While the 2025 IRMAA brackets will be based on your income from 2023, the financial decisions you make today are what will dictate your Medicare costs in 2026. Think of 2024 as your planning year—the year your income will set the stage for future premiums.

How the 2026 IRMAA Brackets Affect Your Medicare Premiums

Most people assume their Medicare Part B and Part D premiums are fixed, but that's not always the case. A system called the Income-Related Monthly Adjustment Amount, or IRMAA, can add a significant surcharge on top of your standard premiums.

This isn't a penalty. It’s simply how the system requires higher-earning retirees to contribute a bit more. What often catches people off guard, especially federal retirees, is how this surcharge is calculated.

The Social Security Administration (SSA) uses a two-year look-back to determine if you owe an IRMAA surcharge. It’s like a financial time machine, pulling your tax return from two years prior to set your current premiums.

This means the income you report on your 2024 tax return will directly determine your Medicare premiums for all of 2026. Every financial move you make this year—from taking a TSP distribution to managing your pension income—has a delayed but very real impact on your future retirement costs.

The Two-Year Look-Back Explained

This two-year delay is precisely why planning ahead is so critical. For instance, let’s say you take a large, one-time withdrawal from your traditional Thrift Savings Plan (TSP) in 2024 to pay for a new car or a big trip. By the time 2026 rolls around, that expense might be a distant memory, but the SSA will see that income spike on your 2024 tax return and could bump you into a higher IRMAA bracket for the entire year.

And this isn't an issue just for the super-rich. Many retired federal employees are surprised to learn that their combined income from a FERS or CSRS pension, Social Security benefits, and TSP withdrawals can easily push them over the first IRMAA threshold.

Projecting the 2026 IRMAA Brackets

While the official 2026 IRMAA brackets won't be finalized until late 2025, we can make solid projections based on inflation adjustments. For 2026, it’s projected that an individual with a 2024 Modified Adjusted Gross Income (MAGI) over $109,000 will face a surcharge. For married couples filing jointly, that threshold is expected to be $218,000.

This chart helps visualize the connection between the income you earn in 2024 and the surcharges you could face in 2026.

As you can see, even crossing an income tier by a small amount can trigger a substantial monthly increase in your premiums for both medical coverage (Part B) and prescription drugs (Part D).

Here’s a more detailed breakdown of the projected 2026 IRMAA brackets, which are determined by your 2024 income.

Projected 2026 Medicare IRMAA Brackets and Premiums (Based on 2024 MAGI)

This table provides a look at the projected income tiers for 2026 and the corresponding extra monthly costs for Medicare beneficiaries who fall into them.

2024 Modified Adjusted Gross Income (MAGI)	Filing Status	Extra Monthly Part B Premium	Extra Monthly Part D Premium
$109,000 or less	Individual	$0	$0
$218,000 or less	Joint	$0	$0
Above $109,000 to $137,000	Individual	+$81.20	+$14.50
Above $218,000 to $274,000	Joint	+$81.20	+$14.50
Above $137,000 to $171,000	Individual	+$202.90	+$37.50
Above $274,000 to $342,000	Joint	+$202.90	+$37.50
Above $171,000 to $205,000	Individual	+$324.60	+$60.40
Above $342,000 to $410,000	Joint	+$324.60	+$60.40
Above $205,000 to < $500,000	Individual	+$446.30	+$83.30
Above $410,000 to < $750,000	Joint	+$446.30	+$83.30
$500,000 or more	Individual	+$487.00	+$91.00
$750,000 or more	Joint	+$487.00	+$91.00

Note: These figures are projections based on inflationary estimates and could change. Official numbers are typically released in the fall of the preceding year.

Getting a handle on these numbers now is the first step toward smart retirement planning. When you know how your income today will affect your costs tomorrow, you’re in a much better position to make decisions that protect your budget.

Your Federal Benefits and the IRMAA Calculation

To get a handle on what you might owe for IRMAA in 2025 (or any future year), you first need to know what income the government is looking at. The Social Security Administration doesn't just glance at your pension; they use a specific formula called Modified Adjusted Gross Income (MAGI). This calculation often catches federal retirees by surprise because it pulls together income from several different places.

Think of your MAGI as the government's special recipe for determining your Medicare premiums. It starts with your Adjusted Gross Income (AGI)—that’s line 11 on your Form 1040—and then adds back a few things, most commonly tax-exempt interest from municipal bonds.

For feds, this recipe has some very specific ingredients that come directly from your benefits package.

What Counts Toward Your IRMAA Income?

