If you’re on Medicare and have a higher income, you may have heard the term IRMAA and wondered what it means. IRMAA stands for Income-Related Monthly Adjustment Amount, and it’s an additional amount some people pay on top of their standard Medicare premiums.
IRMAA applies to Medicare Part B (medical coverage) and Part D (prescription drug coverage). It’s not a separate plan or penalty. It’s simply an income-based adjustment required by Medicare. The Social Security Administration determines whether IRMAA applies to you by reviewing your tax return from two years ago. For example, your 2026 Medicare premiums are based on your 2024 income.
If your income exceeds certain thresholds, you may pay higher monthly premiums. IRMAA is based on modified adjusted gross income (MAGI) and includes income from wages, investments, retirement distributions, and other taxable sources. Even people who feel “retired” can be surprised by IRMAA due to one-time events like selling property, large IRA withdrawals, or capital gains.
The good news is that IRMAA is not permanent. If your income has gone down due to a life-changing event such as retirement, divorce, death of a spouse, or reduced work hours, you can request a review and potentially lower or remove the adjustment.
Understanding IRMAA ahead of time can help you plan smarter, avoid surprises, and make informed decisions about income and Medicare costs. If you’ve received an IRMAA notice or want help understanding how it applies to you, we’re here to help walk you through your options.
