Part 1 — Direct Answer

IRMAA stands for Income-Related Monthly Adjustment Amount. It is a surcharge added to your standard Medicare Part B and Part D premiums when your modified adjusted gross income (MAGI) exceeds certain IRS thresholds. For 2026, surcharges begin at incomes above $106,000 for single filers and $212,000 for married filing jointly. IRMAA is calculated using your income from two years prior — meaning a large Roth conversion or IRA withdrawal today can trigger higher Medicare premiums two years from now.

Part 2 — Detailed Explanation

Medicare is often described as a flat-rate benefit — you pay the standard premium and receive the same coverage as everyone else. That description is accurate only up to a point. Once your income crosses certain thresholds, the federal government adds a surcharge — IRMAA — on top of the standard premium. The surcharge increases in steps as income rises, and it applies separately to both Part B (medical coverage) and Part D (prescription drug coverage).

For 2026, the IRMAA tiers work as follows. The standard Medicare Part B premium applies to individuals with MAGI at or below $106,000 (single) or $212,000 (married filing jointly). Above those thresholds, premiums increase in five tiers, with the highest tier applying to individuals earning above $500,000 (single) or $750,000 (married). At the highest tier, the Part B premium can be more than three times the standard amount. Part D surcharges follow a similar but separate tier structure.

What makes IRMAA particularly dangerous for retirees is the two-year lookback rule. Medicare determines your IRMAA surcharge based on your MAGI from two years earlier. So your 2026 Medicare premium is based on your 2024 income. If you had a large Roth conversion, sold a significant investment, or took a large IRA distribution in 2024, you could be paying elevated Medicare premiums in 2026 regardless of your current income. This delayed consequence is something most retirees don't anticipate until they open their Medicare bill and see a number far higher than expected.

The income used to calculate IRMAA — MAGI — includes wages, self-employment income, capital gains, dividends, interest, IRA distributions, Roth conversion amounts, rental income, and most other taxable income sources. It does not include Roth IRA withdrawals, which is one of the key reasons building up Roth assets before retirement is so strategically valuable. Every dollar shifted from a traditional IRA to a Roth IRA reduces the future income that counts toward IRMAA calculations.

There is a process to appeal IRMAA if your income has dropped significantly due to a life-changing event — retirement, divorce, death of a spouse, or loss of income. The appeal process uses a form called SSA-44 and can adjust your premium based on more recent income if you can document the change. However, appealing is a reactive measure. The better strategy is proactive income management in the years before Medicare eligibility begins.

Part 3 — What This Means for You

If you are 60-65 with a large traditional IRA or 401(k) balance, IRMAA is one of the most important planning targets you have right now — and the window to act is open. Every year between now and age 65 (when Medicare begins) is a year you can take deliberate action to manage the income that will determine your Medicare premiums.

The most powerful tool is Roth conversion. By converting pre-tax IRA dollars to Roth during your lower-income years — especially after retirement and before RMDs begin at 73 — you permanently reduce the future IRA balance that will generate taxable distributions. Smaller future distributions mean lower MAGI and lower IRMAA exposure for the rest of your retirement.

For a married couple with $3M in a traditional IRA, the difference between proactive Roth conversion planning and doing nothing can easily exceed $5,000 per year in Medicare premiums — and that number compounds over a 20-year retirement. This is not a theoretical risk. It is a calculable, manageable cost that responds directly to deliberate planning decisions made in the years before Medicare enrollment.

Part 4 — Common Mistakes and Misconceptions

• The most common mistake is treating IRMAA as something that happens to other people. Retirees with $1.5M-$3M in pre-tax accounts are squarely in the IRMAA exposure zone once RMDs begin stacking on top of Social Security and investment income. Most don't realize this until the surcharges start appearing.
• The second mistake is ignoring the two-year lookback when planning large conversions or asset sales. Taking $200,000 out of an IRA in one year without modeling the IRMAA consequence two years later is a costly oversight. Spreading that withdrawal across two or three years often keeps income below the next IRMAA tier at a fraction of the tax cost.
• The third mistake is failing to appeal when income drops. If you retired and your income dropped significantly, you may qualify for an IRMAA adjustment. Most retirees don't know the appeal process exists.