If you’ve planned carefully for retirement, the last thing you want is a surprise bill from Medicare. Yet every year, many retirees are caught off guard by something called IRMAA—and it can make your Medicare premiums much higher than you expected.

What is IRMAA?

IRMAA stands for Income-Related Monthly Adjustment Amount. Simply put, it’s an additional charge added to your Medicare Part B and Part D premiums if your income is above certain thresholds.

It’s not a penalty. It’s the government’s way of saying: “Since you earn more, you’ll pay more.”

Where Does SSA Get the Numbers?

Here’s the important part:

• The Social Security Administration (SSA) doesn’t guess your income.

• They get your information directly from the IRS.

• Specifically, they look at your IRS Form 1040—

  • Line 2a (tax-exempt interest)

  • Line 11 (adjusted gross income, or AGI)

• Together, these numbers form what’s called your Modified Adjusted Gross Income (MAGI).

This means IRMAA can be triggered by more than just wages. Other assets and income sources can push you into higher brackets, including:

• Your Social Security benefit (yours and your spouse’s)

• Required Minimum Distributions (RMDs) from retirement accounts

• Rental income

• Tax-exempt bond interest

• Capital gains

• Other taxable investments

If it shows up on your 1040, chances are SSA is looking at it.

Why It Catches People Off Guard

Many people assume IRMAA only affects the very wealthy. But that’s not true. Selling property, taking RMDs, or even having a strong investment year can bump you into a higher income tier—sometimes for just one year—and suddenly your Medicare costs go up.

The Good News

If your income has recently gone down because of retirement, job loss, divorce, or another life-changing event, you may be able to appeal IRMAA. But you need to know the rules and act quickly.

You Don’t Have to Figure This Out Alone

Understanding how IRMAA works can feel overwhelming, especially when tax law, Medicare, and retirement planning all overlap. That’s where we come in.

At Mere Benefits, we help you:

• Understand how your income impacts Medicare premiums.

• Identify strategies to reduce or avoid unnecessary IRMAA charges.

• Explore your Social Security options (as a Registered Social Security Analyst®, Kate can guide you through optimizing benefits alongside Medicare decisions).

Next Step: If you’ve already received a notice about higher Medicare premiums, don’t panic—you may qualify to appeal your IRMAA decision. Learn how in our Appealing IRMAA Premiums Guide.

Want a deeper look at how IRMAA fits into your overall Medicare planning? Visit our IRMAA & Medicare page.

👉 The bottom line: IRMAA is real, it’s based on your IRS 1040, and it can significantly affect your retirement budget. But with the right guidance, you can make smart moves to minimize surprises.

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