How to Fight Back Against Your Medicare IRMAA Surcharges

You've worked hard your whole career, you've saved, and you've done everything right. And now you're on Medicare, and you get a letter from Social Security telling you that you owe hundreds of dollars extra every single month just because you made too much money. No warning, no chance to opt out, just what looks like punishment for doing a good job and setting yourself up for retirement. That's IRMAA. And what most people don't know is that in certain situations, you can fight back and win. Today we're breaking it all down: the real numbers, the real rules, and exactly how to use the appeal process strategically if you qualify.

00:01:05
Hello and welcome back to the Retired-ish Podcast. I'm your host, Cameron Valadez, and in today's show, we're diving deep into one of the most underestimated and misunderstood costs in retirement, and that is the IRMAA surcharge on your Medicare premiums. IRMAA stands for Income-Related Monthly Adjustment Amount. Rather than try to remember all that, just remember that it's essentially a surcharge or tax on your Medicare premiums that you pay depending on how much you make while enrolled in Medicare. This would apply to you once you reach age 65 and you sign up for Medicare, or if you're age 65 and older and you're still working and you have coverage from maybe your employer or your spouse's employer, then this wouldn't affect you until you ultimately get kicked off that coverage for retiring or something like that. Then you need to get on Medicare, and that's when this might apply to you. The sad part is that most retirees don't even know what this is until they get a letter from Social Security that tells them that they owe more for Medicare because they don't teach you about this stuff in many places. And then half the people who are subject to these surcharges and may be able to actually appeal them, they never do because they either don't know they can or they simply don't know how.

00:02:28
So today we're covering it all: what IRMAA actually is, the numbers for 2026 to know whether or not you might be affected, who can appeal it, and how the appeal process works, including some specific scenarios around retirement timing. And we're going to bust a couple of persistent myths about when you can and can't use this appeal process as well. Also, we have a related listener question from Michelle this week. Be sure to stay tuned for that at the end.

All right, let's get into it. Once again, IRMAA stands for Income-Related Monthly Adjustment Amount. It's a fancy name, but it's a simple concept. If your income exceeds a certain threshold, you pay more for Medicare or the premiums specifically. You pay more for Part B, which covers your doctor's visits, outpatient care, and medical equipment. You also pay more for Medicare Part D, which is your prescription drug coverage. So in short, there is a potential surcharge on the premium for each of these two types of coverage. Medicare has a standard, or what is called the base premium, that everybody pays for Part B. And in 2026, that Part B base premium is $202.90 per month. Most people pay that and move on with their lives. If you're collecting Social Security, it comes directly out of your payment. And if you're not yet on Social Security, you'll get a quarterly bill for it. But if your income is high enough, the government stacks an additional surcharge on top of that. That's the IRMAA surcharge. There are various brackets similar to tax brackets that you can fall into, which dictate how much your surcharge will be, if any.

00:04:16
And we will get into those a little bit later. If you're someone who's already on Medicare and you happen to have what is called a Medicare Advantage Plan, and that Advantage Plan happens to have a $0 monthly premium, you might be thinking, "Wait, I thought Medicare was free." That is actually not the case. Even if you have a $0 premium Medicare Advantage Plan, you still pay the premium for Part B. Again, everybody does that's enrolled in Medicare. However, I will say that there are some newer Medicare Advantage Plans out there nowadays that are reimbursing people for that Part B premium. But again, that's a reimbursement. Everybody's paying it. And in fact, many of these Medicare Advantage Plans have a prescription drug plan also bundled in with them. In this case, you can still owe the IRMAA surcharges on that drug plan, even though you didn't go out and get a separate Medicare Part D drug plan on its own. But I digress. Just be aware that there is no loophole to get away from IRMAA surcharges, depending on the type of plan that you get, whether it's Medicare Advantage or a Medicare supplement plan of some sort. What we generally tell clients at our firm is to start planning for this potential IRMAA issue by age 63 at the latest, but preferably several years before, so that we have time to utilize some strategies to hopefully avoid IRMAA entirely by the time you reach Medicare age. We will get into what some of those strategies might be in a bit as well.

00:05:52
However, I do want to note that it's not age 63 for everyone because some of you will work past age 65 and have health care coverage from your employer or maybe your spouse's employer. So you might not enroll in Medicare Part A and B until years later when you retire, and you lose that coverage and, like I said, enroll in Part B at that time. So why generally age 63? Well, this is because most people are eligible for Medicare at age 65, and there is a two-year lag between the income that you report on a tax return and the imposition of any potential premium surcharges. And this is referred to as an initial determination. Premiums for the initial determination year are based on what is called your Modified Adjusted Gross Income, or MAGI for short. It's based on that MAGI from two years prior, based on the most recent tax return that is available through the IRS.

