[Updated on January 15, 2025 after the release of the inflation number for December 2025. The next update will be on February 12, 2025.]
Seniors 65 or older can sign up for Medicare. The government calls people who receive Medicare 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 other 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 the Medicare Trustees Report, 7% of Medicare Part B beneficiaries paid IRMAA. The extra premiums they paid lowered the government’s share of the total Part B and Part D expenses by two percentage points. Big deal?
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 2022 MAGI determines your IRMAA in 2024. Your 2023 MAGI determines your IRMAA in 2025. Your 2024 MAGI determines your IRMAA in 2026.
There are many definitions of MAGI for different purposes. The MAGI for subsidies on health insurance from the ACA marketplace includes untaxed Social Security benefits. The MAGI for IRMAA doesn’t include 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.
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 times, 2.0 times, 2.6 times, 3.2 times, or 3.4 times the standard Medicare premium.
The threshold for each bracket can cause a sudden jump in the monthly premium amount you pay. If your income crosses over to the next bracket by $1, all of a sudden your Medicare premiums can jump by over $1,000/year. If you are married filing a joint tax return and both of you are on Medicare, $1 more in income can make the 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.
So if your income is near a bracket cutoff, see if you can manage to keep it down and make it stay in a lower bracket. Using the income from two years ago makes it more difficult to manage.
2025 IRMAA Brackets
The income on your 2023 IRS tax return (filed in 2024) determines the IRMAA you pay in 2025.
| Part B Premium | 2025 Coverage (2023 Income) |
|---|---|
| Standard | Single: <= $106,000 Married Filing Jointly: <= $212,000 Married Filing Separately <= $106,000 |
| 1.4x Standard | Single: <= $133,000 Married Filing Jointly: <= $266,000 |
| 2.0x Standard | Single: <= $167,000 Married Filing Jointly: <= $334,000 |
| 2.6x Standard | Single: <= $200,000 Married Filing Jointly: <= $400,000 |
| 3.2x Standard | Single: < $500,000 Married Filing Jointly: < $750,000 Married Filing Separately < $394,000 |
| 3.4x Standard | Single: >= $500,000 Married Filing Jointly: >= $750,000 Married Filing Separately >= $394,000 |
Source: Medicare Costs, Medicare.gov
If you’re married filing separately, you may have noticed that the bracket for 3.2x standard goes down in 2025 compared to 2024. 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 standard bracket.
The standard Part B premium is $185/month in 2025. Higher-income Medicare beneficiaries also pay a surcharge for Part D. The income brackets are the same. The Part D IRMAA surcharges are relatively smaller in dollars.
I also have the tax brackets for 2025. Please read 2025 Tax Brackets, Standard Deduction, Capital Gains, etc. if you’re interested.
2026 IRMAA Brackets
We have four data points right now out of 12 needed for the IRMAA brackets in 2026 (based on 2024 income). We can only make some preliminary estimates and plan for some margin to stay clear of the cutoff points.
If annualized inflation from January 2025 through August 2025 is 0% (prices staying flat at the latest level) or 3% (approximately a 0.25% increase every month), these will be the 2026 numbers:
| Part B Premium | 2026 Coverage (2024 Income) 0% Inflation | 2026 Coverage (2024 Income) 3% Inflation |
|---|---|---|
| Standard | Single: <= $108,000 Married Filing Jointly: <= $216,000 Married Filing Separately <= $108,000 | Single: <= $108,000 Married Filing Jointly: <= $216,000 Married Filing Separately <= $108,000 |
| 1.4x Standard | Single: <= $135,000 Married Filing Jointly: <= $270,000 | Single: <= $136,000 Married Filing Jointly: <= $272,000 |
| 2.0x Standard | Single: <= $169,000 Married Filing Jointly: <= $338,000 | Single: <= $170,000 Married Filing Jointly: <= $340,000 |
| 2.6x Standard | Single: <= $203,000 Married Filing Jointly: <= $406,000 | Single: <= $204,000 Married Filing Jointly: <= $408,000 |
| 3.2x Standard | Single: < $500,000 Married Filing Jointly: < $750,000 Married Filing Separately < $392,000 | Single: < $500,000 Married Filing Jointly: < $750,000 Married Filing Separately < $392,000 |
| 3.4x Standard | Single: >= $500,000 Married Filing Jointly: >= $750,000 Married Filing Separately >= $392,000 | Single: >= $500,000 Married Filing Jointly: >= $750,000 Married Filing Separately >= $392,000 |
Higher inflation raises the IRMAA brackets in general, except for the 3.2x standard for married filing separately, which goes down with inflation and puts more people married filing separately with a high income into the 3.4x standard 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.
