If you’re taking required minimum distributions (RMDs) from a traditional IRA or 401(k), those withdrawals could be silently inflating your Medicare premiums — sometimes by hundreds of dollars a year. That’s because Medicare uses your income from two years ago to set your premium today, and a large RMD can push you into a higher bracket called IRMAA (Income-Related Monthly Adjustment Amount). The good news: with a little planning, you can reduce the damage — or avoid it altogether.

What exactly is IRMAA, and why does it matter?

IRMAA stands for Income-Related Monthly Adjustment Amount. It’s a surcharge that Medicare adds on top of your standard Part B and Part D premiums when your income exceeds certain thresholds. In 2025, the standard Medicare Part B premium is $185.00 per month. But if your income crosses the first IRMAA threshold — $106,000 for individuals or $212,000 for married couples filing jointly — that monthly premium jumps to $259.00. At the highest income bracket, it can reach $628.90 per month, per person.

The critical detail: Medicare looks at your Modified Adjusted Gross Income (MAGI) from two years prior. So your 2026 Medicare premium is based on your 2024 tax return. A single large RMD in 2024 can follow you into your Medicare bill in 2026.

What are the RMD rules for 2025 and 2026?

Under current law (following the SECURE 2.0 Act), the age at which you must start taking RMDs depends on your birth year. If you were born between 1951 and 1959, your RMD starting age is 73. If you were born in 1960 or later, it’s 75. There is no option to skip or delay these withdrawals once you’ve reached your starting age — the IRS requires them, and failing to take one triggers a 25% penalty on the amount you should have withdrawn (reduced to 10% if you correct the mistake promptly).

For 2025 and 2026, the IRS calculates your RMD by dividing your account balance as of December 31 of the prior year by a life-expectancy factor from its Uniform Lifetime Table. The older you are, the smaller the divisor — which means the larger the percentage you must withdraw. A 75-year-old with a $500,000 IRA, for example, faces an RMD of roughly $21,097 in 2026. That income gets added to Social Security, interest, dividends, and any other earnings when Medicare calculates your IRMAA exposure.

How does Social Security make the IRMAA problem worse?

Here’s where things get compounded — literally. Up to 85% of your Social Security benefit is taxable if your combined income (adjusted gross income + nontaxable interest + half of Social Security) exceeds $34,000 for individuals or $44,000 for couples. That taxable Social Security counts toward the MAGI number Medicare uses for IRMAA.

So consider this scenario: you receive $24,000 a year in Social Security, of which $20,400 is taxable at those income levels. Add a $21,000 RMD, some interest income, and a small pension, and it’s surprisingly easy to clear the first IRMAA threshold — even on what feels like a modest retirement income.

This is exactly why the timing of when you claim Social Security matters so much. Claiming at 62 locks in a permanently reduced benefit and starts that taxable income flowing earlier. Waiting until 70 maximises your monthly benefit (by up to 32% compared to claiming at full retirement age) and can give you more flexibility in your early retirement years to manage your taxable income before Medicare IRMAA becomes a factor.

How do I avoid or reduce Medicare IRMAA surcharges?

You have more control than you might think. Here are the most practical strategies retirees are using right now:

1. Roth conversions in your early 60s. Converting traditional IRA money to a Roth IRA before your RMD age arrives reduces the size of future RMDs — because Roth IRAs have no required minimum distributions during the owner’s lifetime. Yes, you pay tax now, but you reduce the income that will hit Medicare’s radar later. This strategy works best in years when your income is lower than it will be once RMDs kick in.

2. Qualified Charitable Distributions (QCDs). If you’re 70½ or older, you can direct up to $108,000 per year (2026 limit, indexed for inflation) from your IRA directly to a qualified charity. This satisfies your RMD but the amount never touches your taxable income — which means it can’t push you into an IRMAA bracket. If you give to charity anyway, this is one of the most efficient tools in retirement tax planning.

3. Appeal a one-time income spike. If a large RMD or other unusual event temporarily pushed you into a higher IRMAA bracket, you can file Form SSA-44 with Social Security to request a reduction. Medicare allows appeals based on a “life-changing event,” which includes retirement, divorce, or the death of a spouse. A one-time RMD from an inherited account typically does not qualify, but it’s always worth reviewing your situation with a tax adviser.

4. Smooth out your RMDs over time. Rather than letting your IRA grow untouched until 73 or 75, consider taking voluntary withdrawals in your 60s — especially in lower-income years. Spreading the taxable income over more years at lower rates can prevent a single large spike that trips the IRMAA wire.

What should I do right now if I’m approaching RMD age?

Start by pulling your most recent tax return and estimating what your MAGI will look like once RMDs begin. Use the IRS RMD worksheets or a free online calculator to estimate your first required withdrawal. Then check that figure against the current IRMAA thresholds. If you’re close to a bracket boundary, even modest planning — a small Roth conversion, a QCD, or timing a larger expense to offset income — can keep you in a lower Medicare premium tier.

If you’re already taking RMDs, review your strategy every year in the fourth quarter. Your IRA balance changes, the IRMAA thresholds adjust annually for inflation, and your other income sources shift. What worked last year may not be optimal this year.

The connection between your retirement account withdrawals and your Medicare bill is one of the least-discussed money traps in retirement planning — and one of the most expensive to ignore.

Frequently Asked Questions

Frequently Asked Questions

When should I claim Social Security to maximise my benefit?

Claiming Social Security at age 70 delivers the highest possible monthly benefit — up to 32% more than claiming at your full retirement age (66 or 67 depending on your birth year) and significantly more than claiming at 62. Waiting also reduces the number of years your Social Security income is exposed to IRMAA calculations alongside RMDs, giving you more flexibility to manage Medicare costs in your early retirement years.

How much of my Social Security benefit is taxable?

Up to 85% of your Social Security benefit can be subject to federal income tax, depending on your combined income. If your combined income — adjusted gross income plus nontaxable interest plus half of your Social Security — exceeds $34,000 as an individual or $44,000 as a married couple, 85% of your benefit is taxable. Twelve states also tax Social Security income, though many offer exemptions for lower-income retirees.

What are the RMD rules for 2025 and 2026?

Under the SECURE 2.0 Act, the required minimum distribution starting age is 73 for anyone born between 1951 and 1959, and 75 for those born in 1960 or later. You must take your RMD by December 31 each year (your very first RMD can be delayed to April 1 of the following year, but taking two in one year could spike your income). Missing an RMD triggers a 25% penalty on the missed amount.

How do I avoid Medicare IRMAA surcharges?

The most effective strategies include doing Roth IRA conversions before your RMD age to shrink future required withdrawals, using Qualified Charitable Distributions (up to $108,000 in 2026) to satisfy RMDs without adding to taxable income, and smoothing withdrawals across multiple years to avoid income spikes. If a one-time event caused an unusual income jump, you may also appeal your IRMAA surcharge using Form SSA-44.

What is the Medicare Part B premium for 2025?

The standard Medicare Part B premium in 2025 is $185.00 per month. However, if your income exceeds the IRMAA thresholds — starting at $106,000 for individuals or $212,000 for married couples — surcharges are added, pushing the monthly premium to between $259.00 and $628.90 depending on your income bracket. These thresholds are adjusted annually for inflation.