Why your income affects your Medicare costs: IRMAA explained

Medicare premiums are not the same for everyone. Higher-income retirees pay an IRMAA surcharge on top of standard premiums for Parts B and D. IRMAA (Income-Related Monthly Adjustment Amount) is based on your income from two years prior, so financial decisions like Roth conversions and large withdrawals can raise what you pay for healthcare down the road. That is why Medicare costs are best viewed as part of your overall retirement strategy, not in isolation.

Medicare is not one price for everyone

Many people assume Medicare costs the same for every retiree. It does not. Your premiums for Part B and Part D are tied to your income, and higher earners pay an IRMAA surcharge on top of the standard amount. IRMAA stands for Income-Related Monthly Adjustment Amount, and it applies once your modified adjusted gross income (MAGI) crosses certain thresholds.

That single fact connects your healthcare costs to decisions you might think are unrelated, like how and when you pull money from your accounts.

The 2026 IRMAA brackets at a glance

IRMAA is calculated using your MAGI from two years prior. For 2026 Medicare coverage, Social Security looks at your 2024 tax return. The brackets below show the 2026 Part B total monthly premium at each income level. A separate IRMAA surcharge also applies to Part D (prescription drug) plans. (Source: CMS, 2026 Medicare Parts A and B Premiums and Deductibles fact sheet, published November 14, 2025; Medicare.gov, current as of July 13, 2026. Figures apply to 2026 coverage and are adjusted annually.)

• Individual MAGI up to $109,000 (married filing jointly up to $218,000): standard Part B premium of $202.90/month, no IRMAA surcharge
• Individual MAGI $109,001 to $137,000 (MFJ $218,001 to $274,000): Part B total $284.10/month (surcharge $81.20), Part D surcharge $14.50/month
• Individual MAGI $137,001 to $171,000 (MFJ $274,001 to $342,000): Part B total $405.80/month (surcharge $202.90), Part D surcharge $37.50/month
• Individual MAGI $171,001 to $205,000 (MFJ $342,001 to $410,000): Part B total $527.50/month (surcharge $324.60), Part D surcharge $60.40/month
• Individual MAGI $205,001 to $499,999 (MFJ $410,001 to $749,999): Part B total $649.20/month (surcharge $446.30), Part D surcharge $83.30/month
• Individual MAGI $500,000 or more (MFJ $750,000 or more): Part B total $689.90/month (surcharge $487.00), Part D surcharge $91.00/month

For a deeper look at IRMAA, including how to appeal a determination and how Roth conversions interact with these thresholds, see our full guide: Medicare IRMAA Explained: What Triggers It and How to Avoid the Cliffs.

How your financial decisions ripple into premiums

Because IRMAA is based on your reported income from two years prior, the choices you make in one part of your plan can quietly affect another. A large withdrawal, a Roth conversion, or a year with extra capital gains can push your MAGI into a higher IRMAA tier and raise your Medicare premiums, often with that two-year lag.

Several common moves can influence what you pay:

• Roth conversions, which add to your taxable income in the year you make them
• Large or lumpy withdrawals from tax-deferred accounts
• Capital gains from selling investments or property
• The timing of when you claim income across different years

Why coordination matters

None of this means you should avoid Roth conversions or withdrawals. Many of those moves are genuinely valuable. It means they are worth coordinating, so a smart tax decision does not quietly create a larger healthcare bill. Looking at income, taxes, and IRMAA thresholds together usually leads to better outcomes than handling each one alone.

Healthcare is part of the bigger picture

The takeaway is not to fear your income. It is to recognize that healthcare costs are woven into your overall strategy. Choosing a Medicare plan is only one piece. The bigger opportunity is planning your income year by year so the pieces work together, and IRMAA thresholds are one of the reasons that coordination matters.

Frequently asked questions

What is IRMAA on Medicare?

IRMAA stands for Income-Related Monthly Adjustment Amount. It is a surcharge that higher-income Medicare beneficiaries pay on top of the standard Part B and Part D premiums. The surcharge is calculated using your modified adjusted gross income from two years prior.

Does my income affect how much I pay for Medicare?

Yes. Higher-income retirees pay an IRMAA surcharge on Medicare Part B and Part D premiums. The more income you report, the higher those premiums can be. For 2026 coverage, Medicare uses your 2024 MAGI to determine your IRMAA tier.

Can a Roth conversion increase my Medicare premiums?

It can. A Roth conversion adds to your taxable income in the year you make it, which may push your MAGI across an IRMAA threshold. Because IRMAA is based on income from two years prior, the effect on your premiums usually shows up two years later. That lag is one reason timing and coordination matter.