[The next update will be on June 10, 2026, when the government publishes the CPI data for May 2026.]
Seniors 65 or older can sign up for Medicare. The government refers to people who receive Medicare as “beneficiaries.” Medicare beneficiaries must pay a premium for Medicare Part B, which covers doctors’ services, and Medicare Part D, which covers prescription drugs. The premiums paid by Medicare beneficiaries cover about 25% of the program costs for Part B and Part D. The government pays the remaining 75%.
What Is IRMAA?
Medicare imposes surcharges on higher-income beneficiaries. The theory is that higher-income beneficiaries can afford to pay more for their healthcare. Instead of doing a 25:75 split with the government, they must pay a higher share of the program costs.
The surcharge is called IRMAA, which stands for Income-Related Monthly Adjustment Amount. This applies to both Traditional Medicare (Part B and Part D) and Medicare Advantage plans.
According to a Medicare Trustees Report, less than 10% of Medicare Part B beneficiaries paid IRMAA. The extra premiums they paid reduced the government’s share of the total Part B and Part D expenses by two percentage points. Big deal?
History of IRMAA
IRMAA was added to Medicare by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. The Republican Congress under President George W. Bush passed it in November 2003.
IRMAA started with only Part B. The Patient Protection and Affordable Care Act, passed in 2010 by the Democratic Congress under President Obama, expanded IRMAA to also include Part D.
The Bipartisan Budget Act of 2018, passed by the Republican Congress under President Trump, added a new tier for people with the highest incomes.
IRMAA has been the law of the land for over 20 years. Different congresses and administrations from different parties made small tweaks, but its structure hasn’t changed much since the beginning. IRMAA has become a bipartisan consensus. There’s no impetus for major changes.
MAGI
The income used to determine IRMAA is your Modified Adjusted Gross Income (MAGI) — which is your AGI plus tax-exempt interest and dividends from muni bonds — from two years ago. Your 2024 MAGI determines your IRMAA in 2026. Your 2025 MAGI determines your IRMAA in 2027. Your 2026 MAGI determines your IRMAA in 2028.
There are many definitions of MAGI for different purposes. The MAGI for ACA health insurance subsidies includes 100% of the Social Security benefits. The MAGI for IRMAA includes taxable Social Security benefits, but not untaxed Social Security benefits. If you read somewhere else that says that untaxed Social Security benefits are included in MAGI, they’re talking about a different MAGI, not the MAGI for IRMAA.
You can use Calculator: How Much of My Social Security Benefits Is Taxable? to calculate the taxable portion of your Social Security benefits. The new 2025 Trump tax law didn’t change how Social Security is taxed. It didn’t change anything related to the MAGI for IRMAA. See Social Security Is Still Taxed Under the New 2025 Trump Tax Law.
As if it’s not complicated enough, while not moving the needle much, IRMAA is divided into five income brackets. Depending on the income, higher-income beneficiaries pay 35%, 50%, 65%, 80%, or 85% of the program costs instead of 25%. As a result, they pay 1.4, 2.0, 2.6, 3.2, or 3.4 times the standard Medicare premium.
The threshold for each bracket can cause a sudden increase in the monthly premium amount you pay. If your income crosses into the next bracket by $1, your Medicare premiums can suddenly jump by over $1,000 per year. If you are married and filing a joint tax return, and both of you are on Medicare, $1 more in income can make Medicare premiums jump by over $1,000/year for each of you.
* The last bracket on the far right isn’t displayed in the chart.
If your income is near a bracket cutoff, try to keep it low and stay in a lower bracket. Using the income from two years ago makes it more difficult to manage.
2026 IRMAA Brackets
The standard Part B premium in 2026 is $202.90 per person per month. The income on your 2024 federal tax return (filed in 2025) determines the IRMAA you pay in 2026.
| Part B Premium | 2026 Coverage (2024 Income) |
|---|---|
| Standard | Single: <= $109,000 Married Filing Jointly: <= $218,000 Married Filing Separately <= $109,000 |
| 1.4x Standard | Single: <= $137,000 Married Filing Jointly: <= $274,000 |
| 2.0x Standard | Single: <= $171,000 Married Filing Jointly: <= $342,000 |
| 2.6x Standard | Single: <= $205,000 Married Filing Jointly: <= $410,000 |
| 3.2x Standard | Single: < $500,000 Married Filing Jointly: < $750,000 Married Filing Separately < $391,000 |
| 3.4x Standard | Single: >= $500,000 Married Filing Jointly: >= $750,000 Married Filing Separately >= $391,000 |
Source: CMS news release
Higher-income Medicare beneficiaries also pay a surcharge for Part D. The IRMAA income brackets are the same for Part B and Part D. The Part D IRMAA surcharges are relatively lower in dollars.
