How to Avoid IRMAA: 7 Moves to Stay Under the Cliff

Margaret is 64, single, and lives in Phoenix, Arizona. She has $1.1M split across a $720,000 traditional IRA, a $230,000 brokerage account, and a $150,000 Roth she built in her late 50s. She will start Medicare at 65 in 2027, so her 2027 premium will be set by her 2025 MAGI. Her plan was to pull $95,000 from the traditional IRA in 2025 to cover spending and a kitchen remodel. Add roughly $14,000 of Social Security and brokerage dividends, and her 2025 MAGI lands near $108,000 — $5,000 over the first single cliff. That single dollar of overage would cost her about $1,052 in extra 2027 Medicare premiums. By pulling $45,000 from her Roth instead of the IRA, she keeps MAGI at $63,000, stays in the base tier, and pays the $185 Part B premium. The remodel got paid for either way. The only thing that changed was which account the money came from.

The mechanic everyone gets wrong: the two-year lookback

IRMAA — the Income-Related Monthly Adjustment Amount — is a surcharge added to your Medicare Part B and Part D premiums when your income is above a threshold. The single most misunderstood feature is the timing. Under 42 U.S.C. §1395r(i), the Social Security Administration sets your premium using your MAGI from two years prior. So:

• Your 2026 premium is based on your 2024 tax return.
• Your 2027 premium is based on your 2025 return.
• A Roth conversion you do at age 60 can affect your premium at age 62 — before you are even on Medicare.

The second trap: IRMAA is a hard cliff, not a phase-in. Go $1 over a threshold and you owe the entire tier’s surcharge. There is no proration. A retiree who lands at $103,001 of MAGI pays the same surcharge as one at $128,999. This is what makes IRMAA planning so high-leverage: shaving a few thousand dollars of MAGI in the right year can save hundreds to thousands of dollars in premiums two years later.

What “MAGI” means for IRMAA specifically

IRMAA MAGI is narrower than the MAGI used for other tax provisions. Per 42 U.S.C. §1395r(i)(4), it equals your adjusted gross income (AGI) plus tax-exempt interest — chiefly municipal bond interest. That is it. But AGI is a wide net. It includes:

• Traditional IRA, 401(k), and 403(b) withdrawals and required minimum distributions (RMDs)
• Roth conversion amounts (the converted amount is taxable income in the conversion year)
• Capital gains, dividends, and interest
• Pension and annuity income
• Up to 85% of Social Security benefits
• Tax-exempt muni interest (added back specifically for IRMAA)

And here is the asymmetry the seven moves exploit — these do not raise IRMAA MAGI:

• Qualified Roth withdrawals (excluded from gross income under IRC §408A)
• Qualified charitable distributions (QCDs) from an IRA (IRC §408(d)(8))
• Qualified HSA distributions for medical expenses (IRC §223(f))
• Return of your own basis (already-taxed contributions)

The 2026 IRMAA tiers and what each cliff costs

Here are the 2026 brackets, based on your 2024 MAGI. The Part B base premium is $185.00/month; the surcharge stacks on top.

The “extra/yr per person” column compares each tier to the base. The first cliff adds about ($259 − $185 + $13.70) × 12 = $1,052/year per person. For a married couple where both spouses are on Medicare, every surcharge is paid twice — so the first joint cliff at $206K costs the household roughly $2,105/year. Part B and Part D premiums are projected 2026 figures; confirm against the CMS announcement when finalized.

The 7 moves to stay under the cliff

1. Do Roth conversions early — before Medicare, ideally before age 63

This is the highest-leverage move because of the two-year lookback. The first IRMAA-relevant premium year is age 65, set by your age-63 income. Conversions you do at ages 55–62 land in tax years that never touch a Medicare premium — you pay income tax on the conversion at your then-current bracket, but the converted dollars then live in a Roth that produces zero future MAGI. Every dollar you move out of a traditional IRA before RMDs begin (age 73 for those born 1951–1959, age 75 for 1960+, per SECURE 2.0 §107) is a dollar that will not inflate your MAGI at 73, 75, 80, and beyond. The goal is to shrink the traditional balance so future RMDs stay below the cliff for the rest of your life.

2. Use QCDs to satisfy RMDs without raising MAGI

Once RMDs start, they are forced income — and forced income is what pushes retirees over IRMAA lines. A qualified charitable distribution (IRC §408(d)(8)) lets you send up to $108,000 for 2026 (indexed) directly from your IRA to a qualified charity. The QCD counts toward your RMD but is excluded from AGI entirely. If your RMD is $30,000 and you give $15,000 to charity anyway, routing that $15,000 as a QCD cuts your IRMAA MAGI by $15,000 — far better than taking the full RMD into income and claiming an itemized deduction, because the deduction does nothing for IRMAA. You must be 70½ or older to use a QCD.