2027 IRMAA Brackets
We have no data point right now out of 12 needed for the IRMAA brackets in 2027 (based on 2025 income). We can only make some preliminary estimates and plan for some margin to stay clear of the cutoff points.
If annualized inflation from January 2025 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: <= $108,000 Married Filing Jointly: <= $216,000 Married Filing Separately <= $108,000 | Single: <= $112,000 Married Filing Jointly: <= $224,000 Married Filing Separately <= $112,000 |
| 1.4x Standard | Single: <= $135,000 Married Filing Jointly: <= $270,000 | Single: <= $140,000 Married Filing Jointly: <= $280,000 |
| 2.0x Standard | Single: <= $169,000 Married Filing Jointly: <= $338,000 | Single: <= $175,000 Married Filing Jointly: <= $350,000 |
| 2.6x Standard | Single: <= $203,000 Married Filing Jointly: <= $406,000 | Single: <= $210,000 Married Filing Jointly: <= $420,000 |
| 3.2x Standard | Single: < $500,000 Married Filing Jointly: < $750,000 Married Filing Separately < $392,000 | 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 >= $392,000 | Single: >= $500,000 Married Filing Jointly: >= $750,000 Married Filing Separately >= $388,000 |
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 $185/month in 2025. A 40% surcharge on the Medicare Part B premium is $888/year per person or $1,776/year for a married couple both on Medicare.
In the grand scheme, when a couple on Medicare has over $212,000 in income, they’re already paying a large amount in taxes. Does making them pay another $1,776 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 over to 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 the form SSA-44 to show that although your income was higher two years ago, you had a reduction in 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, when your income comes down in the following year, your IRMAA will also come down automatically. It’s not the end of the world to pay IRMAA for one year.
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R. Stubb says
Last post showed a mfj range for 2026 of 216k @ 0% inflation to 218k @ 3% inflation.
This post showed a mfj range for 2026 of 216k @ 0% inflation to 216k @ 3% inflation.
I dont understand how this could be.
Harry Sit says
It’s like running. You were told if you run at a 10:00/mile pace, you would run 6 miles in an hour. After 10 minutes, you actually ran 0.9 miles. Now you’re told if you run at a 10:00/mile pace for the remaining 50 minutes, you will run 5.9 miles for the hour.
Jeff Enders says
R. Stubbs – it’s really a function of how the underlying calculations work.
Let me rip away the rounding factor and then I think you’ll see what is occurring.
a month ago, the underlying measurement at 0% inflation was $107,577, which rounds to $108,000 and then is doubled to achieve $216,000. This month that same underlying measurement was $107,606 which once rounded and doubled is the same $216,000.
a month ago, the underlying measurement at 3% inflation was $108,593, which rounds to $109,000 and then is doubled to achieve $218,000. This month that same underlying measurement was $108,418 which once rounded and doubled is the now $216,000.
Assuming inflation remains between 0% and 3% for the rest of the measurement year, $216,000 will be the tranche cutoff. The measurement based on 0% will continue to rise while the measurement based on 3% will continue to fall, and they will converge at the end of the measurement year (August)
Nancy Memmel says
The 0% and 3% inflation projections are for ongoing inflation from the moment to the end of the measurement period. The inflation for the last months is already baked in. Since inflation has dropped in the last few prior months , inflation from right now to the end of the measurement period would have to be about 3.4% for the calculation to get back to yielding the 218 K value
R. Stubb says
Thanks for explaining the calculations. I am still marveling at how the algorithm converges
to the zero percent inflation MAGI when the lowest inflation has been is 2.4% in the last year. See graph at:
https://tipswatch.com/2025/01/15/u-s-inflation-rose-0-4-in-december-higher-than-expected/
So the 2027 projection in this article gives for mfj
0% Inflation 216k
3% Inflation 224k
R. Stubb says
My previous comment got cut off.
So the 2027 projection in this article gives for mfj
0% Inflation 216k
3% Inflation 224k
Normally, I would aim for the midpoint (220k) as I dont believe inflation will be less that 1.5 % (before my 9k safety margin). But the 2026 projection gives me pause.
The Wizard says
It’s good to have a basic plan in mind for dealing with IRMAA.
But I don’t actually DO anything until sometime after Halloween each year. By then, I’ve got a pretty good idea what my AGI will be for the year, including any additional QCDs and a modest Roth conversion.