I also have the tax brackets for 2026. Please read 2026 Tax Brackets, Standard Deduction, Capital Gains, QCD if you’re interested.
2027 IRMAA Brackets
We have seven data points right now out of the 11 needed for the IRMAA brackets in 2027 (based on 2025 income).
If annualized inflation from May through August 2026 is 0% (prices staying flat at the latest level) or 3% (approximately a 0.25% increase every month), these will be the 2027 numbers:
| Part B Premium | 2027 Coverage (2025 Income) 0% Inflation | 2027 Coverage (2025 Income) 3% Inflation |
|---|---|---|
| Standard | Single: <= $112,000 Married Filing Jointly: <= $224,000 Married Filing Separately <= $112,000 | Single: <= $112,000 Married Filing Jointly: <= $224,000 Married Filing Separately <= $112,000 |
| 1.4x Standard | Single: <= $141,000 Married Filing Jointly: <= $282,000 | Single: <= $141,000* or 142,000 Married Filing Jointly: <= $282,000* or 284,000 |
| 2.0x Standard | Single: <= $176,000 Married Filing Jointly: <= $352,000 | Single: <= $176,000* or $177,000 Married Filing Jointly: <= $352,000* or 354,000 |
| 2.6x Standard | Single: <= $211,000 Married Filing Jointly: <= $422,000 | Single: <= $211,000* or 212,000 Married Filing Jointly: <= $422,000* or 424,000 |
| 3.2x Standard | Single: < $500,000 Married Filing Jointly: < $750,000 Married Filing Separately < $388,000 | Single: < $500,000 Married Filing Jointly: < $750,000 Married Filing Separately < $388,000 |
| 3.4x Standard | Single: >= $500,000 Married Filing Jointly: >= $750,000 Married Filing Separately >= $388,000 | Single: >= $500,000 Married Filing Jointly: >= $750,000 Married Filing Separately >= $388,000 |
Some of the projected 2027 brackets are the same for 0% inflation and 3% inflation due to rounding. The unrounded numbers for 3% inflation are higher, but not high enough to break into the next level after rounding.
If you’re married filing separately, you may have noticed that the 3.2x bracket goes down with inflation. That’s not a typo. If you look up the history of that bracket (under heading C), you’ll see it went down from one year to the next. That’s the law. It puts more people married filing separately with a high income into the 3.4x bracket.
Because the formula compares the average of 12 monthly CPI numbers over the average of 12 monthly CPI numbers in a base period, even if prices stay the same in the following months, the average of the next 12 months will still be higher than the average in the previous 12 months.
To use exaggerated numbers, suppose gas prices went up from $3/gallon to $3.50/gallon over the last 12 months. The average gas price in the last 12 numbers was maybe $3.20/gallon. When gas price inflation becomes 0%, it means it stays at the current price of $3.50/gallon. The average for the next 12 months is $3.50/gallon. Brackets based on an average gas price of $3.50/gallon in the next 12 months will be higher than brackets based on an average gas price of $3.20/gallon in the previous 12 months.
If you really want to get into the weeds of the methodology for these calculations, please read this reply on comment page 2 and this other comment on page 4.
The Missing October 2025 CPI
The government did not and will not publish the CPI number for October 2025 because it didn’t collect the necessary price data during a government shutdown. It’s unclear how the Social Security Administration will calculate the 12-month average with only 11 data points.
The Treasury Department used 325.604 as the October CPI to calculate interest on inflation-indexed Treasury bonds. The Social Security Administration won’t necessarily use the same number for IRMAA. I calculated the projected 2027 brackets in two ways: (a) using a straight average of the projected 11 monthly data points, omitting October 2025; and (b) using 325.604 for October 2025. The projected 2027 brackets are largely the same under the two methods due to rounding. I put an asterisk on the number calculated by method (b) where they differ.