00:07:01
Even though Modified Adjusted Gross Income sounds like a big, scary term, it's actually fairly easy in terms of calculating for IRMAA surcharge purposes. It's calculated as your Adjusted Gross Income, or AGI, which is simply line 11 of your tax return or 1040. It literally says Adjusted Gross Income right there for you. And then what you do is you add any potential tax-exempt interest income that is listed on line 2A of your 1040. So again, it's listed right there for you. And for purposes of IRMAA, that's it. It's just your AGI plus municipal bond interest, essentially, if you have any. That's the MAGI or income figure that will get applied to the IRMAA surcharge brackets. What's included in the AGI figure on line 11 of your tax return? It's pretty much everything. It's any wages you might have, self-employment income, distributions from traditional IRAs, 401(k) distributions, pension income, the taxable amount of your Social Security benefits, capital gains, rental income, business income, Roth conversions, all that stuff. What's not included in line 11 under AGI? Well, if you have any distributions from something like a Roth IRA, which is one of the many long-term benefits of having a Roth balance to begin with, there's also QCDs or Qualified Charitable Distributions. If you're making charitable donations from your IRA, those come out pre-AGI, which is an important planning tool for managing your income for IRMAA purposes.

00:08:46
And lastly, the untaxed portion of your Social Security is also excluded from that AGI number in line 11. And again, municipal bond interest from line 2A gets added back in. If you have any of those, you would know if you did. If you've been buying municipal bonds, thinking that they are tax-free because generally the income from municipal bonds is tax-free, that's one of the benefits. They are tax-free for income tax purposes, but they still count towards your IRMAA calculation. Just something a lot of people miss.

Okay, so now that you're able to determine what your income is for IRMAA surcharge purposes, what do you do with that income number? This is where the IRMAA brackets come in. As we discussed, your, let's say, 2026 IRMAA is based on your 2024 MAGI. If, for some reason, your 2024 tax return wasn't available for whatever reason, because you haven't filed 2024 yet, they would fall back to 2023, but the standard is two years prior. There are five IRMAA brackets or tiers, whatever you want to call them. I'm going to give you the 2026 numbers for both single filers and those of you married filing jointly, along with the actual premium that you would pay. By the way, in previous Retired-ish newsletters, we have provided a free download for our 2026 financial and tax numbers. It's a nice little cheat sheet front and back that actually gives you a lot of the different important figures for the current year.

00:10:25
And our current sheet actually includes the full IRMAA brackets as well as the base premiums for Part B. So if you haven't subscribed yet, there's an example of something very useful that you can get from our newsletter. And again, it's totally free.

For 2026, the standard Part B premium, again, with no IRMAA surcharge, is $202.90 per month. Why they don't just make it a nice round number, I don't know. You pay only that if your 2024 MAGI was $109,000 or less if you filed single, or $218,000 or less filing jointly. But once you cross those thresholds, here's what happens. Tier one, single MAGI above $109,000 all the way up to $137,000, and joint above $218,000 up to $274,000, your Part B premium becomes $284.10 a month. That's an $81.20 surcharge per spouse that's enrolled in Medicare per month. And then for Part D, it'll add $14.50 per month on top of your plan premium if you have one, again, per spouse enrolled in Medicare per month.

Tier number two, single filer above $137,000 up to $171,000, or married filing joint above $274,000 up to $342,000, Part B jumps to $405.80 per month total. Part D adds another $37.50. So as you'll notice, your Medicare premiums literally double once you get into just the second tier out of five. Rather than sit here and throw all those numbers at you, I'll leave that to you to check out the charts.

00:12:22
However, I will end here with the highest tier, which is tier number five. And that is any single filer that makes $500,000 and above, joint is $750,000 and above. In those cases, Part B caps out at $689.90 per month, and Part D caps out at $91 per month, added on top of any potential Part D premium you already have.

Let me put this in perspective with a couple of important points. First, these are per-person costs. If a married couple is both on Medicare, each of them pays the surcharge independently. So a couple in tier two is paying $405.80 each per month for Part B alone. That's over $9,700 per year just for Part B between the two of them. That's not counting the premiums for Part D, any out-of-pocket medical costs, out-of-pocket drug costs, dental insurance, vision, hearing aids, any potential Medicare supplement premiums. The list goes on. Second, and this is probably the most important of all, IRMAA is a cliff system. It's not a progressive one. So in regular income tax, if you earn one more dollar over a bracket line, only that dollar gets taxed at that next bracket's rate.