3. Pay medical costs from your HSA — those withdrawals don’t count

Qualified HSA distributions for medical expenses are tax-free and excluded from AGI under IRC §223(f). In retirement, healthcare is a large, recurring spend. Funding it from an HSA instead of a traditional IRA means those dollars never appear in MAGI. If you have $20,000 of medical and dental costs in a year and pay them from the HSA rather than pulling a $20,000 taxable IRA distribution, you have lopped $20,000 off the MAGI that sets your premium two years later.

4. Fund spending with tax-free Roth withdrawals in “at-risk” years

This is exactly what Margaret did. Roth withdrawals are invisible to IRMAA. The strategy is to identify years where a normal taxable withdrawal would push you over a cliff, then cover that marginal spending from the Roth instead. You are not avoiding the tax forever — you paid it at conversion — but you are controlling which year income shows up so it never crosses a threshold. A Roth balance is essentially a MAGI “shock absorber” for one-time expenses: a new roof, a car, a big trip, a medical event.

5. Blend account types so no single source crosses a line

The retirees who get hit by IRMAA usually have everything in one tax-deferred bucket, so every dollar of spending is fully taxable. A blended drawdown — some from taxable (only the gain is income, often at the 0% LTCG rate up to $48,350 single / $96,700 MFJ for 2026), some from tax-deferred up to just under the cliff, and the rest from Roth — lets you fill MAGI up to the line and then switch to tax-free sources. The decision each year is: how much room do I have under the next cliff, and which accounts fill it most cheaply?

6. Bunch capital gains into a non-Medicare year

Capital gains are AGI, so a large realization (selling a rental, rebalancing a concentrated position, harvesting gains at the 0% rate) can blow through an IRMAA tier. If you are not yet within the two-year window — for example, you are 62 and the gain would only affect an age-64 premium — you may have flexibility on timing. Realize big gains before the lookback window opens, or spread them across multiple years so no single year crosses a threshold. Pair this with the LTCG 0% bracket: gains that fall within the 0% rate also tend to keep total MAGI lower.

7. File SSA-44 after a life-changing event

If you already got hit — for instance, a high-income work year set a surcharge for the year after you retired — you can appeal. Form SSA-44 lets you ask SSA to use a more recent (lower) income estimate when you have had a qualifying life-changing event: marriage, divorce, death of a spouse, work stoppage or reduction (retirement), loss of pension, or loss of income-producing property (per SSA POMS HI 01120.005). Retirement is the most common trigger: your 2024 return showed your final big salary year, but you stopped working in 2025, so SSA-44 lets SSA price your 2026 premium on your lower 2025/2026 reality instead.

Worked example: a single retiree sitting on the first cliff

Return to Margaret. Here is the side-by-side of her two 2025 drawdown plans — the year that sets her 2027 premium.

Same lifestyle, same $108,000 of spending power, same Arizona (no IRMAA-relevant state quirk — AZ does not surcharge Medicare). The only difference is the account she drew from, and it saves her about $1,052. Over a 25-year retirement, repeating that discipline in the years she would otherwise tip over is worth tens of thousands — and it compounds with the lower RMDs her earlier Roth conversions already locked in.

What most people miss: the “widow’s penalty” and the cliff stacking

Two things blindside even careful planners.

First, the survivor cliff. When one spouse dies, the survivor files as single the following year — and the single IRMAA thresholds are roughly half the joint thresholds ($103K vs. $206K at the first tier). The household’s income often barely drops because RMDs and pensions continue, but the threshold gets cut in half. A couple comfortably under the $206K joint cliff can have the surviving spouse land two tiers up overnight, purely from the filing-status change. This is the “widow’s penalty,” and it is the strongest argument for doing Roth conversions while both spouses are alive and the joint brackets are wide.

Second, IRMAA stacks with other thresholds. The same MAGI that triggers an IRMAA tier also feeds the 3.8% Net Investment Income Tax (over $200K single / $250K MFJ, IRC §1411) and the taxation of up to 85% of Social Security. One large RMD or capital gain can light up three penalties at once. When you model a withdrawal, do not look at IRMAA in isolation — look at where you sit relative to all three lines.

The decision lever

IRMAA is not really an income problem — it is a timing and account-location problem. The dollars you spend in retirement are largely fixed by your lifestyle; what you control is which bucket they come from and which year the taxable income shows up. The single highest-value action is to look two years ahead, every year, and ask one question: am I within striking distance of a cliff? If yes, the lever is to swap the marginal taxable withdrawal for a Roth or HSA dollar, route any charitable giving through a QCD, and — in the decade before Medicare — convert aggressively while conversions still land in years that never touch a premium. Build the Roth bucket before 63, and you buy yourself a MAGI shock absorber for the rest of your life.