Key Takeaways
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The Income-Related Monthly Adjustment Amount (IRMAA) in 2025 affects your Medicare Part B and Part D premiums if your income exceeds certain thresholds.
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Even a one-time income spike—like from selling property or taking large retirement withdrawals—can trigger IRMAA for an entire year unless you appeal.
What Is IRMAA and Why It Exists
The Income-Related Monthly Adjustment Amount (IRMAA) is a surcharge added to your standard Medicare Part B and Part D premiums. It only affects you if your income is above a certain level. The rationale behind IRMAA is to have higher-income beneficiaries contribute more toward the cost of Medicare.
For 2025, the standard monthly premium for Medicare Part B is $185, but if you’re subject to IRMAA, you pay more than that. Similarly, your Part D premiums will also increase.
How Medicare Determines Your IRMAA
Medicare doesn’t calculate IRMAA directly. Instead, the Social Security Administration (SSA) uses your tax return from two years prior to decide. That means your 2023 income determines your IRMAA status for 2025.
Income Types That Count:
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Wages
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Social Security benefits
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Capital gains
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Rental income
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Pensions
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Required Minimum Distributions (RMDs)
The SSA uses your Modified Adjusted Gross Income (MAGI), which is your adjusted gross income (AGI) plus tax-exempt interest. This total determines whether you owe the surcharge.
2025 IRMAA Income Thresholds
For 2025, if your 2023 MAGI was above the following limits, you will pay higher premiums:
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Individuals: Over $106,000
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Married couples filing jointly: Over $212,000
There are several income brackets above these thresholds, and each one adds a greater surcharge to your monthly premiums.
How Much More You Could Pay
The exact amount depends on which bracket you fall into. The IRMAA surcharge is layered, meaning the more you earn above the threshold, the more you pay. While we won’t mention specific private plan costs, here’s what you need to know:
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Your Part B premium could increase significantly above the $185 standard rate.
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Your Part D plan premium will also be subject to an additional amount, regardless of which plan you choose.
These extra charges apply monthly and last for a full calendar year.
IRMAA Applies Even If You Didn’t Mean to Trigger It
One of the most frustrating parts of IRMAA is how easy it is to trigger it—sometimes without even realizing it.
You might have:
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Taken a large distribution from a retirement account.
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Sold a home or stock at a gain.
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Received a big one-time bonus or severance package.
Even if these income boosts happened once, they can affect your IRMAA for the whole year.
When IRMAA Gets Recalculated
You aren’t locked into the surcharge forever. Your IRMAA is recalculated every year based on your income from two years prior.
So, if your 2024 income drops below the threshold, your 2026 Medicare premiums could go down. However, you’ll still pay the 2025 surcharge if your 2023 income was high.
Life-Changing Events That Let You Appeal
The SSA allows you to request a new determination if you’ve experienced a qualifying life-changing event that reduced your income. Some common examples include:
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Retirement or work reduction
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Divorce or annulment
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Death of a spouse
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Loss of pension income
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Loss of income-producing property
You’ll need to complete Form SSA-44 and provide documentation to support your appeal. If successful, your IRMAA could be adjusted downward or eliminated.
How to Appeal IRMAA
You can appeal your IRMAA determination by contacting the Social Security Administration directly. Here’s how:
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Complete and submit Form SSA-44
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Provide proof of the life-changing event (e.g., retirement letter, death certificate)
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Submit updated tax information if available
If your appeal is accepted, your IRMAA could be recalculated to reflect your new, lower income.
Strategic Planning Can Help You Avoid IRMAA
Proper financial planning can go a long way in helping you stay under IRMAA thresholds. Here are a few strategies you might consider:
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Roth Conversions: Consider doing smaller Roth conversions over several years to manage taxable income.
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Withdrawals Before Medicare: Take distributions from retirement accounts before age 65 to lower your MAGI in Medicare years.
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Tax-Loss Harvesting: Offset gains by selling underperforming investments.
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Charitable Donations: Use Qualified Charitable Distributions (QCDs) from IRAs to reduce taxable income without affecting MAGI.
Talk with a financial advisor or tax professional who understands how IRMAA works to better plan your income.
IRMAA and Married Couples
Filing jointly as a married couple means your combined income is used to determine the surcharge. This can lead to surprises if only one spouse earns the majority of income or if a large one-time income event affects both parties.
Additionally, if one spouse dies, the surviving spouse might face higher IRMAA charges as a single filer unless an appeal is made.
Annual Notification and Timeline
You typically receive your IRMAA determination letter from the SSA in the last quarter of the year—usually in October or November—based on your latest tax data available. If you don’t agree with it, you should:
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File an appeal promptly (preferably before the new premium takes effect in January)
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Review your 2023 tax return for any possible issues or misreported income
SSA uses IRS data, but mistakes can occur. Always check the information for accuracy.
IRMAA and Part D: What You Need to Know
IRMAA also affects your Part D prescription drug coverage. Regardless of which drug plan you enroll in, if your income exceeds the set limits, you will owe a surcharge.
This surcharge is not paid directly to the plan provider. Instead, it’s withheld from your Social Security check or paid directly to Medicare if you aren’t receiving benefits yet.
If you fail to pay this surcharge, your drug plan can be terminated—even if you pay your base plan premium on time.
IRMAA Doesn’t Affect Everyone—But It’s Growing
As income thresholds only increase slightly year over year, more people are falling into IRMAA brackets due to cost-of-living adjustments, inflation, and increasing retirement income.
This is especially true for those:
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Selling property
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Living off large IRA withdrawals
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Receiving deferred compensation or bonuses
Even if you weren’t affected in previous years, 2025 could be the first time you face the surcharge.
Your Medicare Premiums Are Not Set in Stone
It’s important to remember that just because you’re facing IRMAA now doesn’t mean you will next year. With proper planning and timely appeals, you can reduce or eliminate future surcharges.
The key is staying informed about how your income affects your Medicare costs and making strategic choices ahead of time.
Avoid Unwanted Surprises in Your Premiums
Whether you’re enrolling in Medicare for the first time or have been a beneficiary for years, it’s essential to understand IRMAA and how it could impact your budget.
Take time to review your:
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Tax returns
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Income sources
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Retirement account withdrawals
If your income might trigger IRMAA or already has, it’s worth speaking with a licensed agent listed on this website. They can walk you through what steps to take and what documents to prepare for a possible appeal.
