Many federal retirees are surprised to learn that Medicare premiums are not the same for everyone. Once your income exceeds certain thresholds, Medicare imposes an additional surcharge known as the Income-Related Monthly Adjustment Amount (IRMAA). For higher-income retirees, these surcharges can add thousands of dollars per year to healthcare costs.
If you're approaching Medicare eligibility or already enrolled, understanding the 2026 IRMAA brackets can help you make more informed tax and retirement income decisions.
What Is IRMAA?
IRMAA stands for Income-Related Monthly Adjustment Amount. It is an additional premium charged on top of standard Medicare Part B and Part D premiums for retirees whose income exceeds certain levels.
Unlike many retirement-related taxes and surcharges, IRMAA is based on a two-year lookback period. That means your 2026 Medicare premiums are determined using your 2024 Modified Adjusted Gross Income (MAGI). MAGI generally includes adjusted gross income plus tax-exempt interest and certain other income sources.
For federal retirees, this can create unexpected surprises. A large Roth conversion, substantial TSP withdrawal, realized capital gains, or other one-time income event in 2024 could result in higher Medicare premiums in 2026.
2026 Medicare IRMAA Brackets
The standard Medicare Part B premium for 2026 is $202.90 per month. Once income exceeds the IRMAA thresholds, both Part B and Part D premiums increase.
| Single Filer (2024 MAGI) | Married Filing Jointly (2024 MAGI) | Part B Premium (monthly) | Part D Surcharge (monthly) |
| $109,000 or less | $218,000 or less | $202.90 | None |
| $109,001 - $137,000 | $218,001 - $274,000 | $284.10 | + $14.50 |
| $137,001 - $171,000 | $274,001 - $342,000 | $405.80 | + $37.50 |
| $171,000 - $205,000 | $342,001 - $410,000 | $527.50 | + $60.40 |
| $205,001 - $500,000 | $410,001 - $750,000 | $649.20 | + $83.30 |
| Above $500,000 | Above $750,000 | $689.90 | + $91.00 |
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Why IRMAA Matters for Federal Retirees
Federal retirees receive income from multiple sources, including a FERS or CSRS pension, Social Security benefits, distributions from the TSP or other retirement accounts, taxable brokerage accounts, and occasionally part-time employment. While each income source may seem manageable on its own, together they can push retirees into a higher IRMAA bracket…without you even realizing it until two years later.
The challenge is that IRMAA functions as a "cliff." Exceeding an income threshold by even a dollar can trigger significantly higher Medicare premiums for an entire year. As a result, retirement income planning becomes just as important as investment planning.
Common Triggers That Can Increase IRMAA
Several events can unexpectedly push retirees into a higher IRMAA bracket:
- Large Traditional TSP withdrawals
- Roth conversions
- Realizing significant capital gains
- Selling a business or investment property
- Required Minimum Distributions (RMDs)
- Pension lump-sum payouts
- Taxable interest and dividend income
For federal retirees, Roth conversions deserve special attention. While a Roth conversion may temporarily increase IRMAA, it can also reduce future RMDs and potentially lower Medicare premiums later in retirement. The key is determining whether the long-term tax benefits outweigh the short-term IRMAA cost.
Can You Appeal IRMAA?
In certain situations, yes. If your income has declined because of a qualifying life-changing event, such as retirement, death of a spouse, divorce, or loss of income-producing property, you may be able to request a reduction in your IRMAA assessment by filing Form SSA-44 with the Social Security Administration.
This can be especially valuable for newly retired federal employees whose current income is substantially lower than the income reflected on the tax return Medicare used to calculate IRMAA.
Strategies to Reduce Future IRMAA Exposure
Although you cannot change your 2024 income after the fact, you can take steps to manage future Medicare costs. Tax-efficient withdrawal strategies, strategic Roth conversions, qualified charitable distributions, and careful management of capital gains can all help control MAGI over time. Many retirees find that the years between retirement and age 73, before Required Minimum Distributions begin, offer valuable opportunities for proactive tax planning.
IRMAA is one of the most overlooked expenses in retirement, yet it can have a meaningful impact on your annual healthcare costs. Because Medicare uses a two-year lookback period, today's tax decisions can affect your Medicare premiums years down the road. For federal employees and retirees, coordinating pension income, Social Security, TSP withdrawals, and Roth conversion strategies can help minimize surprises and potentially keep you in a lower IRMAA bracket throughout retirement.
The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Serving Those Who Serve writers and not necessarily those of RJFS or Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy suggested. Every investor’s situation is unique and you should consider your investment goals, risk tolerance, and time horizon before making any investment or financial decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. **
