The phone call usually comes in late January or early February. A client opens an envelope from Social Security, sees a Medicare premium notice that’s hundreds of dollars higher than they expected, and wants to know what happened.
What happened is IRMAA — the Income-Related Monthly Adjustment Amount. It’s a surcharge on Medicare Part B and Part D premiums for higher-income beneficiaries, and the timing of it is what makes it sting.
Here’s the mechanic. The standard Part B premium in 2026 is $202.90 per month. For households with modified adjusted gross income above $109,000 (single) or $218,000 (joint), an additional Part B surcharge gets layered on top, ranging from about $80 to nearly $490 per month, per person, depending on which income tier they fall into. A separate Part D surcharge applies as well. For a married couple both on Medicare and toward the higher tiers, the surcharges alone can run well over $10,000 a year — before any actual healthcare happens.
The catch is the two-year lookback. Your 2026 IRMAA is based on the income you reported on your 2024 tax return. For someone who retired in 2025, that means the first Medicare bill they receive is calculated on the income they earned in their final working year — typically a peak-earning year that doesn’t reflect their actual retirement income at all.
There’s also a cliff. The brackets aren’t a sliding scale. Being $1 over a threshold can mean hundreds — sometimes more than a thousand — in additional annual premiums per person. A modest year-end bonus, an unexpected capital gain, or a slightly larger IRA distribution can move you across a line you didn’t know was there.
What most retirees don’t realize is that there’s an appeal process designed for this exact situation. If a “life-changing event” caused income to drop — retirement, divorce, death of a spouse, loss of a pension, sale of a business — the SSA allows you to file Form SSA-44 and ask Medicare to use a more recent income figure instead of the two-year-old return. You have 60 days from the IRMAA notice to file. It’s one of the most underused tools in retirement income planning.
Beyond the appeal, IRMAA is the kind of line item that rewards planning ahead. Roth conversions, the timing of capital gains, charitable distributions from IRAs — each can shift a household into or out of a bracket. The decisions matter most in the few years before Medicare eligibility and the early years of retirement.
Like most retirement income decisions, this is a conversation worth having before the first notice arrives. Start that conversation now with one of our Shoreline partners.