IRMAA is Medicare's income surcharge, and it catches many retirees off guard. In 2026, it starts once MAGI rises above $106,000 for single filers or $212,000 for married filing jointly. The catch is timing: Medicare uses your income from two years earlier, so a large Roth conversion or IRA withdrawal today can raise your Part B and Part D premiums two years from now.

Why the Two-Year Lookback Makes IRMAA Expensive

Medicare is usually presented as a standard premium for standard coverage. That is only true until income crosses the IRMAA thresholds. Once you cross them, the government adds surcharges in steps, and those surcharges are applied separately to Part B (medical coverage) and Part D (prescription drug coverage).

In 2026, the standard Part B premium applies at or below $106,000 of MAGI for single filers and $212,000 for married couples filing jointly. Above that, IRMAA rises through five tiers, with the highest tier kicking in above $500,000 for single filers and $750,000 for married couples. At that top tier, Part B can cost more than three times the standard premium, and Part D has its own separate surcharge schedule.

The two-year lookback is what makes IRMAA so expensive when it is unmanaged. Your 2026 Medicare premium is based on your 2024 MAGI, not your current income. That means a big conversion, investment sale, or IRA withdrawal can create a delayed premium spike you do not feel until years later.

MAGI for IRMAA includes wages, self-employment income, capital gains, dividends, interest, IRA distributions, Roth conversion income, rental income, and most other taxable income sources. Roth IRA withdrawals are not included, which is exactly why pre-building Roth assets can materially reduce long-term IRMAA pressure.

You can appeal IRMAA if income dropped because of a life-changing event such as retirement, divorce, death of a spouse, or loss of income. That process uses SSA-44 and can reset premiums using more current income. It helps, but it is reactive. The stronger approach is managing income proactively before Medicare starts.

The Best Time to Control IRMAA Is Before Medicare Starts

If you are in your early 60s with a large traditional IRA or 401(k), IRMAA should be a planning target now, not a surprise at enrollment. The years before age 65 are your control window for the income that will determine future Medicare premiums.

Roth conversions are often the most useful lever. Converting during lower-income years, especially after retirement and before RMDs begin at 73, reduces future pre-tax balances and lowers the taxable distributions that feed IRMAA later.

For a married couple with $3 million in traditional IRA assets, the spread between proactive conversion planning and doing nothing can easily exceed $5,000 per year in Medicare premiums, and that gap can compound over a 20-year retirement. This is not theoretical. It is a measurable cost tied directly to planning decisions made before Medicare starts.

Three IRMAA Mistakes That Create Avoidable Premium Spikes

• Treating IRMAA as someone else's problem. Retirees with $1.5M-$3M in pre-tax assets are often directly in the exposure zone once RMDs stack on top of Social Security and portfolio income.
• Ignoring the two-year lookback when planning large conversions or asset sales. A single $200,000 IRA withdrawal can trigger avoidable surcharges two years later when the same amount spread over multiple years might not.
• Not filing an appeal after a legitimate income drop. Many retirees qualify for an IRMAA adjustment after retirement or another life-changing event and never submit SSA-44.