Medicare IRMAA Yearly Changes

Medicare Part B will see an increase from 2024. The standard monthly premium for Medicare Part B 2025 standard monthly premium is $185, increased from $174.70. The 2025 Medicare part D monthly premium will see a decrease in the monthly premium to 46.50 in 2025 from $53.95 in 2024.

IRMAA Surcharge Income Levels

In 2025, whether or not you have to pay IRMAA is determined by your reported annual income for 2024.

Whether or not you have to pay IRMAA is partially determined by your tax filing status. A modified adjusted gross income in 2022 of $103,000 or higher (for single filers) or $206,000 or higher (for married filers) will result in a Part B surcharge between $74 to $628.9 per month in addition to the regular Part B premium (see below chart).

Part D (prescription drug coverage) also penalizes high-income beneficiaries. The IRMAA monthly premium surcharge on Part D can range from $13.30 to $83.50 in addition to the standard Part D premium.

Sources of Temporary Income Increases That Could Subject You to IRMAA

While avoiding having to pay IRMAA is not always possible for higher-income retirees, some common one-off situations can bump up your income for a year to be aware of and consider in advance. These include:

Selling a home

Selling your home could lead to higher Medicare Part B premiums if your taxable income sees a boost. Although your Medicare benefits shouldn’t change when you sell your home, your monthly premiums may. It depends on whether the sale of your home affects your income.

Taking a required minimum distribution (RMD)

A bump in your income can negatively affect the availability of deductions and impact the taxation of Social Security. One significant negative impact of an RMD may be increased Medicare costs. This is often not paid the attention it deserves by many IRA owners until it is too late. (IRA Help)

Converting traditional IRA assets to a Roth IRA

A Roth conversion occurs when you move assets from a Traditional, SEP, or SIMPLE IRA (collectively referred to as a Traditional IRA in this article) or qualified employer-sponsored retirement plan (QRP) — such as a 401(k), 403(b), or governmental 457(b) — and reposition them to a Roth IRA. (Wells Fargo)

Realizing a large investment or capital gain

When you sell investments at a higher price than what you paid for them, the capital gains are “realized,” and you’ll owe taxes on the amount of the profit. (Vanguard)

Winning the lottery (yes, it’s true!)

You’re more likely to play the lottery when you’re young. Approximately 70% of 20-30-year-olds buy at least one lottery ticket yearly. Compared to 45% of seniors age 70 or older. (CreditDonkey)

Strategies to Avoid Medicare IRMAA

• When planning on doing a Roth IRA conversion, plan it carefully, as it will increase your taxable income. 
• If you invest in municipal bonds (which can be a great source of tax-exempt income), be aware that that interest can affect your Medicare premiums 
• If a higher-income retiree is a category you fall into and have had a life-changing event, notify Social Security by filing an IRMAA appeal. 
• Planning to sell any appreciated assets (including real estate)? Know what your options are to minimize your taxable income. 
• Consider opening a Medicare Savings Account (MSA) if you meet eligibility requirements.
• Understand how taking annual required minimum distributions (RMDs) from your retirement accounts might affect your taxable income.
• Consider making a qualified charitable donation (QCD) to reduce your tax liability.  

Read more: Three Ways to Reduce Your Income-Related Monthly Adjustment Amount (IRMAA) for Medicare Part B

The good news is that if your income decreases, so will your Medicare IRMAA, albeit with a two-year delay. 

Looking for more ideas to avoid paying IRMAA? Click here to schedule a free, no-obligation consultation and review of your financial plan using our Results In Advance Planning method with one of our advisors.