IRMAA Cliffs
Higher income = higher Medicare premium.
What IRMAA is
Income-Related Monthly Adjustment Amount. Higher-income seniors pay more for Medicare Part B + Part D. Based on 2-years-prior tax return.
2025 IRMAA tiers (single)
- Under $106K — base premium ($185/mo for Part B).
- $106K-$133K — base + $74 = $259/mo.
- $133K-$167K — base + $185 = $370/mo.
- $167K-$200K — base + $295 = $480/mo.
- $200K-$500K — base + $406 = $591/mo.
- Over $500K — base + $443 = $628/mo.
- For couples: roughly DOUBLE these income brackets.
- Plus separate IRMAA for Part D.
"Cliff" effect
Going $1 over a tier = pay full tier increase. Not gradual. So $105,999 vs $106,001 = $74/mo difference. ALL year.
Reduce IRMAA
- Roth conversions — strategic before age 63 (year before Medicare).
- QCD (Qualified Charitable Distribution) — give from IRA to charity, doesn't count as income.
- HSA withdrawals — for medical, tax-free, no IRMAA effect.
- Manage capital gains timing — spread across years.
- Avoid one-time income spike — large Roth conversion or sale of home + appreciated investments.
- Tax-loss harvesting — offset gains.
- Move income to spouse's lower tier.
Appeal IRMAA
- Form SSA-44 — appeal if life event reduced income.
- Qualifying events: death of spouse, divorce, work stoppage, retirement, loss of pension, etc.
- SSA reviews + may reduce premium.
- Within 60 days of IRMAA notice.
2-year lookback
2025 IRMAA based on 2023 tax return. So plan IRMAA timing 2 years ahead. Big income year now = bigger Medicare premium 2 years later. Fee-only fiduciary worth $ to plan.