Beating the IRMAA Trap

Jun 23

Keep More of Your Medicare Check

If you’re approaching Medicare age and have a healthy income, IRMAA might be lurking in your future—and it’s not the name of your new neighbor. It stands for Income-Related Monthly Adjustment Amount, and for many retirees, it’s an unwelcome surprise that eats into Social Security checks and Medicare budgets alike.

Let’s break it down.

What Is IRMAA, Anyway?

IRMAA is basically a penalty for doing well. If your modified adjusted gross income (MAGI) from two years ago crosses a certain line, your Medicare Part B and Part D premiums jump—sometimes by hundreds of dollars per month. See 2025 Medicare Costs.

For 2025, that means the IRS is peeking back at your 2023 return. File single or head of household and made under $106,000 in 2023? You’re in the clear. Married filing jointly and made less than $212,000? Same. But once you cross those thresholds, things scale up fast.

For example:

A single person who made between $133K–$167K in 2023 will pay $185 per month for Medicare Part B and $35.30 more for Part D in 2025.
Made $500K+? That jumps to $591.90 for Part B and $78.60 more for Part D—per month.

Why This Matters

“Nothing makes a client more upset than when they find out their Social Security check is going to drop $185 per month,” said CPA Larry Pon. And let’s be honest: He’s right.

IRMAA is one of those avoidable financial bruises—if you plan ahead.

How to Fight Back (Legally and Smartly)

Let’s say your income dipped after a big life change—maybe you retired, lost a spouse, or stopped working. You can appeal IRMAA using Form SSA-44, showing proof that your income is now lower. Social Security might grant you relief.

But here’s the real secret: Plan ahead. Way ahead.

Start IRMAA-proofing your retirement before you hit age 65.

Some strategies:

Strategic Roth conversions. Convert traditional IRA dollars to Roth IRA before age 63. It raises your income now but reduces it later—so you can draw tax-free later without triggering IRMAA.
Tap savings first. Delay Social Security or investment withdrawals in the first couple of retirement years, using cash or other sources instead.
Avoid one-time income spikes. Selling a business, exercising stock options, or taking large payouts? Spread that income over two tax years if possible.
Donate your RMDs. If you don’t need the Required Minimum Distribution, send it straight to a charity via a Qualified Charitable Distribution (QCD). It satisfies the RMD but doesn’t count toward income.
Harvest tax losses. If you’ve got gains, match them with losses. This can reduce your capital gains and help lower MAGI.

What doesn’t count toward IRMAA:

Roth IRA withdrawals
Health Savings Account distributions
Reverse mortgage income
Life insurance loans

What does count:

Municipal bond interest (yes, even though it’s “tax-free”)
Savings bond interest used for education
Income earned abroad
Deferred comp lump sums

The Bottom Line

IRMAA is avoidable—but only if you take action early. Work with your advisor, map out your income sources, and time big financial moves with precision. Most importantly, don’t let a government formula control how much you take home in retirement.

Stay sharp. Stay strategic. And remember: The more you understand the tax code, the better you can use it to your advantage—not the other way around.

**Source: https://www.medicare.gov/publications/11579-medicare-costs.pdf