IRMAA: How Retirement Income Can Raise a Physician's Medicare Premiums

It's a few weeks after your 65th birthday. You've hung up the white coat, your Medicare card has arrived, and then you learn your Medicare Part B premium is higher than the standard amount. Your first thought might be, "We're retired. Why are we being charged like we're still working?"

The answer is IRMAA, the income-related monthly adjustment amount. It's a surcharge added to Medicare Part B and Part D premiums for people whose income crosses certain thresholds, and it looks backward. Medicare.gov describes IRMAA as an extra amount added to your monthly premium if your modified adjusted gross income from two years ago is above a certain amount. For a physician household, that two-year gap can line up awkwardly with your final working years, a large Roth conversion, or the sale of a practice or rental property.

IRMAA isn't a reason to avoid good retirement decisions. It's one more cost to weigh alongside income tax when you plan the years around your transition, and it fits naturally into the broader work of retirement planning for doctors. This article walks through how IRMAA is calculated, which income sources tend to push retired physicians into higher tiers, and how the appeal process works when your income has dropped.

What IRMAA Is and How the Two-Year Lookback Works

Medicare Part B and Part D both carry monthly premiums. If your income is above a set threshold, an income-related adjustment is added on top. According to the CMS fact sheet on 2026 Medicare Parts A and B premiums, the income-related adjustment amounts affect roughly 8 percent of people with Part B. For a retired physician, though, savings, pensions, and investment income can add up faster than you might expect.

The income that counts is your modified adjusted gross income, or MAGI. Under the Social Security Act, MAGI for IRMAA is adjusted gross income (determined without regard to a few technical tax-code sections), increased by any tax-exempt interest you received or accrued during the year, as set out in 42 U.S.C. 1395r. That second piece surprises people. Interest you never pay federal income tax on still counts toward IRMAA.

The lookback is the part that trips up retirees. The statute says the income used is from the second calendar year before the year the premium applies. For 2026 premiums, that means 2024 income. So your premium at 65 reflects your income at 63. Your premium at 66 reflects your income at 64.

That's why IRMAA belongs in the conversation well before Medicare enrollment. If you're mapping out the years ahead, a pre-retirement checklist for the five years before you stop working is a good place to see how Medicare timing fits with everything else on your list.

Because each premium year looks at income from two years earlier, a high-income year leads to a higher premium for one year, two years later. It isn't a permanent label. If your income drops back below a threshold, your premium drops back too, once that lower-income year becomes the lookback year.

The 2026 IRMAA Tiers for Part B and Part D

The table below shows the 2026 income tiers for people who file as individuals or married filing jointly, based on 2024 MAGI. The Part B figure is the total monthly premium per person. The Part D figure is the monthly income-related adjustment amount. All figures come from the CMS fact sheet linked above.

If you're married but file separately and did not live apart from your spouse at all times during the year, the tiers are much tighter. Per CMS, the 2026 Part B premium jumps to $649.20 once separate-filer MAGI is above $109,000, and to $689.90 at $391,000 or more.

Why the Tiers Behave Like Cliffs

IRMAA isn't phased in gradually. Each threshold works like a cliff. If your joint MAGI is $274,000, you're in the first surcharge tier. If it's $274,001, you're in the second tier for that premium year. One extra dollar of income can raise the premium for each spouse enrolled in Medicare, because the adjustment is calculated for each individual.

Here's the math at the joint-filer level using the 2026 figures. Moving from the first tier to the second raises the Part B premium from $284.10 to $405.80 a month, or $121.70 more per person. For a couple both on Medicare, that's roughly $2,920 more for the year in Part B alone, before the Part D difference. Seen that way, a small amount of extra income near a threshold can carry a surprisingly high effective cost.

That said, the surcharge is paid out of income that's still there. Landing in a higher tier means your income was higher. Keep that in mind when weighing whether a decision is worth making despite IRMAA.

What Can Push a Retired Physician Into a Higher Tier

On paper, retirement looks like a low-income period. In practice, a physician household can have several income sources that land on the tax return at once. Here are the common ones to look at.

Your Final Working Year (or Two)

Because of the lookback, your last full years of clinical income can set your Medicare premiums after you've stopped working. If you retire at 65, your first-year premium is based on your income at 63, when you were likely still drawing a full attending salary. The year you stop working can carry extra income too: a final production bonus, a payout of unused paid time off, deferred compensation distributions, or a buyout from a practice. Any of these can land in a year that sets your premium two years later.