00:13:49
IRMAA doesn't work that way. If your MAGI is $109,001 as a single filer, so $1 over the threshold, you and your spouse pay the full tier one surcharge for the entire year. That one extra dollar costs you and your spouse $1,949 in additional Part B premiums annually. I promise I'm truly not trying to scare you, but I want you to realize how important planning for this stuff can really be. If you sit back for a second and accept that this surcharge is just another form of tax, and you do the math on paying $1,949 in additional taxes for earning just $1, first, you might spit out your coffee. But second, you'll realize that planning for this ahead of time can have a tremendous financial impact on your retirement, and it had nothing to do with things like investing. This is why IRMAA management and income planning around these thresholds is so critical.

00:14:58
Shortly, we will get into strategies to mitigate this in retirement and even ways to appeal certain situations where you might be subject to these surcharges. Before that, I want to note one last important point here. For those of you that might be married, filing separately, so this is fairly rare, but I know you're out there. If you're married but filing separately, these rules get even more brutal. In fact, they're incredibly brutal. The income threshold is still $109,000, but the IRMAA hits you immediately at tier four numbers, which is $649.20 per month, which includes both the Part B and D surcharges in that figure. There's almost no tier one, two, or three benefit if you're living with your spouse and filing separately. This catches a lot of people off guard who file separately for whatever reason. So plan accordingly. Medicare announces these surcharge brackets and amounts in the fall of each year because, yes, they do change year to year.
Beginning in November, the Social Security Administration will actually send an annual notice of the next year's Part B and D base insurance premiums that everyone will pay, along with any associated IRMAA surcharges that will be imposed for the upcoming year. So, for those of you that are not yet on Medicare, hopefully this isn't too big of a shock to you. But just like health insurance premiums for everybody else in the world, Medicare premiums and the surcharges also go up when the cost of insurance goes up.

00:16:36
Inflation, right? This is why investing throughout retirement is so important. We need to keep up with inflation so we can continue to pay our bills. Every year, you will realize that the Part B and D premiums go up. And again, that's because of the inflation of health care costs. So, to put this together as an example, Part B and D premiums for 2026 were revealed in late 2025, and they were based on your MAGI from 2024, which was two years prior, which you reported on a tax return filed in 2025. And going forward, 2025 MAGI will determine your 2027 Medicare premiums, and so on and so forth.

00:17:26
Okay, now that we've made it through that brutality and you have a base level of understanding of what these surcharges are, let's cover some of the most common situations where people get hit with IRMAA. The first one is you retire from a high-income career. So you worked most of the year, you made good money, you retire in, say, October, but your income for that year is still high. Well, two years later, that income shows up, and it triggers IRMAA on your Medicare premiums, even though you might be currently earning a lot less in retirement.

The second one is RMDs that kick in in your seventies. So, required minimum distributions or RMDs from your traditional IRA or accounts like a 401(k) start at age 73 or age 75, depending on the year you were born. For people who spent decades accumulating pre-tax retirement savings in these accounts, the RMDs can be significant by the time you're in your seventies, and every dollar of your annual distributions will count towards IRMAA. This frequently comes up with our clients because our firm typically helps those that are high earners in their pre-retirement years and/or those that have just saved diligently their entire lives and build retirement accounts in the million-dollar to multi-million-dollar range. That diligent saving and investing, the exact thing that everyone tells you to do when you become a hardworking adult, actually ends up sort of hurting you later in life by causing these IRMAA issues. Go figure, right? But that is, unless you plan early enough and accordingly.

The next one is Roth conversions. A lot of people who are proactive planners consider doing Roth conversions in their sixties before those RMDs start. However, if you are doing Roth conversions in your sixties, this can actually cause you to trip into some of those IRMAA brackets, causing surcharges a couple of years later.

00:19:32
This is just something to be mindful of. In fact, I have seen many times in my career that even though a Roth conversion will cause IRMAA in a particular year or two down the road, the conversion might still make sense for other reasons. So this requires a very careful financial and tax analysis. You kind of have to weigh the pros and the cons. What might save a certain amount of taxes in one aspect might also cause IRMAA, which is another tax in another aspect. But we have to measure the size of the tax impact and how long it lasts.

The next one is the death of a spouse. Unfortunately, this is a situation that's fairly hard to plan for. Most people don't plan for that, and it's also not fun to plan for. But if your spouse predeceases you, you can very easily fall into the IRMAA trap. The reason for this is because if you remember what we discussed earlier, the brackets are much different if you file single versus joint with your spouse. And after you lose a spouse, you'll have to file single in the following years, and you may also inherit your spouse's retirement accounts and possibly receive a portion of any pension they may have had as well. So your income might stay close to the same as it was before. However, now you're looking at these single brackets versus married filing joint, and therefore you could easily and suddenly become subject to the surcharges, which is not fun. And oftentimes this is just one of those surprises that blindsides many widows.

