How to Reduce IRMAA in 2026 (Updated for 2026)

Posted On January 18, 2022 By Scott Stratton, CFP(R), CFA In Retirement Planning /

IRMAA (Income-Related Monthly Adjustment Amount) is a surcharge that higher-income Medicare beneficiaries pay on top of the standard Medicare Part B and Part D premiums. It’s triggered when your modified adjusted gross income (MAGI) from two years earlier exceeds certain thresholds — which, for 2026, are based on your 2024 tax return. CMS

Understanding IRMAA — and planning your income to stay below the thresholds — can significantly reduce your Medicare costs in retirement. This is especially important for retirees with $500,000–$5 million in investable assets. Strong income planning — including Roth conversions and thoughtful distribution sequencing — can help manage or even avoid IRMAA surcharges. This makes Roth conversion timing an essential part of income sequencing planning, especially if you are between ages 55 and 70. Because Medicare premiums are driven by income decisions, avoiding IRMAA often requires proactive retirement income planning, not last-minute fixes.

What IRMAA Is and Why It Matters

IRMAA is an additional charge on Medicare Part B (medical insurance) and Part D (prescription drug) monthly premiums that only applies if your income exceeds certain limits. The surcharge is based on MAGI — which includes taxable income plus tax-exempt interest — from your tax return two years prior. CMS

For 2026 premiums, the SSA will use your 2024 tax return information.
Even a small bump in income (like a large Roth conversion or capital gain) can move you into a higher IRMAA tier.
IRMAA applies whether you’re on Original Medicare or a Medicare Advantage plan with drug coverage.

Because IRMAA is driven by income decisions made years earlier, avoiding these surcharges often requires proactive tax planning for retirees, not last-minute adjustments.

2026 IRMAA Brackets and Premiums (Based on 2024 Income)

Below is how IRMAA affects your total Medicare Part B and Part D premiums in 2026.

Medicare Part B + IRMAA Premiums — 2026

MAGI Threshold (Individual)	MAGI Threshold (Married Filing Jointly)	Total Monthly Part B Premium	Part D IRMAA
≤ $109,000	≤ $218,000	$202.90	$0 + your plan premium
> $109,000–$137,000	> $218,000–$274,000	$284.10	$14.50
> $137,000–$171,000	> $274,000–$342,000	$405.80	$37.50
> $171,000–$205,000	> $342,000–$410,000	$527.50	$60.40
> $205,000–$500,000	> $410,000–$750,000	$649.20	$83.30
≥ $500,000	≥ $750,000	$689.90	$91.00
Source: Centers for Medicare & Medicaid Services and SSA rules

How to read this:

If your income is $109,000 or less (single) or $218,000 or less (joint), you pay the standard Part B premium and no IRMAA surcharge. CMS
As income increases, both Part B and Part D surcharges rise across five tiers.

How IRMAA Is Calculated

Your IRMAA is based on your Modified Adjusted Gross Income (MAGI) from your tax return filed in 2025 (the 2024 return).
MAGI includes:

Adjusted Gross Income (AGI), including your taxable Social Security benefits
Tax-exempt interest
Other modifications mandated by IRS rules

If your income changes — due to retirement, separation, divorce, or a large one-time event — you can appeal IRMAA using SSA Form SSA-44 with supporting documentation. Social Security

Why Roth Conversions Matter for IRMAA

Roth IRA withdrawals and qualified Roth conversions do not count toward MAGI once the Roth is established and withdrawals are qualified. Because IRMAA is based on MAGI, a well-timed Roth conversion strategy can potentially lower your IRMAA tier in future years.

Here’s how:

Converting traditional IRA funds to a Roth IRA increases MAGI in the conversion year, which could temporarily increase your IRMAA.
However, because Roth balances grow tax-free and qualified Roth withdrawals do not count as income, planning conversions years before Medicare eligibility can reduce MAGI at critical IRMAA calculation periods.
A staged Roth conversion strategy — spreading conversions over several years — can help avoid pushing income into higher IRMAA brackets.

This makes Roth conversion timing an essential part of income sequencing planning, especially if you are between ages 55 and 70.

Practical Tips to Reduce or Avoid IRMAA

1. Spread Income Over Time
Rather than taking large withdrawals or one-time gains in a single year, spread income over multiple years to avoid crossing IRMAA thresholds.

