IRMAA Planning for $1M–$5M Investors: 2026 Medicare Surcharge Guide
A Roth conversion, a single required minimum distribution, or the year you sell your business can quietly add $3,000–$13,000 in Medicare surcharges — per couple — two years later. IRMAA (Income-Related Monthly Adjustment Amount) is the IRS's way of charging high earners more for Medicare. At $1M–$5M in assets, you're exactly in the income range where careful planning can eliminate it entirely — or at least manage which tier you land in.
How IRMAA works — the two features that bite people
Two-year lookback. Medicare charges you based on your MAGI (Modified Adjusted Gross Income) from two years prior. Your 2026 Medicare premium is set by your 2024 tax return, filed in early 2025. That means a large Roth conversion in 2024 shows up in your 2026 Medicare bill — even if your income dropped significantly by then. You can appeal with Form SSA-44 if a qualifying life event (retirement, divorce, death of a spouse) reduced your income.
The cliff effect. IRMAA is not a smooth surcharge — it's a step function. Earning $1 over a threshold costs you the same as earning $50,000 over it. A married couple with $218,001 MAGI pays the same Tier 1 surcharge as a couple with $273,999. This creates a very specific planning target: know your thresholds, and stop income events just below them.
2026 IRMAA brackets — exact figures from CMS
IRMAA affects both Medicare Part B (hospital/doctor coverage) and Part D (prescription drugs). All surcharges are per person per month — a married couple on Medicare doubles every number in the table.1
| 2024 MAGI (single) | 2024 MAGI (MFJ) | Part B total/mo | Part D surcharge/mo | Annual extra cost/person |
|---|---|---|---|---|
| ≤$109,000 | ≤$218,000 | $202.90 (base) | $0 | — |
| >$109,000–$137,000 | >$218,000–$274,000 | $284.10 | +$14.50 | +$1,148/yr |
| >$137,000–$171,000 | >$274,000–$342,000 | $405.80 | +$37.50 | +$2,885/yr |
| >$171,000–$205,000 | >$342,000–$410,000 | $527.50 | +$60.40 | +$4,620/yr |
| >$205,000–<$500,000 | >$410,000–<$750,000 | $649.20 | +$83.30 | +$6,355/yr |
| ≥$500,000 | ≥$750,000 | $689.90 | +$91.00 | +$6,936/yr |
Source: CMS 2026 Medicare Parts A & B Premiums and Deductibles Fact Sheet.1 Part D surcharge applies to standalone Part D plans; Medicare Advantage plans with drug coverage may differ. Annual extra cost includes combined Part B surcharge + Part D surcharge × 12, per person. IRMAA is based on your 2024 MAGI (filed in 2025) for 2026 Medicare premiums.
2026 IRMAA Tier Calculator
Enter your filing status and estimated MAGI (use your 2024 MAGI for 2026 IRMAA, or current-year MAGI to project 2028 costs). The calculator shows your tier, annual Medicare surcharge, and how far you are from the next lower tier.
Calculator uses 2026 IRMAA thresholds and premiums per CMS.1 Based on 2024 MAGI for 2026 Medicare. Add a Part D plan cost of ~$46.50/month (2026 national average) to the Part B premium to estimate total Medicare spending. Does not account for Medicare Advantage or supplement premiums.
What triggers IRMAA for $1M–$5M investors
At this asset level, the five most common IRMAA triggers are:
- Roth conversions. The most controllable trigger. Every dollar converted from a traditional IRA or 401(k) to Roth is added to MAGI in the conversion year. A $200,000 conversion on top of $120,000 in other income for a single filer jumps from no IRMAA to Tier 2 (>$137K). Spreading conversions across lower-income years is the standard fix — see our Roth Conversion Sweet Spot Finder.
- Required Minimum Distributions (RMDs). RMDs from traditional IRAs and 401(k)s are ordinary income. Once they begin at age 73 or 75 (SECURE 2.0), they're often impossible to stop without years of prior Roth conversion work. A $1.5M IRA at 75 generates ~$58,000 in annual RMDs — on top of Social Security, that's a meaningful push into IRMAA territory.2
- Capital gains from selling investments or a business. Long-term capital gains — including from selling a business, investment property, or concentrated stock position — add to MAGI for IRMAA purposes even though they're taxed at preferential rates. A $400K gain on a real estate sale in 2024 can put a married couple squarely into Tier 3 for 2026.
- Social Security taxation. Up to 85% of Social Security benefits are includible in MAGI above the base thresholds ($34,000 single / $44,000 MFJ combined income). For retirees with $2M–$5M in assets, SS benefits are almost always 85% taxable — adding $20,000–$40,000+ to MAGI automatically.
- Year of business sale or large windfall. In the year a business owner closes a $2M transaction — even after QSBS exclusion — remaining gain flows through MAGI. Installment sale elections under IRC § 453 and pre-close charitable moves can spread or offset this. One large event year can permanently affect the IRMAA lookback window for two years.
5 strategies to control IRMAA exposure
1. Front-load Roth conversions before Medicare begins
The cleanest window is ages 60–64, before Medicare at 65. Any income in that window — Roth conversions included — has zero IRMAA consequence. Even in the year you turn 65, your Medicare premium is set by your age-63 MAGI (two years prior). This creates a 5-year window after retirement to convert aggressively at controlled rates before any IRMAA clock starts.
