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Medicare IRMAA mechanics and money moves
What is IRMAA?
The Income-Related Monthly Adjustment Amount is an extra charge added to Medicare Part B and Part D premiums when your income crosses set lines. Social Security uses a two-year lookback and counts modified adjusted gross income (MAGI), which is your adjusted gross income plus tax-exempt interest. For 2025 the standard Part B premium is $185 per month.
Which year of income matters?
Your IRMAA in a given year is typically based on the tax return from two years earlier. For 2025 determinations, SSA generally uses your 2023 return. That is why income at age 63 can affect your premiums at 65.
What income counts toward IRMAA?
The MAGI formula for Medicare
Medicare MAGI equals AGI plus tax-exempt interest. That means wages, self-employment income, interest, dividends, capital gains, rental income, taxable IRA and 401(k) withdrawals, and Roth conversions flow through AGI.
Tax-exempt municipal bond interest is added on top. The taxable portion of Social Security benefits is included because it sits in AGI.
2025 signposts
IRMAA tiers start above $106,000 single or $212,000 joint and step up from there. Part B and Part D both apply their own IRMAA amounts once you cross a tier.
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Form SSA-44 when income drops
Can I get IRMAA lowered if I just retired?
Yes. If a life-changing event reduced your income, you can ask SSA to use your current-year estimate instead of the old return. Qualifying events include retirement or reduced work hours, marriage, divorce, the death of a spouse, loss of income-producing property from disaster, certain pension changes, and employer settlements. Use Form SSA-44 and attach proof. You can also submit your request online.
What documents help?
Think retirement or layoff letters, pay stubs showing reduced hours, a death certificate, or settlement paperwork. SSA lists the events, the evidence to provide, and where to send or upload it.
Timing withdrawals to avoid or reduce surcharges
Plan in two calendars
Your withdrawal affects your taxes this year, but IRMAA two years later. If you are enrolling at 65, manage income at 63 and 64 to stay under a target tier. Consider spreading Roth conversions or realizing gains over more than one calendar year to prevent a one-year spike that triggers a full-year surcharge. 2025 Part B and Part D tables show bracketed, cliff-like jumps.
RMD timing at 73
Required minimum distributions (RMDs) begin at age 73 for IRAs and most workplace plans. You can delay the first IRA RMD until April 1 of the following year, but that can force two RMDs in one calendar year, raising MAGI and risking IRMAA. The IRS details the start age and deadlines.
Use QCDs to trim MAGI
A qualified charitable distribution (QCD) from an IRA, available starting at age 70½, sends money directly to a charity. It is excluded from taxable income and can satisfy your RMD, which can help reduce Medicare MAGI that drives IRMAA. See IRS Publication 590-B and the IRS QCD explainer. (IRS)
Quick reference for 2025
Part B standard premium: $185 per month.
Part D national base premium: $36.78, used in IRMAA and late-penalty math.
IRMAA thresholds: start above $106,000 single or $212,000 joint for 2025.
What this means for you
Look two years ahead. Map income before Medicare to avoid landing one dollar over a tier.
Right-size conversions. Split Roth conversions and manage capital gains so MAGI stays under a chosen line.
Appeal when life changes. If retirement or another qualifying event cut your income, file SSA-44 with evidence.
Try this
Pull your last two returns and estimate this year’s MAGI including any tax-exempt interest. Compare with 2025 tiers.
If you will enroll in 2026, stress-test income plans for 2024 and 2025 to keep 2026 IRMAA in bounds.
At 70½ or older, consider a QCD to meet part of your RMD without lifting MAGI.
Need a second set of eyes?
An experienced advisor can build a year-by-year income map that coordinates taxes, RMDs, and IRMAA so you keep more of your check. Take the quick Money Pickle quiz to see matches with vetted advisors:
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