Basics
IRMAA vs tax brackets: why a cliff is different
With income tax, moving into a higher bracket only raises the tax on the dollars above the line, so a little extra income always leaves you better off. IRMAA is a cliff: one dollar over a limit raises your Medicare premium by the full difference between tiers for the whole year. Near a limit, earning or converting a bit more can cost you more than it brings in.
How tax brackets really work
A common worry is that a raise will "push you into a higher bracket" and leave you with less. With federal income tax, that never happens. Brackets are marginal: if the 22% bracket ends and the 24% bracket begins at a certain income, only the dollars above that point are taxed at 24%. Earning one dollar more costs you 24 cents of tax, and you keep 76 cents. Your total tax rises smoothly.
How IRMAA works instead
IRMAA has no gradual slope. Each tier has a single premium, and Social Security applies the premium of whatever tier your modified adjusted gross income lands in. At $109,000 of MAGI on an individual return in 2026, you pay the standard premium. At $109,001, you pay the tier-one premium on every month of the year. The step is the same whether you are one dollar over or $27,999 over.
The cost of one dollar over each limit
This table shows what the first dollar above each 2026 limit costs in yearly Part B premiums plus the Part D surcharge.
| Limit crossed | Individual return | Joint return, both on Medicare |
|---|---|---|
| Standard → tier 1 ($109,000 / $218,000) | $1,148.40 | $2,296.80 |
| Tier 1 → tier 2 ($137,000 / $274,000) | $1,736.40 | $3,472.80 |
| Tier 2 → tier 3 ($171,000 / $342,000) | $1,735.20 | $3,470.40 |
| Tier 3 → tier 4 ($205,000 / $410,000) | $1,735.20 | $3,470.40 |
| Tier 4 → tier 5 ($499,999 / $749,999) | $580.80 | $1,161.60 |
Compare that with income tax on the same dollar: at most 37 cents. A single extra dollar of MAGI near an IRMAA limit can cost more than a thousand dollars, which is why the distance to the next limit matters more than your bracket.
The "effective rate" near a cliff
Another way to see the cliff is as an effective marginal rate on a slice of income. Suppose a single filer at $108,000 of MAGI is considering a $3,000 Roth conversion. It takes her to $111,000, $2,000 over the first limit, and costs $1,148.40 in extra premiums two years later. On that $3,000 slice, IRMAA alone works out to an extra 38%, on top of her income tax. Had the conversion been $1,000, the IRMAA cost would be zero. Had it been $29,000, the same $1,148.40 would add only about 4% to the slice.
| Extra income | New MAGI | Extra IRMAA per year | IRMAA as % of the extra income |
|---|---|---|---|
| $1,000 | $109,000 | $0 | 0% |
| $3,000 | $111,000 | $1,148.40 | 38% |
| $10,000 | $118,000 | $1,148.40 | 11% |
| $29,000 | $137,000 | $1,148.40 | 4% |
| $30,000 | $138,000 | $2,884.80 | 10% |
The pattern is the same at every limit: the worst place to stop is just over a cliff, and the best places are just under one or at the very top of a tier.
What this means for planning
- Know your headroom. The distance to the next limit is the single most useful number. The IRMAA calculator shows it.
- Stop short, or go all the way. If you are going to cross a limit with a planned conversion or sale, consider using the whole tier so the fixed cost buys as much room as possible.
- Keep a cushion. A late dividend or a fund distribution can be the dollar that crosses. Leave a few thousand dollars of room.
- Remember the two-year lag. The cliff applies to the return Social Security uses, two years before the premium year.
Other cliffs in retirement
IRMAA is not the only income cliff retirees face. Before 65, the ACA premium tax credit for marketplace insurance phases out with income, and the taxation of Social Security benefits rises in a way that creates higher effective rates over certain ranges. Each has its own rules. Mapping all of them on one timeline is a good use of an hour with a tax professional, especially in the years when you plan Roth conversions.
See how far you are from the edge, in dollars.
Open the IRMAA calculatorFrequently asked questions
Can earning more ever leave me worse off because of IRMAA?
Is IRMAA a tax?
Which IRMAA limit is the most expensive to cross?
Do the limits rise each year?
Sources
- CMS: 2026 Medicare Parts B premiums and deductibles
- IRS: Federal income tax rates and brackets
- Social Security: Premiums, rules for higher-income beneficiaries