2. Target conversions to stay just below tier thresholds
Once on Medicare, annual Roth conversions should target the bracket ceiling — not the IRMAA tier boundary. If those don't align, use the lower of the two as your cap. A married couple at $200,000 baseline MAGI can convert up to $17,999 to stay under the $218,000 Tier 1 threshold. Adding the conversion pushes total MAGI to $217,999 — no IRMAA. At $218,001, the surcharge costs $2,296/year for the couple. Worth stopping at the line.
3. Use Qualified Charitable Distributions (QCDs) to suppress RMD income
Once you reach age 70½, you can direct up to $111,000/year (2026 indexed limit) from an IRA directly to charity as a QCD.3 QCDs are excluded from MAGI entirely — unlike an IRA distribution followed by a charitable deduction, which still flows through MAGI and counts for IRMAA. If you're charitably inclined, QCDs are the most efficient tool for suppressing MAGI below an IRMAA threshold.
4. Manage capital gains realization timing
If you're selling a concentrated position or investment property, spread the realization over multiple years where possible. A $400,000 gain realized all in year 1 creates a 2-year IRMAA exposure window (years 1 and 2 lookback). Spreading $200K/year across two years may keep a MFJ couple under $410,000 (Tier 3 boundary) in both years — at the cost of additional planning complexity.
If you're above the $410,000 threshold no matter what, consider harvesting deliberately to clear a full tier rather than landing just above a boundary. Being in Tier 4 at $415,000 costs the same as Tier 4 at $650,000 — and the Tier 4 ceiling for MFJ is $750,000.
5. Appeal with Form SSA-44 for qualifying life events
IRMAA can be appealed if your income dropped due to a qualifying life event: retirement (stopping work), divorce, death of a spouse, reduction in work hours, or loss of income-producing property. SSA Form SSA-44 requests use of a more recent tax year for the IRMAA determination. This is especially useful when a large one-time event (business sale, large distribution) inflated a prior year's MAGI but income has since returned to normal. The request must include documentation of the event and evidence of the income change.4
The IRMAA cliff in practice: two scenarios
Scenario A: couple, $215,000 MAGI, considering a $50,000 Roth conversion
Current MAGI ($215,000) is already in Tier 1 for MFJ (threshold: $218,000). The full $50,000 conversion brings total MAGI to $265,000 — still within Tier 1 (up to $274,000). No tier change. The conversion adds $2,296/year in Medicare costs (Tier 1 for a couple, 2 years × $1,148/yr). Tax cost of $50K conversion at 22% marginal rate ≈ $11,000. The Medicare cost is real but modest relative to the conversion's long-term benefit.
Scenario B: single filer, $134,000 MAGI, $10,000 RMD due
Current MAGI ($134,000) is in Tier 1 (>$109,000). The $10,000 RMD brings total MAGI to $144,000 — crossing the $137,000 Tier 2 boundary. Result: the full year jumps to Tier 2 ($2,885/year vs. $1,148/year) — an extra $1,737/year for crossing by $7,000. The better move: if charitably inclined, direct $7,001 of the RMD as a QCD, bringing the net MAGI impact to $2,999 and keeping MAGI at $136,999 — below the Tier 2 floor. The IRMAA cost drops back to $1,148/year.
Get matched with a fee-only advisor for IRMAA planning
IRMAA exposure is one of the most overlooked six-figure planning items for $1M–$5M retirees. An advisor who works with clients at your asset level integrates IRMAA management with Roth conversion strategy, RMD timing, and charitable giving to keep Medicare costs as low as possible across your retirement.
Sources
- CMS 2026 Medicare Parts A & B Premiums and Deductibles Fact Sheet — base Part B premium $202.90/month; all IRMAA Part B tiers and thresholds; Part D surcharge amounts. IRMAA is based on 2024 MAGI for 2026 premiums: cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles.
- SECURE 2.0 Act of 2022, § 107 (Public Law 117-328) — RMD age 73 for those born 1951–1959; RMD age 75 for those born 1960 or later: Congress.gov. Uniform Lifetime Table divisors per IRS Publication 590-B.
- IRS Notice 2025-67 — 2026 QCD limit: $111,000 per individual from an IRA, for individuals age 70½ or older. Qualified Charitable Distributions are excluded from gross income and MAGI: IRS Notice 2025-67. See also IRC § 408(d)(8).
- SSA Form SSA-44 — Medicare Income-Related Monthly Adjustment Amount — Life-Changing Event. Used to request a lower IRMAA determination when a qualifying life event reduced income after the base tax year: ssa.gov/forms/ssa-44.pdf.
- IRS Publication 590-B — Distributions from Individual Retirement Arrangements: RMD rules, Uniform Lifetime Table, and interaction with qualified charitable distributions: irs.gov/publications/p590b.
IRMAA brackets and premiums per CMS 2026 Medicare Parts A & B Fact Sheet. QCD limit per IRS Notice 2025-67. RMD ages per SECURE 2.0 § 107. Values verified as of May 2026.