I keep those preliminary numbers on scratch paper and then wait until mid December when my taxable dividend estimates are available and the final monthly inflation number for the year is out. After a final check on my numbers, I then log into my Vanguard account around 3:30 pm and do an in-kind Roth conversion close to my target amount. Great fun…
GeezerGeek says
Wiz,
I agree. Last year is a done deal and most of my adjustments to income (Roth Conversions, QCDs, etc.) won’t happen until the end of the year. So there is no point in monitoring the numbers month by month until the end of the year draws nigh.
However, if the market heads south bigtime, I will look at the numbers and to see how much of a Roth conversion I can do at that time. I did that in October of 2022 and I was able to convert a larger percentage of my IRA at that time than I would have been able to do if I had waited until the end of the year. I converted a conservative amount in October and topped it off with a smaller conversion at the end of the year.
Nancy Memmel says
At a 1.5% inflation rate from right now to the end of the measurement period for setting 2027 brackets (August 2026), the calculation would give a threshold value of 220 K.
Inflation of 2.2% ( or more, up to 3%), over that period would yield a 222 K threshold.
At 3.0% inflation you’d first get to 224 K.
Do you mean you’d typically aim for 220 K – 9K (for safety) = 211 K ?
Paul Kinney says
At the top is the sentence, “The MAGI for IRMAA doesn’t include untaxed Social Security benefits.” Please verify what that means. Is it the portion of my SS payments not subject to tax? Another interpretation is the SS benefit before taxes, meaning all if it.
Jeff Enders says
Paul – if you look at your tax return, it means that the difference between Lines 6a and 6b is NOT added back to MAGI.
Teresa Durden says
Your Federal modified adjusted gross income includes usually 85% of your social security income (if you’re over a certain amount) so IRMAA would also follow this, because they look at adjusted gross income line.
The Wizard says
Correct, AGI plus any tax-exempt interest…
nick r says
There are hundreds of very repetitive questions and follow up comments in the past years about why 0% and 3% lead to the same IRMAA number.
If Harry would feel comfortable displaying the first decimal, every month, for all the brackets, ie 107 .6 rather than 108 (rounded), I feel many of these repetitive comments would go away, since there is almost a 1% difference between 107.6 and 108.4, but rounded, both lead to 108.
I tend to believe one decimal reporting would not overly complicate Harry’s life in providing reliable, consistent, and excellent work for all his many followers . And much easier for us to judge whether on the low or high side of 108, to better predict our own IRMAA situation.
Jeff Enders says
Nick R – I guess I don’t understand the benefit of your proposal. Regardless of the number of decimal places presented, the two numbers reflecting 0% projected inflation and 3% projected inflation are going to MERGE by August in any event.
Given the small inflation rate assumption (3%) and the rounding rules for IRMAA, some of these datapoints are going to merge well before 12 months have occurred. That true for $108,000 for 2026 IRMAA.
Lastly, as 2024 is in the rear view mirror, there is not much most any taxpayer can do to reduce their 2024 MAGI at this point to get back under $108,000 for 2026 IRMAA charges.
Adding any number of decimal points would add confusion in my view as it does not reflect how IRMAA is really calculated. Harry’s forecast is consistent with how IRMAA is calculated.
Kali says
Is a deferred comp payment treated as MAGI for calculating IRMA or can it qualify as reason for appeal?
Nancy Memmel says
There are a limited number of reasons for appeal due to things that have caused you income to DROP after the year of the income used to make the IRMAA assessment you are appealing.
Having gotten a deferred comp payment but not getting it anymore isn’t one of them, much like having sold a house , but not continuing to sell one every year or having a large one time capital gain are not a basis for an appeal.
Robert Hoppe says
Kali. Yes, a deferred compensation payment is considered part of your Modified Adjusted Gross Income (MAGI) and would be used to calculate your IRMAA (Income-Related Monthly Adjustment Amount), meaning it could potentially increase your Medicare premiums (2 years henceforth) if your total MAGI exceeds the threshold for the surcharge. MAGI calculation includes total gross income, along with other additions like tax-exempt interest from municipal bonds, etc. The sum then determines if an IRMAA surcharge will be applied.
The Wizard says
Just be glad you are a high income retiree.
I certainly am…
Robert Hoppe says
Please advise how you arrived at $224,000 (3% inflation) for MFJ MAGI for 2025 (to impact 2027 Medicare Part B & D premiums), given that the website shows $216,000 for both 0% inflation and 3% inflation for 2024 MAGI (to impact 2026 Medicare Part B & D premiums). How can there be an increase of $8K (3.7%) between $216K and $224K 2025 MAGI?
Harry Sit says
$108,499 rounds down to $108,000 and doubles to $216,000. $111,501 rounds up to $112,000 and doubles to $224,000. It’s only a 2.77% increase between $108,499 and $111,501.