If your annual income exceeds $103,000, you may be paying significantly more for Medicare than you bargained for. This overlooked surcharge, known as the Income-Related Monthly Adjustment Amount (IRMAA), catches many retirees off guard.
IRMAA is an extra fee added to Medicare Part B and Part D premiums for higher-income beneficiaries. The surcharge is based on your modified adjusted gross income from two years prior — a two-year lookback that can result in unexpected costs if you had a one-time spike in income, such as from selling a home or cashing out a retirement account.
2026 IRMAA Brackets
For 2026, the income thresholds are:
- Individual income $103,000 or less / Joint income $206,000 or less: Standard premium (no surcharge)
- Individual $103,001–$165,000 / Joint $206,001–$330,000: Part B premium increases by $70–$100 per month, plus additional Part D surcharges
- Individual $165,001–$500,000 / Joint $330,001–$750,000: Surcharges escalate up to $400+ per month
- Individual over $500,000 / Joint over $750,000: Maximum surcharge, adding several hundred dollars per month
The Cliff Effect
IRMAA operates on a cliff structure: earning even $1 above a threshold pushes you into the next bracket, triggering the full surcharge for that tier. There is no gradual increase.
How to Appeal
If your income has dropped significantly due to a life-changing event (retirement, divorce, death of a spouse, loss of income from a job), you can file an IRMAA appeal using Social Security Form SSA-44. You'll need to provide documentation of the change, such as a retirement letter or tax return showing reduced income.
Planning Ahead
To avoid surprises:
- Monitor your modified adjusted gross income two years before Medicare eligibility.
- Consider Roth IRA conversions in low-income years to avoid future surcharges.
- Be mindful of capital gains realization, as a single large gain can trigger IRMAA.
Understanding IRMAA can save you thousands in unnecessary Medicare costs. Consult a financial advisor to strategize around these income thresholds.