5 Costly Mistakes That Can Trigger Medicare Surcharges — And How to Avoid Paying Thousands More Than You Should

High-income retirees are often surprised by a Medicare expense that can lurk behind the scenes, automatically deducted from their Social Security benefits each month.

It's a surcharge added to Part B and D premiums known as the income-related monthly adjustment amount (IRMAA).

These surcharges are tiered, meaning sometimes a single additional dollar of taxable income could trigger thousands in extra costs. Because it's based on income from two years ago, many retirees don't see it coming until it's too late.

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The amounts aren't small. For 2026 the annual surcharges for Parts B and D range from slightly more than $1,100 for the lowest tier to nearly $7,000 for the highest tier. Those are per person, and on top of the base premiums.

Here's how the 2026 IRMAA brackets break down:

The good news is that it's reassessed each year, so you can take steps now to manage this hidden "tax" and optimize your Medicare costs.

Here are five situations in which you could pay more than you should in Medicare surcharges and strategies that could help.

1. After a major life event

Many Medicare enrollees are unaware that IRMAA can be reassessed under certain circumstances if an appeal is submitted.

The Social Security Administration (SSA) outlines specific eligible life-changing events, with the most common being retirement (or a work reduction such as moving from full-time to part-time), marriage, divorce and death of a spouse. A full list is available on Form SSA-44.

Strategy: You should consider appealing if it's likely to move you into a lower IRMAA bracket. This won't be the case for every life event.

For example, if you got married and your joint income would have pushed both partners in a higher IRMAA bracket, appealing won't be beneficial.

If you decide to appeal, you have 60 days from receiving your initial determination notice to do it, with instructions included in that notice. To start, you'll need to contact the SSA and will likely file Form SSA-44 and provide supporting documentation.

Depending on timing, you might need to appeal two years in a row. As an example, someone retiring in 2026 might need to appeal twice: Once for their 2027 assessment (which would otherwise be based on their 2025 working income); and once for their 2028 assessment (which would otherwise be based on their 2026 working income).

2. When your taxable income is near an IRMAA threshold

Distributions from retirement accounts such as traditional IRAs and 401ks typically increase taxable income. If you're near a threshold, an unnecessary distribution could push you into the next tier. The only thing worse than triggering IRMAA is triggering it by just a few dollars.

Strategy: If your income has historically been toward the top or bottom of an IRMAA bracket, try to stay (or get) in the lower tier. Be thoughtful about taking retirement distributions from pre-tax accounts that could pop you into the next tier.

If you have a health savings account (HSA), you can use distributions to cover qualified medical expenses without increasing your taxable income, including paying the premiums, deductibles and copays for Medicare Parts A, B, C and D (but not Medigap premiums).

If you have Roth accounts, you might be able to take tax-free distributions to keep you under the next IRMAA threshold.

3. When you start taking required minimum distributions (RMDs)

RMDs are withdrawals that must be taken from certain retirement accounts starting at age 73. For those with substantial traditional (pre-tax) retirement assets, this can translate to a meaningful increase in taxable income when they start taking RMDs, which can result in a surprise IRMAA bill two years later.

Strategy: If an RMD is pushing you into a higher IRMAA bracket, and especially if you're toward the bottom of that income bracket, a qualified charitable distribution (QCD) might be useful.

A QCD is a direct transfer from an IRA to a qualified charity. It can help satisfy your RMD without increasing your taxable income (up to $111,000 for 2026), all while giving to your charity of choice.

4. When you're doing Roth conversions

A Roth conversion involves moving funds from a traditional IRA to a Roth IRA. Because so many retirees have the bulk of their retirement savings in pre-tax assets, there can be many advantages to completing Roth conversions: The potential for tax-free distributions, no RMDs, and a tax-free asset for your heirs.

The cost is paying taxes now on the converted amount.

The tax impact means it's a good idea to work with a financial adviser and tax professional to execute the conversion, but even then, many well-intentioned professionals forget to mention (or consider) the impact on IRMAA.

Strategy: When considering Roth conversions, you'll want to keep in mind the immediate and future impact to IRMAA. Increasing your taxable income might trigger IRMAA two years after the conversion, but the resulting Roth assets can help save on IRMAA in future years, both by reducing future RMDs and providing a source for tax-free withdrawals.

The key is to understand the short-term and long-term impacts. It might also make sense to spread a conversion across multiple years.

5. When you choose your filing status at tax time (if you're married)

Filers who are married have a choice at tax time to file jointly or separately. But because IRMAA is a surcharge (generally deducted directly from Social Security payments) rather than a true tax (paid and reported to the IRS), it's often not considered as part of the calculation in determining which filing status is more advantageous.

This is problematic because the IRMAA determination for married individuals filing separately is particularly steep (some would say punitive), likely because the government doesn't want couples to file separately solely to avoid triggering IRMAA for both spouses.

Couples — even those working with experienced tax professionals — might save a few hundred dollars on their taxes by filing separately, only to trigger thousands of dollars in annual IRMAA surcharges that could have been avoided.

Strategy: Whether you're doing your own taxes or working with a professional, make sure potential IRMAA surcharges are part of the calculation of whether to file jointly or separately.

Final thoughts

By coordinating distributions, conversions and filing decisions with Medicare thresholds, retirees can avoid thousands of dollars in unnecessary surcharges.

The earlier you incorporate IRMAA into your planning, the more opportunities you'll have to keep your healthcare costs in check.

Related Content

• Projected 2027 IRMAA Brackets and Surcharges for Medicare Part B and D
• 7 Ways to Plan Now to Save on Medicare IRMAA Surcharges Later
• Will Your Retirement Income Trigger the IRMAA This Year? (Plus, 6 Ways to Avoid it in the Future)
• How One Extra Dollar of Income Can Cost You Thousands in Retirement
• 4 Ways to Make Debt Your Friend Instead of Your Frenemy