Key Takeaways:
IRMAA is a Medicare Part B and Part D surcharge based on your MAGI from two years ago, so a one-time income spike can unexpectedly raise your 2025 premiums.
You may be able to appeal the surcharge—often using SSA-44—if SSA used incorrect income data or if you had a qualifying life-changing event that reduced your income.
Smart planning can help avoid future IRMAA hits, like spreading Roth conversions over multiple years, using QCDs when eligible, and managing large IRA withdrawals and capital gains.
Did your Medicare premium suddenly skyrocket? If you think you are paying more than you should, you may have recourse. But you need to act quickly.
The IRMAA surcharge catches many retirees by surprise, and some end up paying more than their fair share.
IRMAA, which stands for Income-Related Monthly Adjustment Amount, is an extra monthly charge added to your Medicare Part B and Part D premiums if, essentially, you make too much money in retirement. The Social Security Administration determines your IRMAA based on the Modified Adjusted Gross Income reported on your tax return two years prior. So 2025 premiums are based on your 2023 returns.
Medicare Part B covers doctor’s visits and outpatient services, and currently costs $185.00 monthly. Part D covers prescription drugs, the premium for which varies based on the plan you choose, but averages around $46.50 per month.
In 2025, individuals who made more than $106,000 in 2023 and married couples filing jointly who earned more than $212,000, will owe IRMAA.
The surcharges can be quite steep. An individual who earned between $106,000 and $133,000 or a couple who earned between $212,000 and $266,000, will owe an additional $74 per month for Part B and $13.70 for Part D, and that’s the lowest bracket.
The surcharges increase incrementally up to $443.90 for a Part B and $85.80 for Part D for individuals who earn more than $500,000 and couples who earn more than $750,000. Again, these are monthly surcharges in addition to the regular Medicare premiums.
However, you might be able to appeal if one of these scenarios applies to you:
- The income SSA used is incorrect. For example, the IRS provided outdated or incorrect tax return information.
- You had a significant income drop in the previous two years due to a qualifying life-changing event.
- Your tax filing status has changed, affecting how SSA should assess your income.
- You experienced a one-time spike in income, such as a home sale or Roth IRA conversion, which is not representative of your ongoing income level.
The Life-Changing Events That May Qualify for an IRMAA Appeal
- Marriage - You recently married, and your combined income is now lower than the threshold for married couples filing jointly.
- Divorce/Annulment – You divorced or had your marriage annulled, lowering your household income.
- Death of a spouse – the loss of your spouse resulted in a lower household income
- Work Stoppage – You retired or lost your job, significantly reducing your earnings.
- Work Reduction – You reduced your work hours, causing a substantial income drop.
- Loss of income-producing property – You lost rental property income due to a disaster, market downturn, or other factors
- Loss of Pension Income – Your pension income has been reduced or eliminated
- Employer Settlement Payment Loss – You no longer receive a settlement payment that previously increased your income.
So, what can you do if you fall into one of these categories? The first thing you want to do is to gather the documentation required to prove you do not owe the surcharge. These include:
Proof of Income Change
- Most recent tax return
- W-2s, pay stubs or 1099s showing reduced income
- A letter from your employer confirming your retirement or job loss
- Pension reduction notice
- Rental income statements or investment account records, if the loss is due to investment or rental properties.
Proof of Life-Changing Event
- Marriage certificate
- Divorce decree
- Death certificate if a spouse passed away
- Official termination letter from your employer
- Legal documents related to a property loss or pension termination.
The next step is to fill out form SSA-44, if your appeal is due to a life-changing event. You can download this form from the Social Security Administration’s website: www.ssa.gov. You will need the following information to fill out the form:
- Personal information, including your name, social security number, and Medicare number
- The type of life-changing event that occurred
- Your new estimated income for the current year and next year
- Supporting documentation to prove the change.
Finally, you will submit your appeal either in person or by mail. You can locate your local Social Security office on the ssa.gov website. Please note that your visit may require an appointment, so call ahead. You can also find the mailing address for your local office on the website if you choose to mail your appeal.
To follow up by telephone and inquire about the status of your appeal, the phone number is (800) 772-1213.
Once you submit your appeal, you can expect the review to take 60 to 90 days, but I have heard of appeals taking as long as 9 months.
If your appeal is approved, the Social Security Administration will adjust your Medicare premium, and you will receive a refund if you overpaid. If your appeal is denied, you can request reconsideration by submitting form SSA-561. This allows you to request a second review. If your appeal is denied a second time, you can escalate it to an Administrative Law Judge.
You can also track your appeal online using your Social Security account: www.ssa.gov/myaccount. Keep copies of all documents for future reference, and if you do not hear back within 90 days, contact SSA for a status update.
While there may be recourse if IRMAA is incorrectly assessed, it is even better to avoid triggering the surcharge in the first place, when possible. Of course, some life-changing events cannot be avoided, but you do have control over your finances to a great extent. With careful financial planning, you may be able to avoid falling into one of the IRMAA brackets:
- When performing a Roth conversion, you should factor in the potential for a one-year hike in Medicare premiums, along with the tax bill. To reduce the chance of the IRMAA surcharge, you may want to spread out a conversion over several years.
- If you’re still working, you can contribute to your 401(k) or other tax-deferred accounts, which will reduce your modified gross income used to calculate the surcharge.
- If possible, avoid taking large, one-time withdrawals from your traditional IRAs or other tax-deferred accounts.
- You can also use qualified charitable distributions to lower your MAGI. If you’re 70-1/2 or older, you can donate up to $100,000 a year from your IRAs to charitable organizations.
- If you expect large capital gains in your non-qualified accounts, tax loss harvesting can help you offset those gains to prevent a large spike in income.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Albany Financial Group and LPL Financial do not provide tax advice or services. Please consult your tax advisor regarding your specific situation.
A Roth IRA conversion—sometimes called a backdoor Roth strategy—is a way to contribute to a Roth IRA when income exceeds standard limits. The converted amount is treated as taxable income and may affect your tax bracket. Federal, state, and local taxes may apply. If you’re required to take a minimum distribution in the year of conversion, it must be completed before converting.
To qualify for tax-free withdrawals, you must generally be age 59½ and hold the converted funds in the Roth IRA for at least five years. Each conversion has its own five-year period, and early withdrawals may be subject to a 10% penalty unless an exception applies. Income limits still apply for future direct Roth IRA contributions.
This material is for informational purposes only and does not constitute tax, legal, or investment advice. Please consult a qualified tax professional regarding your individual circumstances.
John Gigliello, CFP®
John Gigliello, CFP®, is a fee-based fiduciary financial planner in Albany, NY, serving individuals age 50+ with comprehensive planning and investment management, centered around proactive and advanced tax planning. John earned a Certificate in Financial Planning from Boston University and, more recently, successfully completed the rigorous CFP® Certification examination to become a CERTIFIED FINANCIAL PLANNER™. John earned the Accredited Investment Fiduciary® Designation from the Center for Fiduciary Studies®, the standards-setting body for Fi360. The AIF® designation signifies specialized knowledge of fiduciary responsibility and the ability to implement policies and procedures that meet a defined standard of care. John currently serves on the Albany County Investment Advisory Board, having been appointed by a unanimous vote of the County Legislature in January 2019. In this position, John advises the county on a strategy for making the best use of money available for investment.