Key Takeaways:
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IRMAA (Income-Related Monthly Adjustment Amount) is an additional charge for Medicare Part B and Part D premiums based on your income—and understanding its calculation can help you plan effectively.
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Many myths surrounding IRMAA can lead to confusion and unexpected costs, but breaking down the facts can ease the process of managing your Medicare expenses.
Don’t Let These IRMAA Myths Mislead You
If you’ve ever been surprised by higher Medicare premiums, IRMAA might be to blame. This extra charge is tied to your income and can add up quickly if you’re not prepared. Unfortunately, there’s a lot of misinformation about how IRMAA works. Let’s set the record straight by debunking six common misconceptions and helping you understand how to navigate your Medicare premiums with confidence.
What Exactly Is IRMAA?
Before diving into the myths, let’s get the basics down. IRMAA is a surcharge added to Medicare Part B and Part D premiums if your income exceeds certain thresholds. In 2025, these thresholds start at $106,000 for individuals and $212,000 for couples filing jointly. The Social Security Administration (SSA) determines your IRMAA based on your modified adjusted gross income (MAGI) from two years prior. So, for 2025, your 2023 tax return is used.
Myth 1: Only the Wealthy Pay IRMAA
One of the most persistent misconceptions is that IRMAA only affects the ultra-wealthy. While it’s true that IRMAA primarily targets higher-income individuals, you don’t have to be a millionaire to be subject to it. With thresholds starting at $106,000 for single filers, many middle-income retirees can find themselves paying IRMAA, especially if they’ve had a one-time income boost, such as from selling a home or withdrawing from retirement accounts.
Myth 2: IRMAA Is a Permanent Charge
IRMAA is not set in stone. It’s recalculated annually based on your income from two years prior. If your income decreases, your IRMAA might be reduced or even eliminated in the future. For example, if you’re paying IRMAA in 2025 based on your 2023 income but your 2024 income is lower, your 2026 premiums may drop.
What You Can Do:
If your income has dropped significantly due to a life-changing event like retirement, divorce, or the death of a spouse, you can request a redetermination from the SSA. This process involves filing Form SSA-44 and providing proof of your income change.
Myth 3: IRMAA Only Affects Medicare Part B
Many people mistakenly believe that IRMAA only applies to Medicare Part B premiums. In reality, IRMAA also affects Part D (prescription drug) premiums. Both surcharges are calculated separately but use the same income thresholds. If you’re subject to IRMAA for Part B, you’ll likely see an additional charge on your Part D premiums as well.
Key Reminder:
IRMAA for Part D is added to the premium of any Medicare Part D plan you choose. This means your total Part D cost will include the IRMAA surcharge plus the plan’s base premium.
Myth 4: You’re Stuck With IRMAA Once Assigned
Many Medicare beneficiaries assume they have no recourse once IRMAA is applied, but that’s not true. You can appeal your IRMAA determination if you believe it’s incorrect or if your income has changed due to specific circumstances.
Steps to Appeal IRMAA:
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Review your SSA determination letter to verify the income figures they used.
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If you find errors or have had a qualifying life event, complete Form SSA-44 and submit it to your local Social Security office.
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Provide documentation, such as tax returns or proof of reduced income, to support your case.
Keep in mind that the appeal process can take time, but it’s worth pursuing if you believe your IRMAA is incorrect.
Myth 5: IRMAA Thresholds Are Fixed
Another common myth is that IRMAA income thresholds never change. In reality, these thresholds are adjusted annually to account for inflation. For example, in 2024, the individual threshold was $105,000, but in 2025, it’s increased to $106,000. While these adjustments are often small, they can impact whether you’re subject to IRMAA.
Planning Tip:
Keep an eye on annual updates to IRMAA thresholds so you can plan your finances accordingly. Understanding where the cutoff lies can help you make decisions about withdrawals or other income sources to potentially stay below the threshold.
Myth 6: IRMAA Isn’t Worth Worrying About
Some people brush off IRMAA as a minor issue, but the additional costs can add up. For Medicare Part B alone, IRMAA surcharges in 2025 range from $69.90 to $419.30 per month. When combined with Part D surcharges, your total out-of-pocket expenses could increase significantly.
Why It Matters:
IRMAA can eat into your retirement budget, especially if you’re living on a fixed income. By understanding how it works and planning ahead, you can avoid surprises and keep more of your money for other expenses.
How to Manage IRMAA and Protect Your Budget
Now that we’ve cleared up the myths, let’s look at some practical steps you can take to manage IRMAA and minimize its impact on your Medicare premiums.
Monitor Your Income
Since IRMAA is based on your income from two years prior, it’s crucial to keep tabs on your MAGI. This includes wages, Social Security benefits, rental income, dividends, and more.
Proactive Steps:
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Avoid large withdrawals from retirement accounts in a single year.
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Work with a financial advisor to strategize your income distribution.
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Consider tax-efficient investments to reduce taxable income.
Appeal When Necessary
If you’ve experienced a qualifying life-changing event, don’t hesitate to file an appeal. The SSA provides clear guidelines for what qualifies, so familiarize yourself with the criteria and gather the necessary documentation.
Utilize Tax Planning
Tax planning can be a powerful tool for managing IRMAA. For example, spreading withdrawals from retirement accounts over multiple years or using Roth conversions can help lower your MAGI and keep you below IRMAA thresholds.
Work With a Professional:
A tax advisor or financial planner can help you develop a strategy to manage your income and minimize IRMAA’s impact on your budget.
Stay Informed
IRMAA rules and thresholds change over time, so staying informed is essential. Check for annual updates to income limits and familiarize yourself with the SSA’s processes for determining and appealing IRMAA.
Understanding IRMAA Helps You Stay Ahead
IRMAA can feel like a confusing and frustrating aspect of Medicare, but understanding the facts and debunking the myths can make all the difference. By staying informed, monitoring your income, and taking advantage of available tools and resources, you can manage IRMAA effectively and avoid unnecessary stress.
