Medicare Open Enrollment is underway, and for many retirees and pre-retirees, this season brings more than plan comparisons. It is also when many discover that past income decisions, such as Roth conversions, capital gains, or required withdrawals, can raise Medicare premiums through IRMAA (the Income-Related Monthly Adjustment Amount). Because IRMAA looks back at your income from two years earlier, your choices today can affect what you pay for Medicare Part B and Part D later.
For women navigating widowhood or major life changes, business owners with fluctuating income, and retirees trying to stretch savings, understanding IRMAA is essential. The good news is that with thoughtful planning, you can manage or even reduce these surcharges.
What IRMAA Is and Why It Matters
Medicare uses your Modified Adjusted Gross Income (MAGI) to determine whether you owe IRMAA. If your income crosses certain thresholds, you pay a surcharge on top of your standard Part B and Part D premiums. Because Medicare uses a two-year lookback, your 2024 income determines your 2026 premiums.
This means:
- A Roth conversion in 2024 can raise your premiums in 2026.
- A large capital gain this year may increase what you pay two years from now.
- Required Minimum Distributions (RMDs) can push you into a higher bracket unexpectedly.
IRMAA tiers are cliffs. Even one dollar over the threshold triggers the full surcharge.
Smart Ways to Manage IRMAA During Open Enrollment
1. Use Qualified Charitable Distributions (QCDs) to Reduce Taxable Income
Giving directly from your IRA to a qualified charity, up to $100,000 per year, counts toward your RMD but does not increase your taxable income. This can help you:
- Lower MAGI in high-income years
- Reduce the chance of crossing an IRMAA threshold
- Support causes you care about while keeping taxes in check
QCDs are especially helpful for retirees who do not need their full RMD for living expenses.
2. Time Withdrawals and Conversions Carefully
Because IRMAA looks back two years, timing matters.
Consider these strategies:
- Spread Roth conversions across multiple years to avoid jumping into a higher IRMAA tier.
- Convert during lower-income gap years, often after retiring but before RMDs and Social Security begin. These years typically offer the lowest MAGI and the most flexibility.
- Avoid stacking income events such as large withdrawals, capital gains, and Roth conversions in the same year if possible.
Thoughtful timing can save thousands in future Medicare premiums.
3. Request an IRMAA Reduction After a Life-Changing Event
If a major life event has reduced your income, you may qualify for an IRMAA reduction using SSA Form 44.
Eligible events include:
- Retirement
- Loss of a spouse
- Divorce
- Reduced work hours
- Loss of income-producing property
For women navigating widowhood or divorce, this appeal can be especially important. You can also explore Longview’s Women Navigating Change Checklist, an interactive resource designed to help you organize financial decisions during transition: https://longviewii.aweb.page/women-navigating-change-checklists
4. Coordinate Your Tax and Medicare Planning
IRMAA planning works best when integrated with your broader retirement strategy. A coordinated plan can help you:
- Balance Roth conversions with future tax savings
- Manage RMDs without triggering unnecessary surcharges
- Align charitable giving with tax efficiency
- Smooth income across years to avoid IRMAA cliffs
This is particularly valuable for business owners with variable income and retirees who want predictable healthcare costs.
Your Medicare Premiums Do Not Have to Be a Surprise
Medicare Open Enrollment is the perfect time to review your income strategy. With the right planning, such as QCDs, thoughtful withdrawal timing, and appeals after life changes, you can keep IRMAA in check and protect your long-term retirement budget.
Longview Insurance and Investments helps pre-retirees, retirees, women navigating life transitions, and business owners make confident, informed decisions.
If you are ready to take control of your Medicare costs and retirement plan, schedule a conversation today: https://app.greminders.com/c/longview
FAQs
What is IRMAA?
IRMAA is the Income-Related Monthly Adjustment Amount. It is an added surcharge on Medicare Part B and Part D premiums for higher-income retirees.
How does Medicare calculate IRMAA?
Medicare uses your Modified Adjusted Gross Income from two years earlier to determine whether you owe IRMAA.
Can Roth conversions increase Medicare premiums?
Yes. Roth conversions increase MAGI and can push you into a higher IRMAA tier.
How can I reduce IRMAA?
You can use Qualified Charitable Distributions, time withdrawals carefully, or request a reduction after a life-changing event using SSA Form 44.
Can I appeal IRMAA after losing a spouse?
Yes. Widowhood is a qualifying life-changing event that may allow you to request lower premiums.
Sources:
- MedicareFAQ. “Roth Conversions and Medicare: How to Convert Without Triggering IRMAA Surcharges.” MedicareFAQ.com.
- IRMAA Hub. “Roth Conversions and IRMAA: Timing the Surcharge.” irmaahub.com. Income Lab.
- Income Lab. “IRMAA Brackets 2026: Advisor Guide to Tiers and Planning.” incomelab.io.