2028 IRMAA Brackets
We have no data point right now out of the 12 needed for the IRMAA brackets in 2028 (based on 2026 income). We can only make preliminary estimates and plan for some margin to stay clear of the cutoff points.
If annualized inflation from May 2026 through August 2027 is 0% (prices staying flat at the latest level) or 3% (approximately a 0.25% increase every month), these will be the 2028 numbers:
| Part B Premium | 2028 Coverage (2026 Income) 0% Inflation | 2028 Coverage (2026 Income) 3% Inflation |
|---|---|---|
| Standard | Single: <= $114,000 Married Filing Jointly: <= $228,000 Married Filing Separately <= $114,000 | Single: <= $117,000 Married Filing Jointly: <= $234,000 Married Filing Separately <= $117,000 |
| 1.4x Standard | Single: <= $143,000 Married Filing Jointly: <= $286,000 | Single: <= $147,000 Married Filing Jointly: <= $294,000 |
| 2.0x Standard | Single: <= $178,000 Married Filing Jointly: <= $356,000 | Single: <= $183,000 Married Filing Jointly: <= $366,000 |
| 2.6x Standard | Single: <= $214,000 Married Filing Jointly: <= $428,000 | Single: <= $219,000 Married Filing Jointly: <= $438,000 |
| 3.2x Standard | Single: < $506,000 Married Filing Jointly: < $759,000 Married Filing Separately < $392,000 | Single: < $518,000 Married Filing Jointly: < $777,000 Married Filing Separately < $401,000 |
| 3.4x Standard | Single: >= $506,000 Married Filing Jointly: >= $759,000 Married Filing Separately >= $392,000 | Single: >= $518,000 Married Filing Jointly: >= $777,000 Married Filing Separately >= $401,000 |
Risk of Deflation
The CPI numbers were elevated by high energy prices due to the war with Iran in recent months. The 0% inflation numbers assume that prices will stay at the current level. Energy prices can fall to the pre-war levels if the war is resolved quickly. If that happens, CPI numbers in the upcoming months can drop below the current level, which may push the IRMAA numbers below the projections with 0% inflation.
On the other hand, if the war drags on, prices can escalate as existing inventories deplete, which may move the IRMAA numbers above the projections with 3% inflation.
Roth Conversion Tools
When you manage your income by doing Roth conversions, you must watch your MAGI carefully to avoid accidentally crossing one of these IRMAA thresholds by a small amount and triggering higher Medicare premiums.
I use two tools to help with calculating how much to convert to Roth. I wrote about these tools in Roth Conversion with TurboTax What-If Worksheet and Roth Conversion with Social Security and Medicare IRMAA.
Nickel and Dime
The standard Medicare Part B premium is $202.90/month in 2026. A 40% surcharge on the Medicare Part B premium is $974/year per person or $1,948/year for a married couple both on Medicare.
In the grand scheme, when a couple on Medicare has over $218,000 in income, they’re already paying a large amount in taxes. Does making them pay another $2,000 make that much difference? It’s less than 1% of their income, but nickel-and-diming just makes people mad. People caught by surprise when their income crosses into a higher bracket by just a small amount are angry at the government. Rolling it all into the income tax would be much more effective.
Oh well, if you are on Medicare, watch your income and don’t accidentally cross a line for IRMAA.
IRMAA Appeal
If your income two years ago was higher because you were working at that time, and now your income is significantly lower because you retired (“work reduction” or “work stoppage”), you can appeal the IRMAA initial determination. The “life-changing events” that make you eligible for an appeal include:
- Death of spouse
- Marriage
- Divorce or annulment
- Work reduction
- Work stoppage
- Loss of income from income producing property
- Loss or reduction of certain kinds of pension income
You file an appeal with the Social Security Administration by filling out Form SSA-44 to show that although your income was higher two years ago, you have a reduced income now due to one of the life-changing events above. For more information on the appeal, see Medicare Part B Premium Appeals.
Not Penalized For Life
If your income two years ago was higher and you don’t have a life-changing event that makes you qualify for an appeal, you will pay the higher Medicare premiums for one year. The IRMAA surcharge goes into the Medicare budget. It helps to keep Medicare going for other seniors on Medicare.