Roth Conversions

The years between retirement and required distributions are sometimes used as a window for Roth conversions, when your tax bracket may be lower than it was during your career. A conversion adds the pre-tax converted amount to your gross income, and therefore your AGI, for that year (see 26 U.S.C. 408A), so it counts toward MAGI. A conversion at 63 or later can show up in your Medicare premiums two years down the road. If you're weighing conversions, our article on Roth conversions and the 2026 tax landscape for physicians covers the income tax side. IRMAA adds a second layer to that same decision.

The trade-off is a real one. Converting more now may raise this year's tax bill and a future premium for one year. Converting less may leave a larger pre-tax balance that produces bigger required distributions later, which can raise MAGI year after year. Neither direction is right in every case. The answer depends on your balances, your spouse's age, your other income, and your expectations about tax rates, which is why these decisions are usually reviewed year by year with a tax professional.

Required Minimum Distributions

RMDs (required minimum distributions, the withdrawals the IRS requires from traditional IRAs and workplace retirement plans each year) start at an age set by statute that depends on when you were born. The applicable age is 73 for people who were born between 1951-1959, and 75 for people born in or after 1960 (26 U.S.C. 401(a)(9)(C)(v)). The IRS required minimum distribution FAQs cover the rules in more detail. Physicians who saved diligently in pre-tax accounts can end up with large balances. IRS Publication 590-B says distributions from a traditional IRA are taxed as ordinary income (unless you made nondeductible contributions), so IRA RMDs generally count toward MAGI. Unlike a Roth conversion, an RMD isn't optional, so it can keep income above a threshold every year once it starts.

Capital Gains and Investment Income

Net capital gains can be taxed at lower rates than ordinary income (IRS Topic 409), but gains from dealings in property are still part of gross income, so they count for IRMAA. Selling an appreciated rental property, selling your share of a practice or a surgery center, or selling highly appreciated shares in a taxable brokerage account can each create a one-year spike. Dividends and interest add up too, and as mentioned above, tax-exempt municipal bond interest is added back in. Even routine portfolio activity in a taxable account, such as rebalancing, can realize gains that land on the return.

Pensions, Social Security, and Part-Time Work

A pension, the taxable portion of Social Security benefits, and income from part-time or locums work in early retirement all flow into AGI. Locums work can be a satisfying way to stay connected to medicine, and the income it adds is worth including in your Medicare projections.

Income That Typically Doesn't Raise MAGI

Some sources of retirement cash flow don't add to MAGI, which is why the mix of accounts you draw from can matter.

• Qualified distributions from a Roth IRA or a designated Roth account in a workplace plan aren't includible in gross income (see 26 U.S.C. 408A(d)(1) above and 26 U.S.C. 402A(d)(1)), so they aren't part of AGI.
• HSA distributions used for qualified medical expenses aren't taxed. For people 65 or older, IRS Publication 969 lists Medicare premiums (other than premiums for a Medicare supplemental policy such as Medigap) among qualified medical expenses. Our guide to HSAs for physicians covers the broader picture.
• When you sell shares in a taxable brokerage account, the capital gain is the difference between the sale amount and your basis in the shares (IRS Topic 409 above), so only the gain, not the full sale amount, counts toward MAGI.
• For people age 70½ or older, qualified charitable distributions (QCDs) are excluded from gross income, and a QCD counts toward the required minimum distribution (IRS Publication 590-B above).

If charitable giving is part of your retirement plans, our article on donor-advised funds and bunching charitable gifts explains how those gifts work on the tax return.

How Physicians and Their Advisors Typically Think About IRMAA

Planning around IRMAA usually isn't about avoiding it at all costs. It's about seeing the thresholds ahead of time so a decision isn't made blind. Here's what that conversation often looks like in practice.

One approach is projecting MAGI for each year from about age 63 onward, then noting where each year lands relative to the tiers. Because the thresholds can change from year to year, these projections are usually revisited annually rather than set once.

Another approach is sizing a Roth conversion or a capital gain with the next threshold in mind. If a conversion would push joint MAGI just past a tier line, some physicians look at whether a slightly smaller conversion fits their goals. Others decide the long-term benefit of converting more is worth a higher premium for one year. Both can be reasonable.

A third is coordinating which accounts fund spending each year. Drawing from Roth or HSA accounts in a year when pre-tax income is already high may keep MAGI steadier. This only works if those buckets were built during your career, which is one reason Roth and HSA savings should get attention well before retirement.

