If you opened a letter from Social Security and thought, “Wait… why did my Medicare premiums jump?” you’re in good company.
Often the reason is IRMAA (the Income-Related Monthly Adjustment Amount). It’s Medicare’s way of saying: if your income was high enough, you’ll pay an extra surcharge on top of the standard Part B and Part D premiums.
The frustrating twist: the income Medicare looks at is usually from your tax return from two years ago. So, an unusually high-income year can raise your premiums later – even if your income has since dropped back down.
Why this happens (and why it’s common)
Most people don’t have “high income forever.” They have “high income that one year.” IRMAA commonly shows up after a one-time event that temporarily boosts taxable income, such as:
- Selling a business
- Retiring (especially with a large payout, severance, or cashed-out benefits)
- Large capital gains (selling investments or property)
- A big IRA distribution in a single year
- Roth conversions (a helpful tool that can also trigger IRMAA if the timing/amount isn’t managed)
So how can you lower your Medicare Part B and Part D premiums?
Start simple: read the notice, confirm what year of income they used, and don’t assume the amount is “non‑negotiable.” In many cases Social Security is applying the rules correctly based on that two-year-old tax return – but you may have a legitimate way to request a reduction if your income has dropped.
Step 1: Confirm what Medicare is using (and what counts as “income”)
IRMAA is based on your MAGI (modified adjusted gross income) from your federal tax return – typically from two years prior. That means items like IRA distributions, capital gains, and Roth conversions can matter just as much as your paycheck.
Step 2: Check whether a “life-changing event” applies (this is where relief often exists)
Social Security can reduce (or remove) an IRMAA surcharge if your income is lower due to certain qualifying life events. In plain English: if your tax return from two years ago no longer reflects your current reality, you may be able to ask for a re-determination.
Examples of qualifying events often include things like retirement or work stoppage, a reduction in work hours, loss of income-producing property, divorce/annulment, or the death of a spouse. (The rules are specific, so it’s worth matching your situation to the official categories.)
Step 3: Gather the right documentation before you call or file
Before you spend time on hold, take 10 minutes to get organized. In most cases you’ll want: (1) your IRMAA determination notice, (2) the tax return Social Security used (usually two years back), (3) proof of the life-changing event (for example, a retirement letter or employer statement), and (4) a reasonable estimate of your current-year income (MAGI). The stronger your paper trail, the smoother the process tends to go.
Step 4: Request an IRMAA re-determination (often using SSA-44)
If you have a qualifying life-changing event, you’re not “appealing Medicare.” You’re asking Social Security to use a more accurate income picture. This is commonly done with Form SSA-44 (Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event). You’ll indicate the event, provide documentation, and give an estimate of your modified adjusted gross income for the year you want them to consider.
Step 5: Plan ahead so IRMAA doesn’t surprise you next time
Even if your current premium increase is “baked in,” IRMAA is also a planning issue. The goal is to avoid stacking too much taxable income into one year without realizing the Medicare ripple effects two years later. Common pressure points include large one-time IRA distributions, big capital gains, and Roth conversions. Often, spreading income across tax years, coordinating distributions with your tax bracket, and being intentional about the timing/size of conversions can reduce the chance of future surcharges.
A quick way to think about it: IRMAA is like getting a bill today based on what you earned two years ago. If two-years-ago-you sold a business (high income) but today-you is fully retired (lower income), it may be worth asking Social Security to re-run the numbers with your current situation.
Quick IRMAA checklist
- Find the income year Social Security used (typically two years back).
- Identify whether you have had a qualifying life-changing event since that year.
- Collect your notice, tax return, and documentation of the event.
- Estimate your current-year MAGI as accurately as possible.
- Request a re-determination if you qualify (often via SSA-44).
Bottom line
IRMAA can feel like a penalty for doing something smart (selling a business, retiring well, converting to Roth at the right time). But in some cases, it’s simply the system using an outdated snapshot of your income. The key is to confirm what they used, and then determine whether you have a valid path to request a reduction.
If you’d like help thinking through your IRMAA notice – or planning the timing of large income events so Medicare premiums don’t jump unexpectedly – Legacy Wealth can walk through it with you and coordinate with your tax professional as needed.
These are the opinions of Legacy Wealth Management, LLC and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. Dan Funderburk is a Registered Representative offering securities through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Legacy Wealth Management, LLC and Cambridge are not affiliated. Cambridge does not offer tax advice. Copyright ©2026 Dan Funderburk. All Rights reserved. Commercial copying, duplication or reproduction is prohibited.