IRMAA is re-evaluated every year as your income changes. If your higher income two years ago was due to a one-time event, such as realizing capital gains or taking a large withdrawal from your IRA, your IRMAA will decrease automatically when your income comes down in the following year. It’s not the end of the world to pay IRMAA for one year.
Learn the Nuts and Bolts
I put everything I use to manage my money in a book. My Financial Toolbox guides you to a clear course of action.
Bob says
Jeff. The IRS must have included on form 1040 the “QCD” checkbox, as well as the IRA “Rollover” checkbox, for a reason. At least that seems to be the point with respect to the 2025 1040 return, given that financial institutions issuing the 1099-R for 2025 had the “option” (not mandatory) to show a “Y” (QCD) rather than a “7” (normal distribution) in box 7. I honestly don’t think it would be preferable for taxpayers who do a QCD to populate those line 4 items on the 1040. I think it would eliminate any question as to the role of the QCD on the tax return for any 1099-R that did not show a “Y” on the 1099-R, as opposed to simply offsetting the IRA gross distribution with the QCD amount as a calculation and then showing the net taxable distribution on line 4b of the return.
Since you’re saying that the IRS has made it mandatory for 1099-R issuers to show a “Y” for a QCD in box 7 of the 1099-R starting with tax year 2026, the IRS may decide (for 2026 1040 purposes) not to include the QCD checkbox on the 1040. I think they included the QCD checkbox on the 2025 1040 only because code “Y” was not mandatory for the tax year 2025 1099-R form.
Jeff Enders says
Bob – it’ll be mid-summer before the draft version of the 2026 1040 is available.
Richard says
I suspect the 2026 return will still need a QCD checkbox since it will not be possible for all 1099-R providers to know that a distribution is a QCD and so would not put a Y down. Schwab, for example, allows one to write checks drawn on an accompanyiong IRA bank account. It will not know which of those checks are for QCDs and which are not. Unless it asks the IRA holder to specify somehow that a paarticular check is for a QCD it would not be able to issue a 1099-R with a Y code. That means there would have to be some other way for the taxpayer to indicate that there is a QCD.
Nancy Memmel says
Sorry, no comment here I just clicked on the link in my e-mail to get to the comments but through poor mouse control hit the unsubscribe link instead… sigh.
John F says
Bob
I stand by my comment regarding box 4c(3). Please provide where in the 2025 1040 Instructions it shows: “enter the QCD $ amount in 4(c)(3)”.
Bob says
John. See “Exception 3” on page 27 of the 1040 instructions. It covers how to report the portion of an IRA distribution associated with a QCD.
John F says
Bob
Exception 3 requires the QCD box be checked. That’s it. Box 3 has nothing to do with a QCD. Subtracting 4b (IRA taxable amount) from 4a (IRA distribution) = Amount of QCD. There isn’t any reason to have the QCD shown anywhere else.
Richard says
Bob
> Subtracting 4b (IRA taxable amount) from 4a (IRA distribution) = Amount of QCD.
Unless there is also a rollover.
Bob says
Do whatever you want on the 1040 return. As I previously indicated, my recommendation is to check the QCD box on line 4(c)(2) and enter the QCD amount on line 4(c)(3), whether or not the financial institution indicates a “Y” in the box 7 (Distribution Code) on a 2026 1099-R form. I just can’t see showing the net IRA distribution (i.e., gross distribution minus the QCD amount) on line 4b without also checking the box on line 4(c)(2) and enter the QCD amount on line 4(c)(3).
John F says
And your recommendation is incorrect. Box 3 has nothing to do with QCD. It has to do with a HSA funding distribution (HFD). Read Exception 4 on page 27 and Line 4c on page 28 and I quote “If Exception 4 applies to you, check box 3 on line 4c and enter ‘HFD’ in the entry space next to box 3”.
marvin says
if you have $2,000,000. in an rollover ira,does it make sense to leave 50 percent to wife and 50 percent to 2 children,to lessen children’s tax , they are in high tax states with income over $300,000. I value your opinion. thanking you in advance.
MTG says
I’ve been doing Roth Conversions to avoid taxes in the future while Federal Income taxes are on sale now. If I pass before my wife, she becomes an individual, rather than joint tax filer. Our kids are already in a higher bracket than we are. Big picture says convert fast keeping IRMAA in mind.
