An unexpected jump in Medicare premiums can catch retirees by surprise and disrupt their carefully planned budgets. The culprit? The Medicare Income Related Monthly Adjustment Amount, commonly known as IRMAA.
Many retirees first learn about IRMAA only after they get a letter from Social Security saying their Medicare premiums will increase, or on a bill, often long after the income that caused it. With 2026 shaping up to be an important year for Medicare costs, now is the time to understand how IRMAA works and what it may mean for your retirement budget.
What Is IRMAA?
Contrary to popular belief, IRMAA isn’t a penalty. Instead, it’s a premium that is applied to Medicare Part B (medical insurance) and Medicare Part D (prescription drug plans) for people who earn above a certain threshold.
Even though it’s not a penalty, IRMAA can create an unpleasant surprise if you aren’t expecting it. That’s why it’s critical to understand what counts as income, how the IRMAA two-year lookback works, and what changes may occur in 2026.
How Past Income Affects Medicare IRMAA in 2026
IRMAA is an additional charge added to Medicare Part B and Part D premiums for people whose income is above certain thresholds. IRMAA premiums are based on a two-year lookback of your modified adjusted gross income (MAGI), which includes:
- Wages and salaries
- Self-employment income
- Social Security benefits (taxable portion)
- Required minimum distributions
- Roth conversions
- Traditional IRA withdrawals
- Capital gains
- Dividends and interest
- Rental income
- Taxable refunds
- Business income
Your 2026 IRMAA will be based on your 2024 MAGI, meaning any conversions, asset sales, or substantial withdrawals from 2024 can cause higher premiums in 2026.
Medicare Part B & D IRMAA Brackets for 2026
If your income places you in a higher IRMAA bracket, the adjustment will be added directly to your Medicare premium. In 2026, the standard Part B premium is $202.90, but with IRMAA, your total monthly premium could range from $284.10 to $689.90. If you owe IRMAA for Part D, you may pay an additional $14.50 to $91 per month. Check out the 2026 IRMAA tiers based on information from the Centers for Medicare and Medicaid Services.
| If your income was the following in 2024… | You will pay this each month in 2026 for Medicare Part B & D | |||
| Individual | Joint Tax Return | Married & Separate Tax Return | Medicare Part B Premium | Medicare Part D Costs |
| Less than or equal to $109,000 | Less than or equal to $218,000 | Less than or equal to $109,000 | $202.90 | Your plan premium |
| Over $109,000 and less than or equal to $137,000 | Over $218,000 and less than or equal to $274,000 | N/A | $284.10 | $14.50 plus your plan premium |
| Over $137,000 and less than or equal to $171,000 | Over $274,000 and less than or equal to $342,000 | N/A | $405.80 | $37.50 plus your plan premium |
| Over $171,000 and less than or equal to $205,000 | Over $342,000 and less than or equal to $410,000 | N/A | $527.50 | $60.40 plus your plan premium |
| Over $205,000 and less than or equal to $500,000 | Over $410,000 and less than or equal to $750,000 | Over $109,000 and less than or equal to $391,000 | $649.20 | $83.30 plus your plan premium |
| More than or equal to $500,000 | More than or equal to $750,000 | Over or equal to $391,000 | $689.90 | $91 plus your plan premium |
What Could Push You into a Higher IRMAA Tier in 2026
Several factors cause 2026 to be a year when you could find yourself in a higher IRMAA tier. Some of the most common triggers to watch for are explained below:
1. Inflation Adjustments
IRMAA thresholds are tied to inflation. Due to higher-than-normal inflation, threshold adjustments may not keep pace with retirees’ rising income.
2. Additional Triggers
Retirees should be mindful of these common income events that could increase 2026 IRMAA:
- Large required minimum distributions (RMD)
- Roth conversions completed in 2024
- Capital gains from selling property or investments
- Lump-sum pension payouts
- One-time inheritances or asset sales
- Part-time work or consulting income
Even minor income events can push someone into a higher tier.
How to Appeal an IRMAA Decision
The Social Security Administration offers an appeals process for qualified events, such as:
- Retirement or reduction of work
- Marriage or divorce
- Death of a spouse
- Loss of income-producing property
- Loss of pension income
If approved, your IRMAA amount may be recalculated based on your current income rather than the two-year lookback.
FAQs
Can IRMAA change during the year?
Yes. If you file an appeal and it is approved, or if your tax return is updated, your IRMAA can be revised.
Does Roth IRA income impact IRMAA?
Qualified Roth withdrawals do not increase MAGI, but Roth conversions do.
Will premiums increase if my spouse and I file jointly?
If your joint income places you in a higher tier, both spouses pay the corresponding IRMAA surcharge.
Does IRMAA apply to Medicare Advantage?
If your Medicare Advantage plan includes Part D coverage, the Part D IRMAA surcharge still applies.
Stay Ahead
Understanding how IRMAA works can help you avoid surprises and plan with more confidence. By monitoring your income and staying aware of potential triggers, you can make decisions that better support your long-term Medicare costs.
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