Four Things to Know if Medicare’s IRMAA Kicks In
The income-related monthly adjustment amount, known as IRMAA, happens when your income exceeds a certain threshold. You can appeal if your circumstances change.


I was one of the early COVID movers, moving into my current home in June 2020. My wife was teaching kindergarten remotely, and my 2-year-old was finding new, dangerous ways to entertain herself. The space got very small, very fast.
As part of our move, I had all of our property and casualty policies reviewed. We decided to increase our auto coverage. Yes, the cost was higher, but the peace of mind was worth more than the additional premium. A classic cost-benefit analysis. However, paying a higher premium doesn’t always mean you’re getting more benefits.
If you are on Medicare and receive the dreaded income-related monthly adjustment amount (IRMAA) letter, there are four important things to know:
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
1. A higher premium does not equal more coverage.
Unlike my auto example above and pretty much every other type of insurance, your premium doubling does not mean that you get more coverage. This may sound tongue-in-cheek, but I don’t intend it that way.
Your income from two years ago determines your Medicare Part B and Part D premiums. Unlike Medigap plans, Part B (physician coverage) and Part D (prescription drug coverage) of Medicare are the same for everyone. While your premium changes from year to year, your coverage will remain the same.
2. Your premium is based on gross income (MAGI).
We live in a world where taxable income is more important than gross income because it dictates our income tax bracket. Oversimplifying, our taxable income is our adjusted gross income minus “below-the-line” deductions. Adjusted gross income (AGI) is the total of our taxable sources of income. Modified adjusted gross income is AGI plus municipal bond income. Confused yet? The important takeaway is that it’s hard (but not impossible) to reduce MAGI.
The way to reduce MAGI is through “above-the-line” deductions. Our go-tos include qualified charitable deductions (QCDs), self-employed retirement plan contributions (IRA, 401(k), etc.) and, if you’re 63 or 64, a health savings account (HSA). All of these have specific requirements for eligibility that you’ll want to evaluate with a financial professional.
3. It’s not forever.
Well, I guess, nothing is… But with Medicare premiums, it is most definitely a one-year adjustment. As we do our 2023 end-of-year planning, we are considering 2025 premiums.
The inspiration for this article was a number of people who ended up paying more because they did something without realizing its impact on their Medicare premium. They sold their family home. They converted money from an IRA to a Roth IRA. They took on consulting work that took them over the income threshold(s). I often have to deliver the bad news that the premium increase is correct, though maybe not fair. The silver lining is that it is just for one year.
4. You can appeal.
And you probably should. Too often, I see people who paid higher-than-necessary premiums because they didn’t appeal when they could. Form SSA-44, aka the life-changing event appeal form, outlines very specific situations that allow you to appeal your premium. They are:
- Marriage
- Divorce/annulment
- Death of your spouse
- Work stoppage
- Work reduction
- Loss of income-producing property
- Loss of pension income
- Employer settlement payment
Medicare is an expense that needs to be planned for in retirement. While we sometimes go to great lengths to avoid the Medicare IRMAA for our clients, there are other situations where the benefit of going over the threshold outweighs the cost of the additional premium. That may be the case when doing Roth conversions. It also may be the case when deciding whether to sell a stock or a piece of property.
There is a domino effect to every financial move in retirement. I hope this keeps the dreaded surprise of IRMAA less of a surprise.
Related Content
- What You Must Know About the Different Parts of Medicare
- What You’ll Pay for Medicare in 2024
- Medicare Checklist: Avoid Costly Enrollment Mistakes
- 10 Things to Know for Medicare Open Enrollment
- Is a Medicare Advantage Plan Right for You?
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

After graduating from the University of Delaware and Georgetown University, I pursued a career in financial planning. At age 26, I earned my CERTIFIED FINANCIAL PLANNER™ certification. I also hold the IRS Enrolled Agent license, which allows for a unique approach to planning that can be beneficial to retirees and those selling their businesses, who are eager to minimize lifetime taxes and maximize income.
-
$40,000 CD vs $40,000 High-Yield Savings Account - 3 Things Savers Should Consider Now
Both options offer risk-free methods to grow your savings. Learn how much you can earn with each, how they differ and which one suits you best.
-
I'm 51 and my portfolio is up. I'm planning to retire at 60 and want to start moving out of stocks. Is that smart?
We ask financial experts for advice.
-
Gray Divorce Can Throw Your Retirement a Curveball: What to Know
If you're entering retirement and going through a divorce at the same time, you've got some work to do to shore up your long-term financial security.
-
I'm a Real Estate Investing Expert: Optional 721 UPREIT DSTs Can Be the Best of Both Worlds
Before investing in any 721 UPREIT exchange, look for one that offers a straightforward, investor-friendly exit.
-
How an Expired Passport Thwarted Blackmail (and What Other Important Documents You Should Keep)
An optometrist produced his expired passport to foil a blackmail attempt by the daughter of a former employee. After proving he was out of the country on the date of a forged diary entry, he took it a step further.
-
Optimize, Grow, Retain: The Power of Annual Client Reviews
Financial advisers can use annual reviews to help enhance client outcomes, strengthen relationships and build their practice.
-
I'm a Real Estate Investing Pro: This Is What Investors Should Know About Truck Stop Investments
Truck stops might seem like good investments, but they can actually be a risky gamble due to unstable fuel prices, unreliable operators and coming changes in transportation. Instead, consider safer options like industrial or residential properties.
-
Don't Disinherit Your Grandchildren: The Hidden Risks of Retirement Account Beneficiary Forms
Standard retirement account beneficiary forms may not be flexible enough to ensure your money passes to family members according to your wishes. Naming a trust as the contingent beneficiary can help avoid these issues. Here's how.
-
This Is How Life Insurance Can Fund Your Dreams Now
Beyond a death benefit, life insurance can provide significant financial value and flexibility through 'living benefits' while you are still alive, helping with expenses like education, business ventures or retirement.
-
Potential Trouble for Retirees: A Wealth Adviser's Guide to the OBBB's Impact on Retirement
While some provisions might help, others could push you into a higher tax bracket and raise your costs. Be strategic about Roth conversions, charitable donations, estate tax plans and health care expenditures.