monitoring matters more than one-time tax planning
3 Ways IRMAA Can Impact Your Medicare Costs – Links
Catch all our Mullooly Asset videos here
Subscribe to the Mullooly Asset YouTube Channel
Watch this episode (“3 Ways IRMAA Can Impact Your Medicare Costs”) on our YouTube Channel
The 2025 Medicare Trustees Report
3 Ways IRMAA Can Impact Your Medicare Costs – Transcript
The more income that you show in retirement, the higher this IRMAA income related monthly adjustment amount could possibly be. And we’re going to run through some examples.
In 2026, there are roughly 67 million people in the United States who are on the Medicare plan. One in 10 or about 10% of those folks that are receiving Medicare are subject to IRMAA costs.
And this number continues to go up every year. In fact, the trustees report, the Medicare Trustees report that came out last year, it’s 267 pages.. it’s not a short read, but they estimate that IRMAA costs are going to increase by 30% over the next three years.
And so I expect that more people will fall into this IRMAA bracket or this IRMAA net.
…the surcharge, that needs to be paid.
Not only will they be paying more, MORE people will be paying more. But I believe that the costs will also go up because Medicare premiums are determined by the overall cost of medical care.
It’s not like, your social security goes up by the rate of inflation per year, so that gets set every year.
But medical costs… don’t stick to those kind of parameters.
They just… it seems to go up at their own rates every single year.
You can see that if your income as a single filer exceeds $109,000, this is your modified adjusted gross income, you are going to be paying the standard Medicare premium, which is $202.90 cents.
But once you go over that $109,000 in modified adjusted gross income, you’re going to see that you will be paying more.
In fact, the first bracket shows that you’ll be paying $284.10 cents, just for Part B. That’s the Part B premium.
And you’ll also be paying $14.50 cents for Part D.
So you’ll be paying almost $300 per month as your Medicare premium, plus the IRMAA surcharge.
You’ll notice on the married filing jointly columns that the numbers are doubled.
So $109,000 becomes $218,000 in modified adjusted gross income.
And that bracket goes up to $274,000 in modified adjusted gross income.
But the costs are virtually the same.
In that first bracket… the Medicare premium now jumps to $284.10 cents and $14.50 cents, per filer.
That is per filer, per month, per filer.
So a married filing jointly couple will be paying roughly $600.
And that gets deducted from your Social security payment.
Say you’re 65 or 66, you not have not yet started collecting social security. You get a bill from Medicare for these numbers.
But let’s put this all into a scenario and see how this is going to impact someone, with real numbers.
In this first scenario, we’ve got a married couple, filing jointly.
So they have a pension that comes in about $3,500 per month. They’ve got $42,000 in taxable income there.
They both receive social security – combined, that is $68,000.
So they’re bringing in $5,666 per month between the two of them, and that’s about $68,000.
Now when you’re calculating your modified adjusted gross income, 85% of your social security income is considered taxable, not the whole thing.
So their taxable portion of this will be $57,800.
They receive interest and dividends, $30,000.
And they withdrew $75,000 from retirement accounts… pre-tax retirement accounts.
So their gross income is $215,000.
And their modified adjusted gross income is $204,800.
At this point, they are not subject to IRMAA. Because the first bracket where IRMAA kicks in for a married couple filing jointly is $218,000.
However, before the end of the year 2024, they decided that they were going to sell a few investments.
…for whatever reason – they needed the money, or they just wanted to take some profits on different investments.
And so the taxable portion of the sale worked out to be $18,000.
$222,800 is now their modified adjusted gross income. This is just enough to make them now subject to IRMAA.
And so their costs will now be $298.60 cents – times two, because they’re married filing jointly.
And so they’ll have a Medicare surcharge of nearly $600 per month.
This is the part though, that a lot of people don’t talk about — what happens with a Medicare surcharge and IRMAA, AFTER one spouse passes away??
Let’s go and look at this scenario.
After the first spouse passes away, the numbers really don’t change all that much.
The pension, because they had a hundred percent joint annuity, on their pension, that stays the same.
So they’re still collecting… the surviving spouse… collects $3,500 a month or $42,000.
Social security gets cut in half. So they’re now receiving, instead of 68,000, they’re now getting $34,000 a month.
The taxable portion for modified adjusted gross income is 85% of that number, or $28,900.
They still receive the same interest in dividends.
They’re still taking money from retirement accounts, whether it’s due to RMDs or they need this to cover living expenses.
So the surviving spouse now shows modified adjusted gross income of $175,900 at this point.
They are now subject to… the surviving spouse is now subject to IRMAA.
And the cost — just for one person — will be $587.90 cents per month.
Virtually the same cost as it was for two, will now be the cost for one.
And if they decided to, if the surviving spouse decided to go ahead and still sell stocks — to either realize a profit, or take money out to buy a car, then in this scenario, the taxable gain from the sale is the same as in the first scenario, another $18,000.
This increases the modified adjusted gross income. But look at what does NOT happen.
So the IRMAA cost did not increase. It stayed the same as it was.
And so you want to be cognizant of the fact that there are brackets here that we can stay within.
This is why you want to work with your planner, as the year goes on, to see where your income is lining up.
A single filer can go from $171,000. in modified adjusted gross income, up to $205,000 and the cost is $527 per month.
It’s a lot of money. But look what happens when you exceed $205,000.
The income, the modified adjusted gross income now jumps up, the cost for Part B, alone goes from $527 a month to almost $650 a month.
This is why you need to be working with a planner.
And measure your numbers as you’re going throughout the year.
These numbers get reset every single year.
So it’s important to stay on top of this and work with someone who is cognizant of these things happening.