The next one is selling appreciated assets. And this happens all the time. A rental property, a business, a concentrated stock position. For those of you that get stock equity awards from your employers, etc. In other words, if you cause a large capital gain in a given year, it will temporarily spike your income and potentially trigger IRMAA two years later. The next one is pension income.

00:21:31
Many retirees have pension income, Social Security, and maybe some investment or rental income that is fairly consistent and permanent. And the combination of all of these pushes retirees over the IRMAA thresholds. For instance, maybe you retire in your late fifties or early sixties, and you have pension income, rental income, investment income, etc., and you're not past the IRMAA thresholds throughout your sixties, but you're delaying Social Security until 70. Well, that larger Social Security benefit that you're going to collect at age 70 could then cause you to trip into IRMAA. You're sort of stuck because you have all of this income coming in without any flexibility as far as the timing or the amount of the income. The faucet is on, and the handle is broke, so to speak. So you're sort of trapped. And unfortunately, sometimes it just is what it is, and there's not much you can do about it. But other times, if you plan early enough, you might be able to avoid it or at least mitigate the damage into one of the lower brackets.

The bottom line is that IRMAA isn't just a problem for the ultra-wealthy. It affects middle to upper-middle-income retirees as well, especially those who were high earners late into their careers or have meaningful retirement account balances. Again, you could have made a very modest income over your entire career, but because you saved so well in things like pre-tax retirement accounts, you could definitely have this issue in retirement.

Okay, finally, we understand what IRMAA is and who it affects. But if you get that letter in the mail that says you're going to owe IRMAA surcharges, are there instances or situations where you can fight back and appeal it? And the answer is yes. But of course, it depends. And this is where Form SSA-44 comes in. SSA-44 is the Medicare Income-Related Monthly Adjustment Amount Life-Changing Event Form.

00:23:35
Yes, I know that's a mouthful. It's the official mechanism to ask the Social Security Administration to use a more recent year's income or current income instead of the standard two-year lookback. These appeals are generally required within 60 days of receiving that IRMAA notice, and the 60-day deadline begins the day after you get the IRMAA letter, with the assumption that the letter is received five days after the date indicated on the letter. And the key phrase there is life-changing event. So here's the specific events that they actually list on the form itself.

The first one is marriage. Then it's divorce or annulment, death of a spouse, work stoppage, which could mean retirement, work reduction, loss of income-producing property. But with this one, it's only due to an involuntary event like a disaster, a theft, or disease. They actually list these things on the form. So not technically a voluntary sale like selling a rental property, but we'll come back to that. Number seven is loss of pension income. So if your pension terminated or was significantly reduced for some reason. Number eight, employer settlement payments. So if you received a one-time settlement or a lump sum from a former employer or something like that, notice what's on that list and what's not.

00:25:06
One-time income events like selling a rental property, doing a Roth conversion, or taking a big capital gain, which would all increase your income substantially. Those are not on the list. But again, I'll get to a small caveat here shortly. When you file this Form SSA-44, you'll need to provide which life-changing event occurred, the date of the event, your actual or your estimated MAGI for the year that you want the Social Security Administration to use or go off of. And you're going to have to include some documentation, basically some proof. So we'll walk through what this looks like in a moment. Then the form has steps two and three.

00:25:51
Step two is where you report the income reduction that has already occurred. You are telling the administration, "I had this life-changing event, and here is my current or recent MAGI that should be used instead of the year you're currently using." And then you enter the year of income you want them to consider. Then there's step three, which asks if you expect your income to be even lower in the following year, beyond what you reported in step two. You can lock in a future year's estimate so the administration can use it the following year as well. So you only complete step three if you're projecting additional declines in income going forward. So to be clear, if you want the administration to use your current year's lower income, say you retired this year, and your MAGI is going to be much lower, that goes in step two.

00:26:46
Step three is not for current year's income. It's one year ahead of whatever you put in step two. Let's walk through some real-world scenarios. I'm not going to go through actually filling out the form line by line, but I want to go through some of these scenarios because the timing of retirement creates some interesting nuances with this form. Okay, we'll start with scenario A, which is a mid-year retirement. So we have David. David is a high-earning executive who retired in June of 2025.

