IRMAA bites! Beware!

Investment Analysis Clubs Macro Economic Trends and Risks
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I never heard about IRMAA until I innocently converted $100,000 from my Traditional IRA to my Roth IRA.

IRMAA ( Income-Related Monthly Adjustment Amounts) are a surcharge on Medicare premiums for people whose MAGI is higher than a certain amount.

This really bites because it applies to all taxable income including Roth conversions and IRA RMDs (required minimum distributions) which don’t bring fresh money into the household but are simply shifting the same money from one pocket into a different pocket.

https://www.wsj.com/personal-finance/taxes/what-is-irmaa-medicare-social-security-c7e2860a?mod=hp_lead_pos11

The Medicare Charge That’s Taking a Bigger Bite Out of Social Security Checks

Nearly six million seniors owe extra Medicare premiums called Irmaa, and these charges are set to rise

By Laura Saunders, The Wall Street Journal, Jan. 23, 2026

…
Seniors see the rising cost of Medicare Part B premiums (for doctors and outpatient care) and Part D premiums (for drugs) reduce their Social Security payments. This is especially true for those who are affluent and owe charges called “income-related monthly adjustment amounts,” or Irmaa…

Medicare Irmaa charges for about six million, higher-earning Americans today are projected to rise significantly. According to the 2025 Medicare Trustees Report, overall Part B Irmaa charges alone are expected to increase 30% from 2026 to 2030…

Like basic premiums for Medicare, Irmaa charges are calculated annually based on the expected costs of the program—not the inflation increases used by Social Security.

For 2026, five income tiers of earners who pay for Part B or Part D are subject to Irmaa. Medicare recipients in these tiers are expected to pick up 35%, 50%, 65%, 80% or 85%, respectively, of their projected Medicare cost through premiums, rather than 25%… [end quote]

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Every word of this article is useful but I can’t copy it due to copyright infringement.

If you are in a higher income range try to spread out your income.

One possible way is to do an IRA QCD annuity. This is a fairly new law which some charities (including universities) offer. Here’s a good article describing it. There are lots of rules.

A life event (such as divorce or death of a spouse) can qualify for escaping IRMAA. Form SSA-44. This is important because the “widow’s penalty” of changing from Married Filing Jointly to Single can hit at the same time as IRMAA which is based on income from 2 years earlier.

Wendy

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While technically true, keep in mind that the funds from IRA withdrawals (whether by RMD or Roth conversion or ordinary withdrawal) are funds that have never been taxed. So while they aren’t new funds now, they escaped taxation when they WERE new funds.

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Roth IRA contributions are made with after-tax money. If converting to a Roth IRA, taxes must be paid.

DB2

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I mistakenly assumed most of the people here were aware of the Irmaa bump. Not that anybody should read my posts, but I have talked in the past about trying to limit my Roth conversions to just under the first Irmaa threshold, and finally giving up but still keeping my income under the second irmaa threshold bump, and also under the 32% tax bracket in order to avoid both of those happening when rmd’s kick in.

It is a first world problem to be retired and struggling to keep your income below $220,000 in early retirement in order to avoid a big bump in taxes and Irmaa levies due to large rmd’s, but it is also a predictable result of millions of baby boomers funneling large amounts of money into sheltered accounts (a good thing) but not being warned about the tax consequences of putting millions of dollars into accounts which eventually will have sizeable tax and irmaa consequences.

It really gets dicey when one spouse dies and the surviving spouse faces another huge bump in taxes and irmaa deductions.

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Meanwhile they continue to tell us that Social Security payments should be means tested. They are taxable income. And due to IRMAA, if you have decent income you can easily pay $7/yr for Medicare. What happened to all those Medicare contributions I made (and my employer made) while I was working.

Yes, its insurance, but Congress still wants to pick your pocket. Benefits are always uncertain in the future.

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They aren’t put into an account for YOU. They are used to pay-out to current recipients. So…yeah…that’s the answer to your question.

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Bottom line, they spent it as soon as they got it!!

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Of course. That’s why the “demographic bomb”, where baby-boomers are getting payouts, and there are fewer younger workers to support them. Flying from memory, 50 years ago the ratio of recipients to workers was 8:1. Last I knew it was something like 3:1 (several years ago). It may be worse today (dunno).

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You’re not wrong. It has been discussed 20 times just in the last year (search results) - and probably 20 times a year every year prior - many of those on this board.

I think Wendy might be editorializing a bit. She mentioned it herself three times back in 2023.

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