How to Lower Your Medicare Premiums (IRMAA Explained)

Most people know that Medicare Part B has a monthly premium. What surprises many beneficiaries is that the amount they pay isn’t the same for everyone. If your income is above a certain threshold, you pay more — sometimes significantly more. That extra charge is called IRMAA, and understanding how it works can help you plan ahead and even reduce your premiums if your income has recently dropped.

What Is IRMAA?

IRMAA stands for Income-Related Monthly Adjustment Amount. It’s a surcharge that Medicare adds to your Part B (medical insurance) and Part D (prescription drug) premiums if your income exceeds certain thresholds.

The Social Security Administration determines your IRMAA based on your Modified Adjusted Gross Income (MAGI) from two years prior. So in 2026, your premiums are based on your 2024 tax return. This two-year lookback is important — it means a high-income year in the past can affect your premiums today, even if your income has since dropped significantly.

IRMAA Income Thresholds for 2026

For 2026, the standard Medicare Part B premium is approximately $185 per month (the exact figure may vary slightly — check Medicare.gov for the most current numbers). Here’s how IRMAA surcharges add to that:

• Individual income up to ~$106,000 / Married up to ~$212,000: Standard premium, no surcharge
• Individual ~$106,001–$133,000 / Married ~$212,001–$266,000: Moderate surcharge added
• Individual ~$133,001–$167,000 / Married ~$266,001–$334,000: Higher surcharge
• Individual ~$167,001–$200,000 / Married ~$334,001–$400,000: Significant surcharge
• Individual ~$200,001–$500,000 / Married ~$400,001–$750,000: Substantial surcharge
• Individual above ~$500,000 / Married above ~$750,000: Maximum surcharge tier

At the highest tier, a married couple could each pay well over $500/month just for Part B. Part D surcharges are additional. For many retirees, this adds thousands of dollars per year to their healthcare costs.

How to Appeal IRMAA If Your Income Has Dropped

Here’s the good news: if you’ve had a “life-changing event” that significantly reduced your income since the tax year Medicare is using, you can request a new initial determination. This is essentially an appeal asking Medicare to use more recent income data instead of the two-year-old figures.

Qualifying life-changing events include:

• Retirement or reduction in work hours
• Death of a spouse
• Divorce or annulment
• Loss of pension income
• Loss of income-producing property (due to disaster, for example)
• Employer settlement payment in the base year that won’t recur

To appeal, complete Form SSA-44 (available at ssa.gov) and submit it to your local Social Security office along with documentation of your income change (recent tax return, letter of retirement, etc.). If approved, Medicare will recalculate your premium using your current or estimated income.

Note: general market losses in your investment portfolio do not qualify as a life-changing event for IRMAA purposes. The change must relate to specific categories listed by the SSA.

Strategies to Reduce Your MAGI and Lower IRMAA

Because IRMAA is based on your Modified Adjusted Gross Income, managing your income strategically can help you stay in a lower bracket — or avoid IRMAA altogether.

• Manage Roth conversions carefully: Roth conversions increase your MAGI in the year of conversion. Spreading conversions over multiple years can help you avoid pushing into a higher IRMAA tier.
• Use Qualified Charitable Distributions (QCDs): If you’re 70½ or older, you can donate up to $105,000 per year directly from your IRA to charity. This counts toward your RMD but does not appear in your MAGI — a powerful IRMAA reduction tool.
• Time capital gains carefully: Large capital gains from selling investments or property can spike your MAGI. Where possible, spread gains over multiple years.
• Coordinate IRA withdrawals with RMDs: Large withdrawals beyond your required amount can push you into a higher IRMAA tier the following year.
• Work with a tax planner in the year before Medicare begins: Your Part B premium in your first full year on Medicare is based on your income from two years prior — often still working years. Planning ahead can save money.

Key Takeaways

• IRMAA is an income-based surcharge added to Medicare Part B and Part D premiums for higher earners.
• Premiums are based on your income from two years ago — a delay that can work against you if your income has recently dropped.
• You can appeal IRMAA using Form SSA-44 if you’ve had a qualifying life-changing event that reduced your income.
• Strategies like Qualified Charitable Distributions, managed Roth conversions, and timed capital gains can help reduce your MAGI — and your IRMAA.
• Work with a tax or financial advisor in the years leading up to Medicare to proactively manage this often-overlooked cost.

Recommended Reading: 10 Costly Medicare Mistakes You Can’t Afford to Make — a highly rated guide to help you make the most of your retirement.