The Wizard says
Yes indeed, to Marvin.
This wise plan spreads the kids timeline for depleting their inherited IRAs out to longer than ten years, up to twenty possibly.
And the surviving spouse pays less income tax.
This assumes the surviving spouse has plenty to live on without half of your IRA…
Mike W says
Smart move. It might be better to leave less to wife and more to younger children so more can be depleted over their longer lifetime, assuming wife can live on less than 50%, and of course assuming no family issues.
We don’t have any kids so it’s pretty simple for us. Our intent is for the survivor to ‘assume’ the deceased’s TIRA and Roth’s in their name, which will combine both into one TIRA and one Roth, and of course continue to take the normal RMD albeit a much bigger one now that the survivor will be older, single and with a substantial amount to be taxed.
marvin says
thank you , your replies are always appreciated and thoughtful,marvin
Liftlock says
Marvin,
I agree with the others that it might be smart move. However, I would be cautious about reducing your wife’s assets without considering how long your wife might live and how much money she might need if she lives well beyond a normal life expectancy requiring extended assisted living care. My sister is likely to reach her 104th birthday this week and she needs 24 /7 in home care. The costs of in home care is a tidy sum and the family has become concered about her out living the financial assets available to care for her.
If your kids are high income earners they should be fine without an early inheritance of half of your IRA. One of the unintended economic consequences of the 10 year distribution rule for inherited IRAs is that it may cause productive citizens to retire earlier than might otherwise be the case and become unproductive contributors to society.
MTG says
If someone decides to retire because they have sufficient $ for whatever reason, there is a great opportunity to be a “productive citizen” through volunteerism. Retirement usually also opens a paid position for someone else.
tjk144 says
Another factor to consider in addition to the difference in tax brackets of the suriviving spouse vs children is the estate tax in your state. The estate tax in Illinois where we live is very punitive. If the value of your estate exceeds $4 million, the first $6 miiion (not just the amount over $4 million) is taxed at 5%. Between $6 million and $16 million is taxed at 10%. Thus there is great incentive to get the estate of the surviving spouse under $4 million to avoid the 5% tax on everything up to $6 million. Having the childen inherit 50% of your IRA is one way to accomplish this.
tjk144 says
Bob — While New York’s estate tax is bad, I would gladly take it over Ilinois’ where the cliff starts at $4,000,000.01. Plus any amount gifted over the annual exemption that requires a gift tax return filing reduces this amount dollar for dollar. Also Illinois has the highest real estate taxesin the nation. Just a horrible state to live in. Pritzker and his democratic cohorts have driven it into the ground. Unfortunately I was born here and If I didn’t have so many family ties here, I would move to another more tax friendly state that was more in line with my conservative political views.
Bob says
John. The procedures presented on pg 27 of the 1040 instructions are similar between Exception 3 (QCD distribution) and Exception 4 (HSA/HFD distribution).
Exception 3 is for a QCD distribution and it says: “If all or part of the distribution is a qualified charitable distribution (QCD), enter the total distribution on line 4a. If the total amount distributed is a QCD, enter -0- on line 4b. If only part of the distribution is a QCD, enter the part that is not a QCD on line 4b unless Exception 2 applies to that part. Check box 2 on line 4c.”
The line 4c instructions on pg 28 says: “If Exception 1 applies to you, check box 1 on line 4c. If Exception 3 applies to you, check box 2 on line 4c. If Exception 4 applies to you, check box 3 on line 4c and enter “HFD” in the entry space next to box 3.”
Therefore, it appears that box 3 on line 4c is to indicate “HFD”, rather than my prior comment to enter the QCD $ amount in box 3 on line 4c. In conclusion, if a taxpayer has both a QCD and an HFD, he/she would check box 2 (QCD) on line 4c and also indicate “HFD” in box 3 on line 4c.
The instructions on pg 28 goes on to say “If more than one exception applies, check a box for each exception and include a statement showing the amount of each exception, for example, “Line 4b – $1,000 Rollover and $500 HFD.”