00:27:15
In 2024, he earned $350,000. Now he's on Medicare in 2026. Because IRMAA is based on 2024 income, David is getting hit with Tier 4 IRMAA in 2026, which is roughly $650 a month for Part B, on top of his Part D surcharge of around $83. So he's paying over $8,800 per year just in basic Medicare premiums. Holy cow, I know. But David's 2025 income? Well, with six months of work and then his retirement, let's say his MAGI came in around $175,000. That's still in Tier 2, but it's a significant improvement from Tier 4. So in this situation, David can file Form SSA-44. His qualifying life-changing event would be work stoppage because he retired. He enters the date of his retirement in step one and reports his 2025 MAGI of $175,000 in step two.

00:28:24
And then the administration will recalculate his 2026 IRMAA based on that 2025 income, which would drop him from Tier 4 to Tier 2. So he goes from roughly $650 a month down to about $406 a month, which saves him nearly $250 a month or $3,000 a year. If David also expects his 2026 MAGI to drop even further because that would be a legitimate full year at his lower retirement income, say he projects $80,000 in 2026 between Social Security and investment income, he'd complete step three to project that lower amount. So SSA can use it for his 2027 IRMAA calculation. When filing, David should attach documentation of his retirement. So something like a letter or email from his former employer confirming his retirement date, maybe his final pay stub, or similar evidence. The stronger the documentation, the smoother the process.

00:29:31
We will get into some tips when filing towards the end of the episode. All right, scenario B is retiring just before the new year. So let's say late December. So meet Sandra. She was a physician and retired on December 31st, 2024. She's turning 65 in early 2026 and at that time, will be enrolling in Medicare. In that case, her 2024 income still reflects basically a full year of physician earnings.

00:30:01
So her 2026 IRMAA is calculated on that 2024 income, which is still high. However, the SSA-44 form, going off of 2025 income rather than 2024 income, would show much lower earnings since she retired in 2024. So 2025 would consist primarily of retirement income like Social Security, maybe some IRA or 401(k) distributions, rental income, or some other sort of investment income. And this is where that form has some real power. If her 2025 MAGI is, say, $90,000, she can file an appeal and drop out of IRMAA entirely for 2026. So her qualifying event is work stoppage as of December in 2024. Again, the date of the event must fall in the same year or an earlier year than the tax year that you're asking Social Security to use. And in this situation, since she retired in December of 2024 and she's asking the administration to use her 2025 income, the timing works out perfectly. And here, the documentation would be her retirement letter from her employer or medical group, and ideally her 2025 tax return if it's already been filed. If the 2025 tax return hasn't yet been filed, say she's filing the form early in 2026 to appeal, she can provide an estimate and update the administration once the return is filed. The big lesson across these scenarios: don't just accept the IRMAA letter from the administration at face value. If you've had a qualifying life-changing event, file the appeal. The approval rates for legitimate events are actually pretty high. All right, so what doesn't technically qualify as one of those events that you can appeal?

00:31:59
And I'll start with a really common one, and that's, "Hey, I sold my rental property. I had a huge capital gain, and yes, that increased my income pretty substantially, but it was just a one-off event. It's not permanent income that I'm now receiving. So can I appeal my IRMAA surcharge just for that year?" And the answer is technically no. The form literally, explicitly states this type of transaction. IRMAA surcharges are a function of your reported MAGI. If you sold a rental property in 2024 and you recognized a $300,000 capital gain, that gain absolutely counts towards your 2024 MAGI. And two years later, in 2026, that will show up as IRMAA surcharges based on that higher income amount, or you will be assessed IRMAA surcharges based on that higher income amount. Many people figure, "Well, that was a one-time event. I don't have that income anymore. Surely I can appeal.

00:32:56
That doesn't make sense." But the form appeal process isn't designed for one-time income spikes. It's designed for structural changes in your income due to major life-changing events. Look back at the qualifying events list on the form. Loss of income-producing property is one of those reasons on that form, and it sounds like it might apply to a rental property sale. But if you read the fine print, that provision applies to involuntary loss. So something like a disaster or a natural catastrophe, condemnation, something that was done to you.

00:33:36
If you voluntarily sold your rental property because you wanted to, that is not a qualifying life-changing event under Social Security's rules, even if the sale was a smart financial move. So yes, you may get stuck with one year where you have a substantial increase in your Medicare premiums. However, after that, they can come back down. But what's sort of funny and ironic about this example with a rental property, specifically, is that your property likely produced taxable rental income that was included in your AGI. If you sell it, as long as you didn't purchase a new one that is also giving you taxable income, you probably do have a real reduction in your income, which will reduce your AGI and therefore may help you reduce or eliminate IRMAA, depending on the amount. That being said, in similar cases, when our firm helps clients with IRMAA appeals, we typically will have clients appeal anyway because asking doesn't hurt, and it doesn't cost anything either. We have actually seen success in cases like this with clients that actually go to a Social Security office in person for an appointment in order to file the appeal, and they bring the form filled out as well as all of the necessary documentation, and then they also give them their reasons why they think they deserve an appeal. And yes, even though the form specifically says that it's not a legitimate reason for an appeal, sometimes it still gets honored. Kind of interesting, actually.

