IRMAA Calculator 2026: Medicare Surcharge Planning for UHNW Families

Not financial or tax advice. 2026 IRMAA figures per CMS official release, as reported by Kiplinger. Consult a qualified advisor before making income-planning decisions.

IRMAA (Income-Related Monthly Adjustment Amount) is a Medicare surcharge on top of the standard Part B and Part D premiums, assessed when your MAGI exceeds certain thresholds. For UHNW families, IRMAA is nearly unavoidable — but the magnitude varies enormously. A couple at the top tier pays $13,872 per year more than a couple at the standard tier. That's a real cost worth managing.

The surcharge is based on your MAGI from two years prior: your 2024 income determines your 2026 Medicare premiums. Your 2026 income determines your 2028 premiums. This 2-year lookback is the lever: if you can reduce MAGI in a future year, you reduce premiums two years out.

IRMAA Surcharge Calculator

2026 IRMAA Brackets

IRMAA uses your MAGI from two years prior, adjusted for inflation annually (except the Tier 5 threshold, frozen until 2028).¹

Source: CMS 2026 Medicare Part B premiums, per Kiplinger.¹ Values apply to beneficiaries who file taxes. Married Filing Separately uses single-filer thresholds except for a narrow exception below $109K MAGI.

Why IRMAA Hits UHNW Families Hard

At $30M+, most families are in Tier 4 or Tier 5 without any income-timing decisions. Three sources of MAGI dominate:

• Required Minimum Distributions (RMDs). A $3M traditional IRA at age 73 produces a ~$117,000 RMD. A $5M IRA produces ~$195,000. Combined with investment income, most UHNW families blow past Tier 5 before any discretionary income.
• Capital gains and dividends. Portfolio income from a $30M+ taxable account — dividends, interest, capital gain distributions — flows directly into MAGI.
• Business income and Roth conversions. A $500K Roth conversion or large K-1 from a pass-through can push MAGI far above the $750K MFJ Tier 5 ceiling in a single year.

The key insight: IRMAA surcharges apply per-person. A couple with both spouses on Medicare pays double the per-person surcharge. At Tier 5, that's $487/mo + $91/mo = $578/mo × 2 people = $1,156/mo = $13,872/year in IRMAA surcharges alone, every year, indefinitely.

The Cliff Problem

IRMAA operates as a cliff, not a phase-out. One dollar above a threshold triggers the full higher surcharge for the entire year. The steepest cliff is between Tier 1 and Tier 2:

• At $274,000 MFJ MAGI: Tier 1 — Part B $284.10/person/mo
• At $274,001 MFJ MAGI: Tier 2 — Part B $405.80/person/mo
• Extra cost for crossing that line: $121.70/mo × 2 × 12 = $2,921/year for a couple

The surcharge lasts the entire calendar year. If your 2024 MAGI is $275,000, you pay Tier 2 premiums all of 2026, even if one big income event in December drove you over.

5 Strategies to Reduce IRMAA

1. Roth Conversions During the Pre-RMD Window

Between retirement (say, age 62) and RMD start age (73 for those born 1951–1959; 75 for those born 1960+), UHNW families often have lower MAGI than they will once RMDs begin. This window is the prime time to convert traditional IRA/401(k) balances to Roth. Conversions increase 2-years-out IRMAA premiums — but they permanently reduce future RMDs, which reduces MAGI for every subsequent year after age 73.

The math: a $1M Roth conversion at age 68 adds ~$37K–$40K in federal tax, but eliminates ~$130–160K/year in RMDs starting at 73, reducing MAGI permanently. If that keeps a couple in Tier 2 instead of Tier 5, the IRMAA savings are $5,016/year every year on Medicare — a payback under 10 years at a typical discount rate.

→ Model your Roth conversion with our calculator, which includes IRMAA cliff detection.

2. Qualified Charitable Distributions (QCDs)

If you're 70½ or older, you can direct up to $111,000 per person per year (2026 limit) from your IRA directly to a qualified charity as a QCD.³ The QCD satisfies your RMD but is excluded from MAGI entirely — it doesn't show up as income on your tax return. For a couple with significant RMDs, using $111,000 + $111,000 = $222,000 in QCDs can drop MAGI by $222,000, potentially moving from Tier 5 to Tier 3.