2. Consider Timing of Roth Conversions
Doing conversions in years with lower baseline income reduces MAGI and IRMAA risk. Internal planning tools can model this within broader strategies such as Roth Conversions After 60.

3. Use Qualified Charitable Distributions (QCDs)
If you are eligible for QCDs after age 70½ (even before RMDs start), these distributions count toward RMD requirements but do not count as income for IRMAA. (See: Using QCDs in Retirement Planning)

4. Appeal for Life-Changing Events
If your income decreased due to retirement, loss of spouse, or disability, you may submit SSA Form SSA-44 to appeal IRMAA. Social Security

Example: IRMAA Cost Impact (2026)

Suppose:

You are married filing jointly with a MAGI of $300,000 in 2024
In 2026 you would pay a Part B premium of $405.80/month and a Part D surcharge of $37.50/month, adding up to $443.30+ monthly, instead of the base $202.90.
That’s an extra ~$240/month just because of IRMAA — over $2,800 extra annually. CMS

This makes income planning before 65 highly impactful. IRMAA is one of the most commonly overlooked costs in retirement income planning.

Internal Links That Help You Plan Around IRMAA

For detailed strategies that tie into IRMAA planning, check out:

Roth Conversions After 60 — When They Make Sense
Using the ACA to Retire Early (health coverage timing and income planning)
Can You Reduce Required Minimum Distributions? (RMD timing and income sequencing)
Questions to Ask a Financial Advisor (And My Answers)

This topic is often part of a broader retirement or tax planning conversation. If you’d like help applying these ideas to your own situation, you can request an introductory conversation here.

Frequently Asked Questions

What income determines IRMAA for 2026?
Your 2024 tax return MAGI determines your Medicare IRMAA status for 2026.

Does IRMAA affect only Part B?
No — IRMAA also adds a surcharge to Medicare Part D prescription drug premiums.

Can I appeal an IRMAA surcharge?
Yes — if your income dropped due to a qualifying life event, you can submit Form SSA-44 to request a reduction. Social Security

Can You Contribute to an HSA After 65? (Updated for 2026)

Posted On November 12, 2017 By Scott Stratton, CFP(R), CFA In Retirement Planning /

Bottom Line: You cannot make new contributions to a Health Savings Account (HSA) once you’re enrolled in Medicare (any part). But you can continue to use the funds you’ve already accumulated, and you gain additional flexibility in how distributions are treated after age 65.

Overview: HSA Eligibility and Medicare

A Health Savings Account (HSA) gives triple tax benefits — deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses — but you must be covered by a qualifying High Deductible Health Plan (HDHP) and not have disqualifying coverage (like Medicare) to contribute.

Once you enroll in Medicare (Part A, B, C, or D), contributions stop because Medicare is no longer an HDHP and therefore disqualifies you from making further HSA contributions.

➡️ Many people receive Medicare Part A automatically when they start Social Security benefits at age 65, which also ends eligibility to contribute.

Can You Contribute While Working Past 65?

If you are still working past age 65 and are enrolled in an HDHP that qualifies for an HSA and you haven’t enrolled in Medicare, you can continue contributing. The key conditions are:

You remain covered under an HDHP;
You’re not enrolled in any part of Medicare; and
You otherwise meet IRS eligibility rules.

Many retirees choose to delay Medicare enrollment (and sometimes Social Security) so they can continue making HSA contributions for a short period — but this requires careful coordination with benefits and tax rules.

What Happens If You Contribute After You Enroll in Medicare?

If you contribute to your HSA after Medicare coverage begins, those contributions are considered ineligible and cause an excess contribution, which can trigger:

A 6% excise tax on the excess amount for each year it remains in the HSA; and
The requirement to withdraw the excess amount (plus earnings) to avoid further penalties.

This means careful planning is important if you’re close to Medicare age or delaying enrollment.

How Much Can You Contribute the Year You Turn 65?

In the year you reach age 65 and enroll in Medicare:

Your annual HSA contribution limit may be prorated based on the number of months you were eligible under an HDHP before Medicare coverage began.
Delaying Medicare enrollment can affect your eligible months.

Always confirm contribution limits with your plan administrator and consider tax implications when planning contributions around the year of Medicare enrollment.