Another situation people often want to appeal is when they do a big Roth conversion. Can you appeal that? The answer, again, no. And I understand why people think this because a Roth conversion is explicitly a tax planning decision. You're intentionally increasing your income in a controlled way, so it feels different from earning consistent income in the markets or from a paycheck, what have you.

00:35:37
But from Social Security's perspective, a Roth conversion is just income. It shows up on your tax return as essentially a distribution from your IRA, and for all they know, you spent the money. It increases your MAGI, and therefore, two years later, it can push you into an IRMAA bracket. Roth conversions are not on Social Security's qualifying life-changing events list, and honestly, they probably shouldn't be. You made a deliberate financial decision that increased your reportable income. The IRMAA hit two years later is part of the cost-benefit analysis of that conversion, or at least it should be. This is why when we work with clients on Roth conversion strategies, typically in their 60s and 70s, we run the numbers to include potential future IRMAA implications.

00:36:26
A big conversion that looks great from a pure income tax standpoint might look different when you factor in an extra $1,000 a month in Medicare premiums for your next year of eligibility. So that's why I said earlier, this often catches people by surprise because it's not an extra tax that you necessarily see on a tax return. The planning lever here is managing the size of the conversions to stay under certain IRMAA thresholds or brackets, or deliberately doing conversions in years where you're not yet on Medicare or enrolled in Medicare. If you retire “early”, the years between your retirement and age 63, or two years prior to enrolling in Medicare, can be a sweet spot for those Roth conversions because the income might be lower. You're not on Medicare yet, so IRMAA isn't a factor.

In any case, if you're going to do something or have some sort of event that otherwise wouldn't qualify, and it's going to substantially increase your income and cause IRMAA in a future year, what you can also do is try and time that with some other event that would qualify. So I'm not saying to do this exactly, but as a hypothetical example, if you were to sell your vacation property and it's going to cause a big capital gain and increase your income on your tax return, maybe you do that in a year where you retire, or maybe in the years prior to retirement, and you reduce your work hours, or maybe you semi-retire and work on a consulting basis for your former employer so that you have less hours and less income. Again, maybe just try and pair it up with something else that would actually qualify.

Before we wrap up, let me give you a few practical notes if you're going through this process. The first one is wait for your determination notice. You technically can't file the Form SSA-44 preemptively. The administration sends an initial IRMAA determination notice. That's essentially the letter telling you that you owe a higher premium. And once you receive that, you have 60 days to file an appeal. So keep that letter. It has information that you'll need. The second thing is gather the important documentation you'll need to make your argument. The form actually tells you what kind of documentation to have prepared to an extent. Also, you'll want the tax return for the year that you want the administration to use. Where to file? You can submit the SSA-44 at your local Social Security office in person.

00:39:08
I recommend making an appointment. You can do it by mail, fax, or actually by uploading it through Social Security's online document portal, which is relatively new. In person tends to move faster and gives you a chance to ask questions. It also may increase your chances of approval if you have one of those technical situations we talked about earlier. Success with an appeal like that probably will depend upon the agent handling the request and how well the case is presented with good supporting documentation. The processing time is typically 30 to 60 days, though it can vary. If approved, the reduced amount applies prospectively, meaning going forward. You may also receive a refund or credit for any overage you've already paid in the current year.

Another big one is that spouses need to file separately, not in terms of filing your tax return, but file the Form SSA-44. If both spouses are on Medicare and both owe IRMAA, each spouse needs to file their own SSA-44. The form is per person, not per household. And if they deny you, you have the right to appeal the denial. First, you request what's called reconsideration with the Social Security Administration. And if that fails, you can escalate to the Medicare Appeals Council.

00:40:34
In practice, for legitimate qualifying events with solid documentation, you shouldn't get to that stage, but it's good to know that it exists. And lastly, if your request is approved, the Social Security Administration will send a confirmation letter. If successful, you can generally expect the surcharges to be adjusted and refunded within 30 days of receiving that approval notice.

Okay, really quick, before we get to our listener question, how can you try and avoid IRMAA in the first place? What are some of the strategies? The first one I would say is that it's best to begin controlling your MAGI well before age 63. This would require sitting down and doing some in-depth financial and tax estimates. There's just no way around that.

