Definition
What is IRMAA?
IRMAA — the Income-Related Monthly Adjustment Amount — is a surcharge added to Medicare Part B and Part D premiums for beneficiaries whose income exceeds certain thresholds. It is based on your modified adjusted gross income from two years earlier, so a single high-income year can raise your Medicare premiums later.
Because IRMAA uses a two-year lookback, income events in your early sixties — a Roth conversion, a business sale, a large capital gain — can quietly inflate your Medicare costs once you enroll.
Managing income around the IRMAA thresholds is a core part of retirement tax planning. Getting it right can save a household thousands of dollars a year in premiums.
Related terms
This definition is for educational purposes only and does not constitute investment, tax, or legal advice. Rules and thresholds change; consult a qualified professional about your situation.