Bob says
tjk144. Estate taxes in New York are also punitive. For deaths in 2026, the New York estate tax exemption is $7.35 million per individual . Estates exceeding this threshold are taxed at progressive rates from 3.06% to 16%. New York has a “cliff” provision: if the estate exceeds the exemption by more than 5%, the exemption is lost entirely, subjecting the whole estate to tax.
Key Aspects of NY Estate Tax:
The “Cliff”: If an estate is valued at 105% or less of the exemption, taxes only apply to the excess. If it exceeds 105% (e.g., above \(\approx\$7.7M\) in 2026), the entire estate is taxed from the first dollar.
Tax Rates: Graduated from 3.06% to a maximum of 16%.
Gifts: While NY has no gift tax, gifts made within three years of death are included in the taxable estate.
Non-Residents: Non-residents owning real or tangible personal property located in New York may owe estate taxes.
Portability: NY does not have federal-style portability, meaning a deceased spouse’s unused exemption is lost if not properly planned for (e.g., via a credit shelter trust).
marvin says
can’t spread kids withdrawals beyond 10 years
The Wizard says
Sort of.
Parent #1 passes and wills each kid $200k IRA, remainder to surviving spouse. Kids have 10 years to empty the inherited IRA.
12 years after #1 death, parent #2 passes and wills each kid a percentage of the remaining IRA. Kids start a new 10-year clock to empty that inherited IRA…
Jeff Enders says
Wizard – what is the logic of the approach?
who is expected to have the higher tax bracket? surviving spouse or children?
The Wizard says
To Jeff,
The logic is based on allowing the “children” to deplete their combined tIRA inheritance over a period longer than the standard ten years, up to twenty years in some cases…
Jeff Enders says
Wizard, but if the children are in a higher tax bracket than the surviving spouse, what is the benefit?
yes, they can deplete it over more than 10 years, but if the children pay higher taxes, then why do it especially if there is absolutely any risk of the surviving spouse running out of money?
If the children are in a higher tax bracket, wouldn’t it be better for the surviving spouse to inherit the whole TIRA, which increases the chances that when the surviving spouses passes, the children are closer to their own retirement, and presumably their own lower tax rate?
I’ve just never seen any one else pose the benefit of creating two 10 year RMD streams. o I don’t understand the logic.
The Wizard says
If the married couple is basically broke or are barely breaking even in retirement, then it makes zero sense to plan on any early disbursement to heirs, correct.
But if they have $10 Million or more in financial assets, the situation is different.
Specific details matter…
JoeTaxpayer says
And, if the couple is in-between, not broke, but not enough to want to let half go when one passes, it’s not all-or-none.
Couple can make use of Roth conversions to top off the lower brackets each year, mitigating the damage their kids will face.
Or – easy to split the beneficiary so the kid(s) get a portion on death of first spouse, but living spouse gets the rest.
Agree, 100% with Wizard, the details matter, both for the couple, and the kids.
ros says
I did a direct transfer this year in March. Will this affect my but that is how the credit union policy regularly did it if you did not wire it. Will this affect my income for IRMAA. I did not touch my the check. It was sent to the new institution.
The Wizard says
You’re not giving us enough info to understand what you did .
You mention a credit union, so was this a checking account from which the money came?
And then what was the destination: the custodian and the type of account?
Richard says
Are you talking about a direct transfer from a traditional to another traditional or a direct transfer from a traditional to a Roth?
Ros says
The credit union deposited the check in a checking account I use once a year for my RMD. They made out a cashier check to the other instituion as a tradtional IRA for the benefit of me and the traditional Ira and the CD account number it could be added to. Years ago when I did this I checked a box that it was added to another IRA at tax time. But I have been on Medicare for many years now and I don’t want to be in IRMAA. Will this count as a income even though this was a direct transfer and I did not touch the check. It was a cashier check and they wrote it out and they mailed it. Both were in other states. I am quite elderly and combining accounts.
Harry Sit says
So you had involved 3 institutions: institution A, institution B, and the credit union. If institution A sent a check payable to institution B for the benefit of you, it would have been a direct transfer. Because you put your checking account at the credit union in the middle, it was an indirect rollover.
It’s still not taxable unless you had taxes withheld from institution A, but you only get to do an indirect rollover once every rolling 12 months. I hope you hadn’t done the same in the previous 12 months.