3. Donor-Advised Fund (DAF) Bunching

Unlike direct charitable deductions, DAF contributions reduce your AGI (and MAGI) in the year of contribution. If you plan to give $100K over five years, contributing $500K to a DAF in a single year — during a high-MAGI year from a liquidity event — reduces that year's MAGI by $500K. Since that year's MAGI affects your IRMAA two years out, the timing matters.

→ Charitable bunching and DAF strategy guide

4. MAGI Management Through Income Timing

Not all income is unavoidable. Strategies that shift or reduce MAGI include:

• Delay Roth conversions to years with lower MAGI. A year with large capital losses or a business deduction may be the ideal conversion window.
• Harvest capital losses to offset capital gains — reducing MAGI without a cash cost, using direct indexing or tax-loss harvesting at scale.
• Municipal bond income is excluded from federal MAGI. Shifting taxable bond income to munis reduces MAGI and IRMAA exposure (while also avoiding NIIT).
• Securities-based lending (pledged asset lines) allows you to fund spending without selling appreciated assets — no capital gain, no MAGI increase. See the buy-borrow-die strategy.

5. IRMAA Appeal for Life-Changing Events

If you had a significant income drop due to a life-changing event — retirement, divorce, death of spouse, work stoppage, or loss of income-producing property — you can request a reduction in your IRMAA assessment using SSA Form SSA-44.⁴ The SSA can use a more recent year's income if the life-changing event reduces your income materially. Common uses:

• Retired in 2024, so 2022 income no longer reflects your situation
• Spouse passed away, now filing single but last year's MFJ income is driving a higher tier
• Large one-time capital gain in a prior year (business sale, real estate) that won't recur

IRMAA Planning Timeline

Because IRMAA uses a 2-year lookback, the planning horizon is two years ahead. Here's how to think about it in practice:

The year-end window is critical: actions before December 31 of the income year affect IRMAA two years out. Actions taken in January (e.g., filing SSA-44 after the fact) can only appeal on the basis of a life-changing event, not proactive planning.

→ 2026 year-end tax planning checklist for UHNW families

UHNW Context: Can You Eliminate IRMAA?

For most UHNW families with $30M+, fully eliminating IRMAA is unlikely once RMDs begin — the investment income alone from a $30M portfolio typically keeps MAGI above the Tier 3 or Tier 4 threshold. The realistic goal is tier management: staying within the tier you're already in, and avoiding unnecessary crossings caused by discretionary income events (Roth conversions, asset sales, income bunching).

Specific situations where significant IRMAA reduction is achievable:

• Pre-RMD years (before 73/75): UHNW retirees who live off taxable portfolio income and haven't started RMDs may have more control over MAGI than they realize. Aggressive Roth conversion in this window can permanently reduce future MAGI.
• After a large-gain year: A business sale or real estate exit may spike MAGI into Tier 5 for one or two years. Knowing this is temporary — and filing SSA-44 if circumstances changed — limits the damage.
• QCD-heavy charitable families: High-RMD retirees who are charitably inclined can use QCDs to remove $222K/year (couple) from MAGI entirely, potentially dropping 1–2 tiers.

A fee-only advisor specializing in UHNW planning coordinates IRMAA management across the full picture: Roth conversion sizing, QCD planning, asset location, and income smoothing.

Sources

1. Kiplinger: Medicare Premiums 2026 — IRMAA Brackets and Surcharges for Parts B and D — 2026 Part B and Part D IRMAA surcharges per CMS official release; all tier thresholds and per-person monthly premiums.
2. SSA POMS HI 01101.020: IRMAA Sliding Scale Tables — Social Security Administration's official IRMAA sliding scale tables, updated December 2025, confirming tier thresholds and Part B/D surcharge structure.
3. IRS: Qualified Charitable Distributions for 2026 — QCD limit $111,000 per person for 2026; excluded from gross income and counts toward RMD; available age 70½+.
4. SSA Form SSA-44: Medicare Income-Related Monthly Adjustment Amount — Life-Changing Event — appeal form for requesting IRMAA recalculation based on more recent income data following a qualifying life-changing event.
5. CMS: Medicare Part B Costs — official CMS page for 2026 Part B premium; confirms $202.90 standard monthly premium.

IRMAA bracket values verified June 2026 against CMS 2026 official release and SSA POMS. Values shown are for 2026 Medicare premiums (based on 2024 MAGI). Surcharges are per-person per month.