2026 IRMAA Part D Brackets (Source: CMS.gov)

In addition to Part B surcharges, IRMAA also increases your Part D (prescription drug) premium. The 2026 Part D surcharge amounts by income tier are shown below. These amounts are added on top of your plan’s standard Part D premium.

Please visit CMS.gov for the most current information and, as always, seek the guidance of a certified tax adviser.

How and When Are IRMAA Fees Paid?

IRMAA surcharges are added directly to your Medicare Part B and Part D premiums. For retirees receiving Social Security benefits, the premiums — including any IRMAA surcharges — are deducted automatically from their monthly checks. This reduction in Social Security income can significantly affect monthly cash flow and create an unexpected financial burden. The good news: there are proactive steps you can take to minimize the impact of IRMAA.

Strategies to Minimize the Impact of IRMAA

1. Tax-Efficient Withdrawals

Strategies such as Roth IRA conversions can reduce taxable income over time, as qualified withdrawals from Roth accounts are not included in MAGI. Additionally, utilizing funds from Health Savings Accounts (HSAs) — which offer triple tax advantages — can help pay for medical expenses without affecting MAGI. Properly sequencing withdrawals from taxable, tax-deferred, and tax-free accounts (such as loans against a cash value life insurance policy) can also smooth out income levels and help you avoid IRMAA bracket spikes. Learn more about wealth management and how it fits into a complete retirement strategy. Planning these conversions in the years before Medicare eligibility at age 65 is particularly effective, as those years directly feed the two-year MAGI lookback.

2. Timing of Income

Careful timing of income recognition is a critical strategy. One-time events — such as selling a property, cashing out stock options, or taking large distributions from tax-deferred accounts — can push MAGI above an IRMAA threshold. To mitigate this, consider spreading such events over multiple years or deferring them to years when income is expected to be lower. Charitable giving strategies such as Qualified Charitable Distributions (QCDs) from IRAs can also reduce taxable income while supporting philanthropic goals. QCDs allow you to direct up to $105,000 per year (2026 limit) directly from your IRA to a qualifying charity — reducing your MAGI dollar-for-dollar without affecting your standard deduction.

3. Annuities (FIAs)

Fixed Indexed Annuities (FIAs) can serve as a reliable income source that helps offset the costs associated with IRMAA. FIAs can provide a guaranteed income stream and offer growth potential linked to market indexes without the risk of direct investment losses. By using benefits such as guaranteed lifetime income, clients can reduce their reliance on Social Security and better manage overall cash flow.

4. Cash Value Life Insurance (FIULs)

Fixed Indexed Universal Life Insurance (FIUL) can also provide indexed market growth without the risk of investment losses. FIUL can serve as a reliable and tax-free income source during retirement, as it allows the policy owner to draw from the cash value each year in the form of a policy loan — without increasing MAGI or triggering IRMAA surcharges. It can often also provide additional living benefits for certain health occurrences and long-term care needs that can be drawn out tax-free. This can be a valuable tool for covering care expenses without increasing taxable income. Learn more about how FIUL can reduce taxes in retirement.

Appealing IRMAA: Life-Changing Event Exceptions

One of the most underutilized tools for managing IRMAA is the life-changing event (LCE) appeal. Because IRMAA is based on income from two years prior, retirees are sometimes assessed surcharges based on income that no longer reflects their current financial situation — for example, a year with unusually high income from a property sale or a final year of full-time employment.

The Social Security Administration allows you to request a reduction in your IRMAA surcharge if you experienced one of the following qualifying life-changing events: 

How to File a Life-Changing Event Appeal

To request an IRMAA adjustment based on a life-changing event, contact the Social Security Administration directly or complete Form SSA-44 (Medicare IRMAA Life-Changing Event). You will need to provide documentation of the event and evidence of your current, lower income. The SSA will then use the more recent year’s income to recalculate your IRMAA — potentially eliminating the surcharge entirely or moving you to a lower tier.

Key timing note: you should file your appeal as soon as possible after the qualifying event. The SSA can apply the correction prospectively, meaning once approved, your premiums will be adjusted going forward. However, retroactive refunds are generally not available, so acting promptly matters.

Even without a formal life-changing event, you can request that SSA use a more recent tax year if your circumstances have changed significantly. Work with a financial advisor or tax professional to prepare the documentation needed for a successful appeal.

Long-Term MAGI Planning: The Proactive Approach

The most effective way to avoid IRMAA surcharges is to plan years in advance — ideally starting at age 60 or earlier. Because your 2026 surcharges are based on your 2024 income, decisions made two or more years before Medicare eligibility can have a direct impact on what you pay.

A long-term MAGI management plan might include: gradually converting traditional IRA funds to Roth IRA in low-income years before retirement; building a tax-free income stream through FIUL or Roth assets that can be accessed without affecting MAGI; coordinating the timing of Social Security claiming with other income sources; and avoiding large, one-time income events in the years directly before or during Medicare coverage. A qualified financial advisor who understands the intersection of Medicare rules and retirement income planning is your most valuable resource in this effort.

Conclusion

IRMAA surcharges can significantly affect retirees’ financial plans, particularly for high-net-worth individuals. By understanding how IRMAA is calculated, knowing the 2026 bracket thresholds, and taking advantage of strategies such as tax-efficient withdrawals, income timing, life-changing event appeals, and tax-free income vehicles, retirees can better manage their income and protect their monthly cash flow.

As a financial firm specializing in retirement planning, Summerlin Benefits Consulting is here to help clients navigate these challenges and secure a comfortable retirement. Contact us today to learn more about how fixed indexed annuities, FIUL, and comprehensive income planning can fit into your retirement strategy.

Last Updated: June 3, 2026

Frequently Asked Questions

Q: What is IRMAA and who does it affect?

A: IRMAA (Income-Related Monthly Adjustment Amount) is a surcharge added to Medicare Part B and Part D premiums for individuals whose Modified Adjusted Gross Income exceeds set thresholds. For 2026, the surcharge begins for individuals earning above $109,000. The Social Security Administration determines IRMAA using your tax return from two years prior.

Q: How is IRMAA calculated each year?

A: IRMAA is determined by your Modified Adjusted Gross Income (MAGI) from two years prior — your 2026 Medicare surcharge is based on your 2024 tax return. MAGI includes adjusted gross income plus tax-exempt interest such as municipal bond income. Exceeding a threshold by even $1 moves you to the next surcharge tier.

Q: How much does IRMAA add to my Medicare Part B premium in 2026?

A: In 2026, the standard Medicare Part B premium is $202.90 per month. IRMAA surcharges range from $81.20 to $487.00 per month depending on income, bringing total Part B premiums as high as $689.90 per month for individuals earning $500,000 or more. Surcharges are automatically deducted from Social Security benefit checks.

Q: What are the best strategies to reduce IRMAA surcharges?

A: Effective strategies include Roth IRA conversions (which reduce future MAGI), Qualified Charitable Distributions from IRAs, and careful timing of large income events like property sales. Tax-free income sources — including FIUL policy loans — generally do not count toward MAGI, making them useful tools for managing Medicare premium exposure in retirement.

Q: Can I appeal my IRMAA surcharge?

A: Yes — if you experienced a qualifying life-changing event (such as retirement, reduced income, divorce, or death of a spouse), you can request that SSA use more recent income data instead of the two-year-old figure. Complete Form SSA-44 and provide documentation of the event. A successful appeal can reduce or eliminate your surcharge going forward.