And be careful not to do it indirectly again too soon. Work with A and B alone. Don’t put the credit union in the middle.
The Wizard says
Your RMD always counts as Ordinary Income and having it sent to your checking account is normal.
But you cannot contribute money to either type of IRA unless you have earned income from employment, which I’m guessing you probably do not.
You also cannot do a rollover of your RMD into either type of IRA; that RMD money generally needs to stay in your taxable account.
So this traditional IRA contribution or rollover is likely illegal…
Richard says
Are you talking about a direct transfer from a traditional IRA to another traditional IRA or a direct transfer from a traditional IRA to a Roth IRA?
ros says
Both instituions has it designated as a direct transfer when I wrote and ask and them in my PM. My question is –will this box be able to be checked as a direct transfer and not count of income for IRMAA on my tax return.
I did not ever have taxes taken out. I always do the RMD in Dec. I have enough taxes automatically taken out of other income even 25% of my SS is taken out. I have a certain fixed amount taken out of other income for federal taxes and have always had a refund for over 60 years. Only had to pay state taxes twice. This year I sent in a check to pay the state income taxes for the first time all at once for the year because no taxes are taken out of pensions now because everyone this year does not pay state taxes on pensions and I have a lot of interest.
Harry Sit says
You can’t rely on side communication because people often misunderstand each other. Only the 1099, or lack of it, will show officially how it’s treated.
Doing RMD in December is a bad habit when you will also do other things with an IRA. As previously discussed, the first sums coming out of an IRA in a year are considered to be the RMD. Do the RMD and QCD in January and get it over with. Then you’re free to do other things.
The Wizard says
Harry is correct. You must complete your RMD obligation on a tax-deferred account before you can legally do a direct rollover from that account to a new custodian or do a Roth conversion from that account.
I’m in a similar situation and complete my quarterly RMD in mid October which gives me time at year-end to plan additional transactions…
Lou says
This is incorrect. Direct rollovers or transfers from one institution to another can be done anytime. Indirect or 60-day rollovers, however, can only be done after your RMD is satisfied.
tjk144 says
Lou is correct. With a direct transfer, no funds are leaving your IRA and can be done before or after an RMD is taken.
The Wizard says
I disagree…
Lou says
It’s easy to look up. If you do, you will see that you are wrong.
tjk144 says
When you do a direct transfer (where the money moves directly between financial institutions), the IRS does not view this as a “distribution.” Because no money was actually paid out to you, the “RMD-first” rule that applies to rollovers does not apply here.
The Responsibility Moves: When you transfer the funds, your RMD obligation moves with it. The new custodian will eventually need to know the December 31st balance of the old account from the previous year to help you calculate the correct RMD amount for the current year.
The Deadline Stays: You still must ensure the total RMD amount is withdrawn from the new account (or another IRA you own) by December 31, 2026.
Lou says
Thank you tjk144 for this correct response.
Ros says
Richard,
I was going from a mature traditional IRA in a credit union to another credit union that I can add it to a traditional IRA I have at that credit union. I will take my RMD in Dec as I have since I had to start taking it years ago and when it is put in my checking account it that 2nd credit union if my income allows I will do my roth conversion. They also allow me to put the conversion in a Roth IRA I have with them which I will do if if the rate I have is better than the rate they have at the time and if they do no have a higher rate at that time many times I can add my RMD to the newer rate and many times they have put the older CD and the Roth conversion together with no penalty. Last year they did all the CD’s I had with them at the higher rate. But they do not do that every year. I have been converting every year since they allowed it in the 2011 income and did the Roth’s at work for both my husband and I when my company started the Roths and did it for the 10 years to 2008 when I had to retire to care for my disabled husband 24 hours a day. I did the traditional IRA’s for me and a spousal IRA for both of us since 1978 until my work started the Roths and the 401k when my employer started it.
When my husband was working he also did the 15% in the 401k when they started it the 1080’s and his company employees voted to be self insured and he started working there in 1965 or 1966 and all the employees put in the same amount per hour worked in that pension and when they retired each hour of each year was paid on the amount for that year for each hour worked. Double time you put in double and that was counted as double hours in the pay out. He loved his job and had 30 years of actual working when they put him on 100% disability and he had 43 pension years in when it was calculated.
