I'm Paying How Much For Medicare?!?!?

You can do everything “right.”

Save diligently.
Max out retirement accounts.
Build strong investment income.

Then one day, you open a letter from Social Security and discover your Medicare premiums just jumped hundreds of dollars per month.

Why?

IRMAA.

IRMAA stands for Income-Related Monthly Adjustment Amount.

It is an extra surcharge added to your:

And it is based on your income from two years ago.

That is the part that catches people off guard.

Your 2026 Medicare premiums are based on your 2024 tax return.

So decisions you make today can quietly affect what you pay years from now.

Retirement income is often more “lumpy” than people expect.

You might have:

Individually, these moves can make sense.

Stacked together in the wrong year, they can push you over an IRMAA threshold and trigger significantly higher premiums.

For some households, the difference can mean thousands of dollars per year.

And it is not just for the ultra-wealthy. Middle to upper-middle income retirees are often the ones most surprised.

Here are several proactive strategies that can help reduce or smooth future surcharges.

Instead of taking a massive IRA distribution in one year, consider spreading withdrawals over multiple years.

The same applies to capital gains harvesting or Roth conversions.

Smaller, controlled increases in income can help you stay below key thresholds.

Roth conversions can be incredibly powerful. But they increase taxable income in the year you convert.

There is a strategic window between retirement and Required Minimum Distributions where conversions often make sense.

The key is modeling how much you can convert without triggering unwanted Medicare premium spikes.

Once RMDs begin, your flexibility shrinks.

Planning distributions in your 60s before RMD age can reduce the size of future forced withdrawals and help lower long-term IRMAA exposure.

For charitably inclined retirees, QCDs allow you to satisfy RMD requirements without increasing taxable income.

Lower taxable income can mean lower Medicare surcharges.

Selling highly appreciated assets in a single year can create unintended consequences.

Strategic tax planning around when to realize gains can protect both your tax bracket and your Medicare premiums.

One of the biggest mistakes I see is reactive planning.

A client calls and says:

“Why did my Medicare jump?”

We look at their tax return from two years ago.

There it is.

A one-time income spike that pushed them into a higher IRMAA bracket.

By the time the letter arrives, the decision is already baked in.

That is why IRMAA planning must happen before income events occur.

Sometimes paying IRMAA is the right move.

If a Roth conversion saves significant lifetime taxes, a temporary premium increase might be worth it.

The goal is not to avoid IRMAA at all costs.

The goal is to make intentional decisions instead of accidental ones.

Medicare premiums are not just a health insurance issue.

They are a tax planning issue.

They are a retirement income sequencing issue.

And they are a coordination issue between investments, Social Security, tax strategy, and distribution planning.

If you are in your late 50s or early 60s, this is the time to run projections.

Because the income decisions you make today can quietly shape your Medicare costs tomorrow.

If you would like to see how your current strategy could affect future Medicare premiums, you can request a Medicare and income planning review through The Golden Years Playbook.

Better to plan ahead than be surprised two years later.

Talk soon

-Nate

Nate Lewis CFP® EA
Tax and Wealth Advisor
IronBullFinancial.com