Using HSA Funds After 65

While you can’t contribute after Medicare enrollment, your existing HSA assets remain yours and may be used:

Tax-free for qualified medical expenses, including deductibles, co-pays, prescription drugs, vision and dental care. Additionally, you can use your HSA to reimburse Medicare Parts B and D premiums and Medicare Advantage costs;
For non-medical expenses after age 65 without the usual 20% penalty (but such withdrawals are taxable like distributions from a traditional IRA). This should be avoided, if possible.

This makes an HSA a flexible part of retirement expense planning.

Planning Considerations for Retirees

Before age 65, an HSA can be an efficient way to build tax-advantaged savings for future healthcare needs. Once you’re approaching Medicare eligibility:

Coordinate your HDHP coverage, Social Security timing, and Medicare enrollment;
Understand proration rules for your final year of HSA eligibility; and
Be mindful of potential tax penalties for excess contributions.

Many retirees find HSA coordination fits into broader decisions about retirement income sequencing and tax planning — see our guide on Retirement Tax Planning for related context.

Related Resources

Retirement Income Planning Hub — How income flows in retirement
Required Minimum Distributions (RMDs) & Timing — Distribution sequencing considerations
How to Reduce IRMAA — Medicare Premium planning
Social Security Timing Decisions — Strategies around benefit start ages

Frequently Asked Questions (Retiree Focused)

Q: Can I still use my HSA to pay Medicare premiums?
Yes. After age 65, you can use your existing HSA funds to pay for qualified medical expenses, which include many Medicare premiums (Part B, Part D, Medicare Advantage).

Q: Is there any penalty if I withdraw HSA funds for non-medical expenses after age 65?
No penalty applies after age 65, but withdrawals for non-medical expenses are taxable as ordinary income.

Q: What if I delay enrolling in Medicare to keep contributing to my HSA?
You may remain HSA-eligible if you delay Medicare enrollment and maintain HDHP coverage — but retroactive Medicare coverage (up to six months) can catch you if you later enroll, making careful timing essential.

Q: Does enrolling in just Medicare Part A trigger the contribution restriction?
Yes. Enrollment in any part of Medicare — including Part A — ends your eligibility to contribute to an HSA.

If you’re approaching Medicare eligibility or are already managing multiple sources of retirement income, coordinating HSA rules, tax timing, and Medicare decisions can make a meaningful difference in your long-term planning. If you’d like a second look at your situation from a planning-first perspective, consider scheduling a conversation: Request an Introductory Conversation.

When a 2% COLA Equals $0

Posted On July 16, 2017 By Scott Stratton, CFP(R), CFA In Retirement Planning /

Social Security provides Cost of Living Adjustments (COLAs) annually to recipients, based on changes to the Consumer Price Index. According to an article in Reuters this week, the Social Security COLA for 2018 should be around 2%. Social Security participants may be feeling like breaking out the Champagne and party hats, following a 0.3% raise for 2017 and a 0% COLA for 2016.

Unfortunately, and I hate to rain on your parade, the average Social Security participant will not see any of the 2% COLA in 2018. Why not? Because of increases in premiums for Medicare Part B. Most Social Security recipients begin Part B at age 65, and those premiums are automatically withheld from your Social Security payments.

Social Security has a nice benefit, called the “Hold Harmless” rule, which says that your Social Security payment can not drop because of an increase in Medicare costs. In 2016 and 2017 when Medicare costs went up, but Social Security payments did not, recipients did not see a decrease in their benefit amounts. Now, that’s going to catch up with them in 2018.

In 2015, Medicare Part B was $105/month and today premiums are $134. For a typical Social Security benefit of $1,300 a month, a 2% COLA (an increase of $26 a month) will be less than the increase for Part B, so recipients at this level and below will likely see no increase their net payments in 2018. While many didn’t have to pay the increases in Part B over the past two years, their 2018 COLA will be applied first to the changes in Medicare premiums.

I should add that the “Hold Harmless” rule does not apply if you are subject to Medicare’s Income Related Monthly Adjustment Amount. If your income was above $85,000 single, or $170,000 married (two years ago), you would already pay higher premiums for Medicare and would be ineligible for the “Hold Harmless” provision. And if you had worked outside of Social Security, as a Teacher in Texas, for example, you were also ineligible for “Hold Harmless”.

The cost, length, and complexity of retirement has gone up considerably in the past generation. Not sure where to begin? Give me a call, we can help. Preparation begins with planning.