Number two, utilize some tax diversification strategies, and that could be by converting pre-tax retirement accounts to Roth accounts in years in which income is low or lower than expected future rates, like we talked about before. And that's in order to build a source of potentially tax-free distributions that will help in terms of not affecting IRMAA when you take money from those Roth accounts. You can aim for full conversion of all pre-tax money that you have, if possible, at least a few years prior to Medicare enrollment, if the converted amount would otherwise bump you into IRMAA territory. If you can't convert everything, it's not the end of the world. Doing some conversions is better than nothing. You still might be subject to IRMAA at some point, but doing this early on in the years prior may help you out of the higher brackets, if anything.

00:42:20
Number three, those at or beyond age 70 and a half who are also charitably inclined and have an IRA should consider taking advantage of what are called qualified charitable distributions or QCDs. These are from IRAs, and these help you reduce income and satisfy all or a portion of any required minimum distributions down the road. So, instead of just giving to charity out of your bank account or to your church out of your bank account, once you're required to start taking RMDs, you can send the charity or the church money from your IRA, and that actually reduces your RMD, which reduces your taxable income and your AGI and helps with IRMAA.

Number four, pre-Medicare, maximize health savings accounts and contributions to them if an HSA is available, meaning you have one and you have a high deductible health plan, and that makes sense for you to begin with, because in order to have an HSA, you have to have one of those high deductible health plans. Qualified HSA withdrawals they're tax-free, and they don't increase your AGI or your MAGI. So that's what makes them beneficial. That's why it's a strategy.

00:43:41
However, one little quirk that very few people realize is that if you take distributions from your HSA in retirement to pay for Medicare supplement premiums, a.k.a. Medigap premiums, it's actually not a qualified distribution, and those withdrawals will actually be taxable. So you won't get a benefit there in terms of IRMAA. So be careful. It does not work for Medicare supplement premiums specifically.

Number five, you can withdraw from Roth IRAs and designated Roth accounts, such as Roth 401(k)s, or take loans from potential cash value life insurance in years in which MAGI is sneaking up next to IRMAA's door.

Number six, before raiding any of your retirement accounts to make a large purchase at age 63 or older, you can consider straddling a withdrawal over two tax years in order to reduce or eliminate the impact of IRMAA. This, again, is one of those things that we often do for clients. It comes up quite a bit. Let's say somebody needs to purchase a new car. And as we know, cars are really expensive nowadays. Or maybe they want to gift their child a lump sum in order to help them buy a home. That's another common one. There are different things that you can do to help reduce the impact of IRMAA.

00:45:03
It might be the case where you got to do what you got to do, and the distribution is actually going to send you three IRMAA brackets higher, and you're just going to take that pain for the higher surcharge for the one year. But if we can straddle that over two years, for example, maybe we wait until the end of December. That way, we can make half of the distribution now from the retirement account and then the other half after January 1st. Maybe you'll just jump one tier instead of multiple, right? Because we'll spread it across two different tax years. You have to weigh the overall impact long-term. Or maybe instead of taking a large distribution from something like an IRA when you're trying to gift money to a child, consider other sources.

00:45:48
If you have another non-retirement account with investments in it, let's say something like stocks and bonds, or it's a trust account with stocks and bonds and there's a lot of gains in there, you may be able to gift your child these shares of the stocks, bonds, whatever, and have the child sell the shares and report the gains on their own tax return. They might actually not even owe any taxes on that. It just depends on their situation. This is opposed to you selling the shares and then giving your adult child the money. That way, you don't have any additional income to report, and it doesn't send you up three IRMAA brackets and double your premiums for a year.

00:46:28
Your kids aren't subject to IRMAA yet, likely. And if your kids do owe taxes from the transaction and you want to help them pay those taxes, you can still gift them cash later in order to pay it all and still avoid the extra tax from IRMAA yourself. As you can see, these strategies can literally save you tens of thousands of dollars, if not more, over a 20 to 30-year retirement. And of course, this isn't even all of them, especially when you and your spouse are on Medicare because the surcharges apply to both of you individually but are based on your combined income.

Let's get to our listener question from Michelle. Thank you so much, by the way, for your question. These are super important because I guarantee you are not the only one with this question. So this helps people all around the world. Now, Michelle says, "Hello. I'm so happy to have recently discovered your podcast. You provide an incredible amount of information and details I haven't found in other sources." Wow. Thank you, Michelle. That is exactly the goal. Glad to know you are all finding this information useful and unique. Thank you. She continues on. “Does it make sense to file Form SSA-44 after deferred compensation ends three years after retirement? If so, which life-changing event would it fall under? The income will be from a non-governmental 457 account. Thank you.” Awesome question, Michelle. I'll answer this the best I can with the limited information that I have.

