One Dollar of Income Can Cost a Retired Couple $2,297. It Is Called IRMAA.

Frank is 67, retired last year, and about to make a sensible-looking move that could cost him more than $2,000. He wants to sell a stale mutual fund and tidy up his portfolio, and the sale will push his income for the year a few hundred dollars past a line he has never heard of. As of 2026, that line is $109,000 of modified adjusted gross income for a single filer, and crossing it does not nudge his Medicare premium up gently. It detonates it.

(Frank is a composite. The story is illustrative. The math is real and typical.)

IRMAA is a cliff, not a ramp

Most income-based costs phase in. Earn a bit more, pay a bit more. IRMAA, the income-related monthly adjustment amount added to Medicare Part B and Part D premiums, does not work that way. It is a series of cliffs. Below a threshold you pay nothing extra. One dollar above it, you pay the entire surcharge for that tier, on every month of the year.

For 2026, the standard Part B premium is $202.90 a month. The moment a single filer's income crosses $109,000, that premium jumps by $81.20 a month to $284.10, and a Part D surcharge of $14.50 a month stacks on top. There is no partial credit for landing one dollar over instead of ten thousand. The cliff treats both the same.

The detonating number

Here is the piece in one line. For a married couple both on Medicare, crossing the first IRMAA threshold of $218,000 by a single dollar adds about $2,297 a year in combined Part B and Part D surcharges, roughly $1,148 per spouse. One dollar of income, about $2,297 of cost.

The cruelty is in the asymmetry. Frank does not get a warning bell at $108,999. He gets a letter from Social Security months later telling him what his portfolio cleanup cost him, by which time the income year is closed and the bill is fixed.

Why the surcharge arrives two years late

The second trap is timing. IRMAA is based on your income from two years prior. Your 2026 surcharge is set by your 2024 tax return. That two-year lookback is exactly what makes IRMAA both dangerous and, handled right, beatable.

Dangerous, because a one-time income spike echoes forward. A large Roth conversion, a capital gain from selling a property, or a big retirement account withdrawal in one year can trigger a surcharge two years later, long after the cash is spent and the decision is forgotten. There is also a quiet add-back that catches people: the income IRMAA counts includes tax-exempt interest, so the municipal bond income many retirees assume is invisible is fully visible to this calculation.

Beatable, because two years is plenty of warning if you are looking. Every income decision Frank makes in 2026 is really a decision about his 2028 Medicare premium, which means he can see the cliff coming and steer around it. The retirees who get hurt are not the ones with high income. They are the ones who did not know the line was there.

Why careful retirees walk off the edge

The people most exposed to IRMAA are often the most diligent. They do the responsible things, harvest a gain, convert to a Roth, rebalance, sell the rental, and each move makes sense on its own. None of those moves carries a label warning that it might shove income across an invisible Medicare line two years out. Diligence without a map walks right off the cliff. The fix is not to earn less. It is to know where the lines sit and to size the diligent moves to stop just short of them.

How to keep one dollar from costing thousands

• Know your thresholds before you transact, because the entire cost is decided by which side of a known line your income lands on.
• Size income moves to the cliff, not over it, since stopping a Roth conversion or a gain just below a threshold preserves almost all the benefit and avoids the full surcharge.
• Plan two years ahead, because the income you create this year sets the premium you pay two years from now, and that lead time is the whole opportunity.
• Appeal a one-time spike, since the SSA lets you file Form SSA-44 after a life-changing event like retirement, and a legitimate appeal can erase a surcharge triggered by income you no longer earn.

Frank can still clean up his portfolio. He just needs to know that the sale is not only a portfolio decision, it is a Medicare decision, and that landing one dollar on the wrong side of a line he had never heard of would cost him about $2,297. The line is fixed and public. Whether he crosses it is entirely his to manage.

---

Frank is a composite character used to illustrate typical math. His age and income are hypothetical; the 2026 IRMAA thresholds, premiums, surcharge amounts, and appeal process are real as of June 2026. IRMAA interacts with your full tax picture, and thresholds change annually. This article is educational and is not financial, tax, or Medicare-enrollment advice.

Related reading: how Roth conversions interact with IRMAA and the retirement planning tools we track.