Most people think Medicare is simple—you hit 65, sign up, and start enjoying the coverage you paid into for decades. But there’s a sneaky surprise waiting for many retirees: a quiet, creeping “tax” that can increase your Medicare premiums without warning.
It’s called the Income-Related Monthly Adjustment Amount, or IRMAA—and it has nothing to do with your health and everything to do with your income.
At Mendel Money Management, we often call it the hidden Medicare tax trap because it catches so many retirees off guard. Fortunately, a little foresight and thoughtful planning can help you avoid paying more than you need to.
What Is IRMAA—and Why Does It Matter?
IRMAA is an income-based surcharge added to your Medicare Part B (medical insurance) and Part D (prescription drug coverage) premiums.
Here’s how it works: the higher your income, the higher your premiums. And the calculation is based on your modified adjusted gross income (MAGI) from two years ago.
That means the choices you make today—like when to start Social Security, how much to withdraw from your IRA, or whether to complete a Roth conversion—could determine your Medicare costs two years down the line.
For 2025, IRMAA surcharges begin when your income exceeds:
- $106,000 (single filers)
- $212,000 (married couples filing jointly)
If your income crosses those thresholds, your monthly Part B premium can rise by as much as $443.90 per person, and your Part D plan can cost an additional $85.80 per month.
Those aren’t small numbers—especially when multiplied over the course of a long retirement.
The Emotional Toll of “Stealth” Costs
For many retirees, these surcharges feel deeply unfair. After a lifetime of working, saving, and planning responsibly, the idea that Medicare can suddenly cost hundreds more each month can be frustrating—or even anxiety-inducing.
We often hear clients say, “I thought I did everything right—how did I miss this?”
The truth is, IRMAA isn’t about mistakes—it’s about awareness. It’s one of those fine-print realities of retirement planning that’s easy to overlook until it shows up on your Social Security statement.
At Mendel Money, our goal isn’t just to help you avoid higher premiums. It’s to help you feel in control—to replace uncertainty with confidence and to make sure every financial move you make has intention behind it.
Smart Ways to Minimize or Avoid IRMAA
Avoiding IRMAA isn’t about extreme changes—it’s about timing and coordination. Here are a few strategies that can make a real difference.
1. Thoughtful Roth Conversions
Roth conversions can be a powerful way to control future taxable income. By converting a portion of your pre-tax retirement savings to Roth accounts, you pay taxes on those funds now—at known rates—and avoid future required minimum distributions (RMDs) that could push you into a higher IRMAA bracket later.
Beginning in 2025, individuals aged 60–63 can contribute an additional $11,250 in “super catch-up” contributions to their workplace retirement plan. Starting in 2026, those earning $145,000 or more must direct these catch-up contributions to a Roth account.
This strategy takes careful coordination, since a conversion increases your taxable income in the year it’s done. The key is balancing short-term tax cost with long-term savings and peace of mind.
2. Strategic Use of Pre-Tax Contributions
If you’re still working in your 60s, contributing to a traditional 401(k) or IRA can help reduce your taxable income today—possibly keeping you under IRMAA thresholds two years from now.
The tradeoff? You’ll need a plan for managing those deferred taxes later, when required minimum distributions (RMDs) begin—generally at age 73, per the SECURE 2.0 Act. At Mendel Money, we often help clients model multiple scenarios to find the right balance between immediate relief and future flexibility.
3. Timing Social Security Benefits
Delaying Social Security benefits can help smooth out your income curve. By waiting until full retirement age—or even later—you can draw from your retirement accounts strategically before Medicare kicks in, reducing the risk of IRMAA surcharges when you do enroll.
Waiting until age 70 can also boost your benefit amount by up to 8% per year beyond full retirement age.
This also helps keep your taxable income lower during the crucial “gap years” between leaving work and taking Social Security.
A Real-Life Example
Consider Jane and Robert, both recently retired. They’ve built a solid nest egg and planned to start Social Security and Medicare at the same time. But after reviewing their income sources, we discovered that doing both in the same year would bump them just over the IRMAA threshold—adding more than $2,000 in unnecessary Medicare surcharges for the year.
Instead, we delayed their Social Security by one year, drew modestly from their brokerage account, and avoided the IRMAA trigger completely.
The result? They saved thousands—and gained peace of mind knowing they were in control of their income plan.
Why IRMAA Planning Matters
What’s most important about IRMAA planning isn’t the surcharge itself—it’s what it represents: the power of proactive financial decision-making.
By thinking ahead, you can align your tax strategy, withdrawal schedule, and Medicare timeline to protect your income and your lifestyle.
And when those pieces work together, the impact is bigger than just saving money. It’s the relief of knowing that the income you worked for—your legacy, your freedom—stays with you instead of disappearing into higher premiums.
That kind of confidence doesn’t come from a single tactic. It comes from a plan built around your entire financial picture.
Let’s Bring It All Together
Medicare IRMAA surcharges aren’t a penalty—they’re a signal. They tell us where income and timing need better coordination.
At Mendel Money Management, we help clients translate that signal into action—so instead of reacting to surprise costs, you’re anticipating them and steering around them.
Our PersonalPath process looks at every layer of your retirement income plan—Roth conversions, withdrawals, investments, Social Security, and taxes—to help you avoid traps like IRMAA and keep your money aligned with your goals.
Work with Us
If you’re approaching Medicare age or already enrolled, now is the perfect time to assess whether IRMAA could impact you.
A few strategic adjustments today can save you thousands later—and more importantly, give you peace of mind that your retirement plan is working for you, not against you.
👉 Schedule your PersonalPath Intro Call to see how proactive planning can help you keep more of what you’ve earned—and enjoy the retirement you’ve envisioned.
Because at Mendel Money Management, financial clarity is more than strategy—it’s confidence, comfort, and control over your future.
Disclosure
The views expressed represent the opinions of Mendel Money Management as of the date noted and are subject to change. These views are not intended as a forecast, a guarantee of future results, investment recommendation, or an offer to buy or sell any securities. The information provided is of a general nature and should not be construed as investment advice or to provide any investment, tax, financial or legal advice or service to any person. The information contained has been compiled from sources deemed reliable, yet accuracy is not guaranteed.
Diversification and asset allocation do not ensure a profit or guarantee against loss. Additional information, including management fees and expenses, is provided on our Form ADV Part 2 available upon request or at the SEC’s Investment Adviser Public Disclosure website at www.adviserinfo.sec.gov. Past performance is not a guarantee of future results.
Sources & Citations
- Centers for Medicare & Medicaid Services (CMS) – 2025 Income-Related Monthly Adjustment Amount (IRMAA) thresholds and premium tables.
https://www.cms.gov/medicare/medicare-part-b-premiums/income-related-monthly-adjustment-amounts - Internal Revenue Service (IRS) – Catch-up contribution limits and Roth requirement for high earners beginning in 2026.
IRS News Release IR-2023-155 (August 25, 2023).
https://www.irs.gov/newsroom/retirement-plan-catch-up-contributions-must-be-roth-for-high-earners-starting-in-2026 - IRS Publication 590-A – Rules for traditional and Roth IRA contributions, including deductible limits and income phaseouts.
https://www.irs.gov/publications/p590a - SECURE 2.0 Act (H.R. 2617, 117th Congress) – Increase in Required Minimum Distribution (RMD) age to 73 beginning in 2023.
https://www.congress.gov/bill/117th-congress/house-bill/2617 - Social Security Administration (SSA) – Guidance on delaying retirement benefits and 8% annual delayed retirement credits up to age 70.
https://www.ssa.gov/benefits/retirement/planner/delayret.html