Timing large gains is another detail that comes up. Selling a rental property or a practice interest in a year when other income is lower may change which tier you land in. Your tax professional and the attorney handling the sale are the right people to review whether that's workable.

None of these approaches guarantees a particular premium. IRMAA thresholds change, your income can shift in ways you didn't plan for, and tax law can change. The goal is a clearer picture, not a promise.

The SSA-44 Appeal: When Your Income Has Dropped

Here's the part that can help when income has gone down. The statute allows an adjustment when income is significantly lower because of the death of a spouse, marriage, divorce, or other major life-changing events specified in regulations. According to Social Security's own operating manual, a beneficiary who reports a qualifying life-changing event with a significant reduction in MAGI may request a new initial determination using a more recent tax year than the one used before. The manual identifies Form SSA-44 (the Medicare Income-Related Monthly Adjustment Amount life-changing event form) as an optional way to report the event.

What Counts as a Life-Changing Event

The qualifying events are defined in federal regulation. Under 20 CFR 418.1205, they include:

• You or your spouse stop working or reduce the hours you work.
• You marry.
• Your marriage ends through divorce or annulment.
• Your spouse dies.
• You or your spouse lose income-producing property. The regulation's examples include disaster losses, destruction of livestock, arson, and theft.
• An employer's pension plan has a scheduled cessation, termination, or reorganization.
• You receive a settlement from an employer or former employer because of the employer's closure, bankruptcy, or reorganization.

Notice what isn't on the list. A Roth conversion, a large capital gain, or a big RMD year doesn't appear among the events in the regulation. Under 20 CFR 418.1210, events that affect your expenses but not your income, and a loss of dividend income due to ordinary investment risk, are not major life-changing events. That's why the planning discussed above matters for those income sources.

What the Request Involves

According to the operating manual, the beneficiary must provide evidence of both the life-changing event and the more recent tax year's MAGI. Use of Form SSA-44 is optional, and a request can also be made by contacting Social Security. The regulation also requires the drop in income to be significant: the decrease must either reduce the percentage of the adjustment amount you pay or bring your MAGI below the threshold (see 20 CFR 418.1215).

Here's how that might look. Say you stopped practicing in June 2026 and you and your spouse filed jointly. Your 2027 premiums would normally be based on 2025 income, when you were still practicing. Because a work stoppage is a listed event, you could request a new determination using a more recent tax year, with evidence of the work stoppage and of that year's MAGI. If the lower income meets the significant-reduction test, the premium may be reduced.

When the Income Figure Itself Is Wrong

The operating manual also notes that you can ask Social Security to use more accurate tax return information, or information from a more recent year. That's separate from reporting a life-changing event.

A Few Situations Worth Knowing About

If you file jointly and only one spouse is on Medicare, the joint thresholds in the CMS tables still apply, and the adjustment is calculated for the individual who is enrolled.

The death of a spouse is a qualifying life-changing event. Separately, if a surviving spouse later files as single, the single-filer thresholds in the CMS tables are lower than the joint thresholds, so income that used to sit below a joint threshold can land in a higher tier on a single return. That shift in filing status is worth including in a retirement income projection.

If you keep working past 65 with health coverage from an employer group health plan, Medicare.gov says you can wait until you (or your spouse) stop working, or lose that coverage, to sign up for Part B without a late enrollment penalty. Your benefits office and Medicare's own enrollment guidance are the places to confirm how that applies to your plan.

Bringing It Together

IRMAA is a premium surcharge based on income from two years earlier, and it resets each year. The tiers act like cliffs, both spouses can be affected, and the income sources that can push retired physicians higher include a final working year, Roth conversions, RMDs, and large capital gains. When income drops because of a qualifying event such as stopping work, Social Security's operating manual describes a way to request a new determination using a more recent tax year, with Form SSA-44 as an optional way to report it.

The harder part is coordination. Medicare premiums sit alongside income taxes, Roth conversion plans, the order you draw from accounts, charitable giving, and the timing of any business or property sale. Each decision affects the others, and the right balance depends on your household's numbers.

If you'd like to talk through how your own retirement income years might line up with Medicare, our CFP® professionals are glad to start with a conversation about your goals and whether we're the right fit to help. You can get started here, or email the team at contact@physicianfamily.com if you'd rather start with a question.

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