00:48:03
Hopefully, this helps. In regards to the income coming from a non-governmental 457 account, I won't get into exactly what that is and how it differs from other types of retirement accounts. Essentially, this account is providing you with income that is taxable. So that's the bottom line. That's what we care about here. I will also assume that for this answer, that you have determined that you will definitely fall within one of the five IRMAA brackets. So first and foremost, it depends on when you are retiring.

00:48:38
If you are retiring a few years before age 63, then you should have nothing to worry about. If you will be retiring after age 63 or while you are enrolled in Medicare, then yes, it will likely make sense to file an appeal. It will also depend on the amount of income you're getting from the 457 on an annual basis. If you look at your MAGI and you're towards the top of a bracket or dead in the middle of an IRMAA bracket, and after backing out your 457 income, you are still in that same bracket, an appeal is probably not going to do anything. However, there is a lot that could happen here. Again, I don't know what will apply to you because I have limited information here. If your income goes down because the deferred compensation has ended, but you decide to make up for that lost income by increasing withdrawals from, say, a 401(k) or an IRA, for example, then you will be bringing the income back up.

00:49:40
And if you appeal, but your income is similar, then again, nothing is likely to happen, of course. Or maybe you do have other pre-tax retirement accounts, such as an IRA or a 401(k), and you don't plan on making any withdrawals, but you're close to reaching age 73 and you'll have to start taking required minimum distributions, which again will force you to make distributions from your IRA, and that will bring the income back up and again put you in the same spot. The same thing could happen if your deferred comp ends around the time you plan on taking Social Security, because again, some of that income would be made up for by the Social Security you're now collecting. One other thing that may or may not apply to you is the fact that if you are to receive any sort of inheritance relatively soon or potential inheritance, depending on what is inherited, so dollar amounts and what the types of assets are, that could also affect your future income. Really, you just need to assess whether or not that lost deferred comp income is going to be made up from some other source around the same time that the deferred comp ends. Hopefully that makes sense. All of this is sort of a timing decision and a decision that depends on your financial plan and the potential strategies that you're considering or already doing.

00:51:08
As far as what life-changing event does it fall under? I think without diving into the technical weeds of non-governmental 457 plans, this could definitely fall under loss of pension income, which is one of the exact events listed on the form. So your best bet here is probably to get the documentation that proves the income has ended once you reach that date and bring in some prior pay stubs as well. Explain your situation in person with someone at your local Social Security office rather than uploading everything online or faxing it in. I know that those last two are kind of the the easy way out. It's the easy button, remember, from the commercials. But if you want the best chances of success, I would probably go in person.

00:52:01
Just a heads up, even though you'll have an exact idea of when your income is going to go down after that third year, don't file the appeal too early. You have to get your determination letter that tells you that they're going to impose IRMAA first. Once you get that letter, then you can file your appeal. That's all I got for you. Hopefully, that was helpful. If you have a follow-up question, feel free to send it in. Thank you.

00:52:25
So that does it for this week's episode. As always, if this episode was helpful, please follow the podcast and share it with somebody that you think may benefit. Be sure to check out and subscribe to the Retired-ish newsletter I mentioned earlier. It'll give you more useful information on retirement planning, investments, taxes, things like that once a month straight to your inbox. And usually in that newsletter, we dive deeper into some of the topics we discuss on the show, as well as provide some useful guides and charts available for download, such as our important planning numbers for 2026.

If you want to dig into this for your specific situation, whether that's understanding where you fall in the 2026 IRMAA brackets, running the numbers on a potential SSA-44 appeal, or building a Roth conversion strategy that accounts for future Medicare costs, those are the types of things we do at Planable Wealth. So head to PlanableWealth.com to learn more or check out the episode show notes right there on your podcast app. Or you can head over to retiredishpodcast.com/92. Once again, I'm Cameron Valadez, Certified Financial Planner and Enrolled Agent. Thanks for tuning in and following along. See you next time on Retired-ish.

00:54:02 Disclosures
Cameron Valadez is a registered representative with and securities and advisory services are offered through LPL Financial, a registered investment advisor member, FINRA SIPC. The opinions voiced in this podcast are for general information only and are not intended to provide specific advice or recommendations for any individual. This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific tax issues with a qualified tax or legal advisor. Tax and accounting-related services offered through Planet Business Services, DBA Planable Wealth. Planet Business Services is a separate legal entity and not affiliated with LPL Financial. LPL Financial does not offer tax advice or tax and accounting-related services.