When you’re approaching or already on the journey of Medicare, one acronym many people dread is IRMAA — short for Income-Related Monthly Adjustment Amount.

Think of IRMAA as a high-income surcharge on your Medicare Part B and Part D premiums. If your modified adjusted gross income (MAGI) from two years ago was above certain thresholds, you’ll pay more for these parts than someone whose income was below.

The good news: you’re not alone. The better news is that with awareness and planning, you can manage how it affects you.

Let’s walk through what IRMAA is, how it works in 2025, and what steps you can take to stay ahead of it.

What is IRMAA, in plain English

IRMAA is not a separate tax; it’s an additional amount added to your regular Medicare Part B and Part D premiums if your income in the “look-back year” exceeds certain thresholds.

Here are a few key points up front:

• For most people, the standard Part B premium in 2025 is $185/month.
• If your MAGI exceeds the base threshold (see table below), you’ll pay more—sometimes significantly more.
• The IRS and Social Security Administration (SSA) use your MAGI from two years before to determine your IRMAA. (So your 2023 return determines your 2025 IRMAA).
• About 8% of Medicare Part B beneficiaries are subject to IRMAA.

Next, let’s look at how the 2025 IRMAA thresholds and surcharges are determined.

How IRMAA is Calculated: 2025 Medicare Premium Thresholds

Your 2025 IRMAA bracket is based on your 2023 MAGI. The higher your income, the higher your monthly Part B and Part D premiums.

*Note: Part D surcharges are added to your plan’s premium.
**Married Filing Separately thresholds differ.

Bottom line: If your MAGI is within the base tier, you’ll pay $185 for Part B plus your Part D premium. Higher income tiers can see monthly premiums two to three times that amount.

How IRMAA Affects Medicare Advantage (Part C) Plans

Even if you’re enrolled in a Medicare Advantage (Part C) plan, IRMAA can still influence your total monthly costs. That’s because IRMAA applies only to Part B and Part D premiums, not directly to your Advantage plan’s premium.

However, since all Medicare Advantage members must continue paying their Part B premium (and any Part D surcharge if prescription coverage is included), your overall out-of-pocket cost will include both your plan’s premium and any applicable IRMAA amount billed by Medicare.

Why the Numbers Matter

Because the thresholds are indexed to inflation annually, they creep upward, but only slightly over time. For example, the base threshold increased from $103,000 (2024) to $106,000 (2025) for single filers. That means a slight change in income could push you into a higher bracket and raise your premiums dramatically. Because the income is from two years ago, the impact is delayed, making proactive planning essential.

That’s why understanding these income thresholds – and how life events can change your situation – is essential.

How to Appeal IRMAA or Request a Recalculation

If your income has dropped because of a major life change, such as retirement, divorce, death of a spouse, or job loss, you can ask the SSA to recalculate your IRMAA.

1. You’ll receive a notice from SSA stating you owe IRMAA for a given year (e.g., 2025).
2. If your 2023 income put you in a higher bracket but your 2024 income dropped, submit Form SSA-44 (Medicare Income-Related Monthly Adjustment Amount — Life-Changing Event).
3. If approved, your IRMAA adjustment takes effect for that year or the next, depending on timing. It does not guarantee a refund of past surcharges.
4. To dispute incorrect IRS data or filing status, use Form SSA-561-U2 (Request for Reconsideration).

Tip: Keep documentation (e.g., tax returns, income notices, divorce/separation records, etc.) to support your request.

Strategies to Reduce or Avoid IRMAA

Planning ahead can make a big difference. Here are a few ways to consider managing your income proactively:

• Watch Your MAGI: Because IRMAA uses income from two years prior, watch for spikes from large capital gains or retirement distributions.
• Spread Income: Instead of taking a large lump sum in one year, spread withdrawals over multiple years.
• Be Cautious with Roth Conversions: Converting too much at once can push you into a higher bracket. Gradual conversions may be wiser.
• Consider Charitable Giving and QCDs: If eligible, Qualified Charitable Distributions (QCDs) from IRAs reduce taxable income and may help you avoid IRMAA.
• Take Qualified Roth IRA Distributions: Qualified withdrawals from a Roth IRA are not considered taxable income and are not included in your MAGI.
• Use Qualified Health Savings Account Distributions: When you use funds from an HSA to pay for qualified medical expenses, including Medicare premiums, those withdrawals are tax-free and do not increase your MAGI. You cannot contribute to an HSA once you are enrolled in Medicare, but you can continue to withdraw existing funds tax-free.
• Stay Aware of Deadlines and Thresholds: Because brackets update annually and use a two-year look-back, timing matters.

Everyone’s financial situation is unique, and these strategies can be more or less effective depending on your broader goals, tax picture, and retirement income sources. Before making changes, speak with a trusted financial planner or tax professional who can help you determine which approach is right for you.

Why IRMAA Feels Unfair – and What You Can Do About It

Many retirees are surprised to learn that IRMAA is based on income from two years ago—often reflecting a time when they were still working. This lag, combined with sharp “income cliffs,” can make premium increases feel arbitrary or unfair.

Common frustrations include:

• Sudden jumps: Earning just slightly over a threshold can raise premiums by hundreds of dollars a month.
• Lag time: Income used for calculations may no longer reflect your current financial reality.
• Limited control: It can take a year for lower income to show up and reduce your IRMAA.
• Complexity: Many people don’t learn about IRMAA until they get a notice from SSA.

While the surcharge is intended to make Medicare more progressive, the cliffs and look-back rule create understandable frustration. Knowing how it works lets you plan ahead and make IRMAA a manageable—not mystifying—part of your retirement strategy.

What’s New for Medicare IRMAA in 2025

Here’s a summary of some of the key updates affecting how IRMAA is applied:

• Standard Part B premium = $185/month in 2025 (up from $174.70 in 2024).
• Annual Part B deductible = $257 in 2025 (up from $240 in 2024).
• Base threshold = $106,000 (single) and $212,000 (joint).
• Part D surcharge = $13.70 – $85.80, depending on income tier.
• 2026 projections suggest further premium increases – another reason to plan now.

A Useful Checklist

Use this checklist to see where you stand and what to do next.

☑ Check your 2023 MAGI and compare it to the 2025 thresholds.
☑ Estimate your 2025 Part B and Part D premiums.
☑ If your income has dropped, file Form SSA-44 and/or SSA-561-U2.
☑ Review upcoming distributions or gains to see if you can spread them out.
☑ Talk with a financial planner or accountant about tax-efficient strategies.
☑ Mark your calendar for Medicare Open Enrollment and revisit your plan each year.

Final Thoughts

IRMAA can be an unwelcome surprise, but it doesn’t have to derail your retirement plan. With awareness, proactive planning, and the right strategies, you can manage its impact and keep your Medicare costs in perspective.

Everyone’s financial situation is unique, and these strategies may be more—or less—effective depending on your broader goals, tax picture, and sources of income. Before making any changes, speak with a trusted financial planner or tax professional who can help determine which approaches best fit your overall financial plan.

Sources:
NerdWallet, “IRMAA Brackets 2025: What They Are and How They Work”
Humana, “Income Related Monthly Adjustment Amount (IRMAA) for 2025 Medicare Part B and Part D Premiums
CMS.gov, “2025 Medicare Parts A & B Premiums and Deductibles Fact Sheet”
Medicareresources.org, “What is the Income-Related Monthly Adjusted Amount (IRMAA)?
Medicareguide.com, “2025 Medicare Plan Costs You Need to Know”
The Finance Buff