Richard says
OK I just wanted to make sure there were no implicit assumtions we were making.
Direct transfer form traditional to traditional would not run afoul of any rules. Direct transfer from traditional to Roth must be done AFTER you have made the RMDs.
Gary Egnasko says
Harry – Any updates on how Gov’t will be treating the missing October CPI data points for social security, federal tax brackets or IRMAA brackets? For my spreadsheets, I am using the average of the September and December indices as a guesstimate. Any better insights would be appreciated.
Harry Sit says
I haven’t seen anything new from government sources. I suspect they will use a straight average of the available 11 months for federal tax brackets and IRMAA, which produces a higher average and generates fewer complaints.
Social Security isn’t affected, because it uses Q3 averages. October 2025 was in Q4.
Tom P says
In late April I received the following in an email from the Bureau of Labor and Statistics:
BLS has engaged the National Association for Business Economics (NABE) and the Committee on National Statistics (CNSTAT) to conduct expert panels regarding approaches for handling missing October and November 2025 Consumer Expenditure data from the 2025 lapse in appropriations and its impact on the Consumer Price Index. These meetings will take place May 7 and May 8, 2026, and they are open to the public.
Big-Pops61 says
Seems to me that the easiest way would be to follow the same methodology that the treasury used to fill in the missing refcpi values for TIPS. The formula used has been around for a while, long before this happened. A little surprising (not really) that the BLS didn’t already have something codified for just such a case.
https://www.treasurydirect.gov/files/laws-and-regulations/auction-regulations-uoc/auct-reg-gsr-31-cfr-356.pdf#page=17
Harry Sit says
Thank you, Tom P. This page has links to the meeting recordings on YouTube.
https://www.bls.gov/cex/notices/2026/missing-ce-data-impact.htm
Experts only give opinions and suggestions. They don’t make decisions.
Richard says
Thanks. I had not seen anything about that, I wonder what the general consensus there was.
Looking at the undelying legislation I cannot see that the people setting the IRMAA thresholds have any authority other than to take the average of the 11 figures unless the BLS itself publishes a missing figure. Howver if a figure for October 2025 is generated I suspect that, as set out in https://www.bls.gov/cpi/factsheets/approximating-missing-data.htm it would be the geometric average of the September and November figures, which would give 324.461 rather than the 325.604 that the TIPS method gave.
The method used for TIPS would, IMV, be wholly inappropriate. For TIPS what matters is not accuracy or precision but rather a method that gives a figure NOW with any problems that causes being dealt with by the next proper figure coming out. The reason speed over accuracy is important is because TIPs are traded on a day to day basis with the purchaser “buying” part of the next month’s interest payment, so that figure needs to be known before the publication of any subsequent month’s CPI figure. You can see this in the fact that whenever a provisional CPI figure is released, that figure is used and the revised figure is not substituted in any later calculations. The need for immediate certainty trumps anything. The method for TIPS, just inflating the previous month’s figure by the average of the last 12 months gives a good “quick and dirty” figure for immediate use. However where the point is to make a calculation later it is not the best method because it ignores some highly pertinant later data.
Big-Pops61 says
In the case of refCPI, there was not an immediate need for speed to plug October 2025, since daily refCPI is calculated as a linear extrapolation of 2 month’s prior CPI-U numbers from the BLS. In this case, the first REFCPI calculated based on October (and November) numbers was January, 2026
It is true that the October estimated number wasn’t needed for as long as numbers are needed for IRMAA, tax brackets, etc. since the Feb 1st refCPI is based on November & December published CPI-U.
Richard says
> A little surprising (not really) that the BLS didn’t already have something codified for
> just such a case
It is not BLS’s job to have provisions for what happens if it is prevented from doing its job: it is the job of those who rely on the BLS’s figures being available to have provisions for what happens when they are not; in this case the people who administer Medicare and those who drafted the regulations. The people at the Treasury did their job (in part) by having provisions about what to do for TIPS, but interestingly, have no provisons about what to do about income tax, where various threshholds are also linked to the CPI. The people at Medicare dropped the ball completely (or maybe considered the point and reckoned that just taking the average of what figures were available was good enough).
The BLS did try to help by saying what the best method of interpolation is, but really that is about all that they can do when circumstances prevent them from generating a figure.