What Is IRMAA?

You can appeal an IRMAA surcharge when your income has decreased due to a qualifying life-changing event, retirement, death of a spouse, divorce, reduction in work hours, or loss of income-producing property. Complete SSA Form SSA-44 and submit it to your local Social Security office with documentation supporting the life change and your current income level.

Social Security will use more recent income data (typically the most recently filed tax return or a reasonable estimate if you just retired) rather than the 2-year lookback to recalculate your IRMAA. This can eliminate or significantly reduce the surcharge, particularly for retirees who had high income in their final working year but now have substantially lower retirement income.

IRMAA is based on Modified Adjusted Gross Income (MAGI) from 2 years prior. MAGI includes wages, self-employment income, traditional IRA and 401(k) withdrawals, RMDs, pension income, dividends, capital gains, taxable interest, rental income, and business income. It also includes tax-exempt municipal bond interest (added back to AGI). Roth IRA withdrawals are NOT included in MAGI.

The most common unexpected IRMAA triggers are: large Roth conversions in the 2-year lookback year, selling a business or real estate generating a large capital gain, RMDs beginning at age 73 that push income above the threshold, and high investment income years from mutual fund distributions. Planning around these events 2+ years in advance is essential for managing Medicare costs.

The 2025 standard Part B premium is $185/month. IRMAA surcharges by income tier: $106,001–$133,000 individual adds $74/month ($259 total). $133,001–$167,000 adds $187/month ($372 total). $167,001–$200,000 adds $297/month ($482 total). $200,001–$500,000 adds $408/month ($593 total). Above $500,000 adds $441/month ($626 total).

Part D also has IRMAA surcharges ranging from about $13 to $85/month additional depending on the tier. For a married couple where both spouses are on Medicare, these surcharges double, a couple at the $200,001–$400,000 tier each pays $408/month extra, totaling $816/month ($9,792/year) in additional Part B premiums alone, compared to the $370/month they would pay without IRMAA. The financial impact of IRMAA is often larger than retirees expect.

Roth conversions help with IRMAA in two distinct ways. First, reducing traditional IRA balances reduces future RMDs. Smaller RMDs means lower MAGI in retirement years, potentially keeping you below IRMAA thresholds or in lower IRMAA tiers. Second, when you draw retirement income from Roth accounts instead of traditional accounts, Roth withdrawals do not add to MAGI at all, zero impact on IRMAA calculations.

For Nevada residents, Roth conversions are executed at zero state tax cost, only federal income tax applies. This makes the total cost of conversion lower, and the break-even point (where future tax and IRMAA savings exceed the conversion cost) arrives sooner. A Nevada retiree who converts $50,000/year from traditional IRA to Roth IRA over 8 years before RMDs begin can potentially eliminate IRMAA entirely in retirement, saving thousands of dollars per year in Medicare surcharges while also reducing ordinary income taxes on RMDs and Social Security taxation.