Knowing which of your hard-earned federal benefits get thrown into the MAGI pot is the key to managing your costs. Let’s break down exactly what the SSA is adding up.

Here’s what goes into the calculation:

• Your FERS or CSRS Pension: Those monthly annuity payments are a cornerstone of your retirement income, and they are fully taxable at the federal level once you've recouped your after-tax contributions. This makes them a major part of your AGI.
• Traditional TSP Withdrawals: Every dollar you take from your traditional Thrift Savings Plan is counted as ordinary income. It doesn't matter if it's a one-time lump sum, scheduled installment payments, or a TSP annuity.
• A Portion of Your Social Security: Depending on your other income, up to 85% of your Social Security benefits can be taxable and, therefore, included in your MAGI. If you need a refresher on this, you can learn more about Social Security benefits for federal employees in our complete guide.
• Other Taxable Income: This is the catch-all for everything else—dividends from investments, capital gains, interest earned, or wages from that part-time gig you picked up in retirement.

On the flip side, some income sources are invisible to this calculation. The most powerful example? Qualified withdrawals from a Roth TSP or a Roth IRA do not count toward your MAGI. This is a game-changer and the foundation for many smart IRMAA planning strategies.

The bottom line is this: If a source of income raises your Adjusted Gross Income on your tax return, it’s almost certainly going to raise your MAGI for IRMAA purposes.

The Two-Year Lag and the One-Time Income Spike

That two-year look-back period can deliver a nasty shock, especially if you have a year with a sudden, significant income event. A large, one-time withdrawal can have consequences that you won't feel for two full years.

Let's walk through a real-world example.

A Cautionary Tale

Meet Mark, a federal employee who retired at the end of 2023. In 2024, he and his wife finally decide to tackle a major home renovation they've been planning for years. To cover the $80,000 cost, Mark pulls a large distribution from his traditional TSP account.

The project goes smoothly, and they love their new kitchen. But then, in the fall of 2025, a letter from the Social Security Administration arrives. It informs Mark that because his income in 2024 was so high, his Medicare premiums for 2026 will include a hefty IRMAA surcharge.

Mark is floored. His regular pension and Social Security are well within a safe range. He hadn't realized that the one-time $80,000 TSP withdrawal in 2024 would rocket their joint income into a higher IRMAA bracket. Now, for all of 2026, both he and his wife will pay hundreds more every single month for Medicare—a painful, year-long penalty for a financial decision made two years prior.

Mark's story is a classic example that every federal retiree should take to heart. Big, unplanned withdrawals from tax-deferred accounts like the traditional TSP can trigger a delayed but very real financial hit.

Strategic Planning to Minimize Your IRMAA Exposure

Knowing the IRMAA rules is the first step, but outsmarting them requires a real plan. The good news for federal employees is that your benefits—especially the Thrift Savings Plan—give you a fantastic set of tools to manage your future income and keep these surcharges at bay.

The trick is to stop thinking about just saving for retirement and start thinking about how you'll create tax-efficient income in retirement. It’s less about how big your TSP balance is and more about how much of it you actually get to keep after taxes. The moves you make years before you ever sign up for Medicare can make a world of difference.

The Three Buckets of Retirement Income

I often advise clients to think of their retirement money as being held in three different buckets, each with its own tax rules. A smart retirement plan isn't about filling just one bucket to the brim; it's about having the right mix in all three so you can control your taxable income each year.

• The Taxable Bucket: This is your standard brokerage account. You pay taxes on dividends and capital gains along the way, so it's a mix of pre-tax and after-tax money.
• The Tax-Deferred Bucket: Think of this as your Traditional TSP and traditional IRAs. You get a tax deduction for contributing, which is great, but every single dollar you pull out in retirement is taxed as ordinary income and inflates your MAGI.
• The Tax-Free Bucket: Here’s your secret weapon for IRMAA planning: the Roth TSP and Roth IRAs. You contribute with after-tax dollars, but every qualified withdrawal you make in retirement is 100% tax-free. Most importantly, it doesn’t count toward your MAGI at all.

Your best defense against the 2025 IRMAA brackets (and beyond) is to build up a healthy balance in that tax-free bucket. It’s a source of income you can tap anytime without alerting the Social Security Administration.

When you have a good mix of these buckets, you're in the driver's seat. If you need a big chunk of cash for a new car or a home repair, you can pull it from your Roth account without the risk of bumping yourself into a higher, more expensive IRMAA tier.

Comparing IRMAA Planning Strategies

To see why this matters, let's compare two common approaches federal employees take with their TSP and how it affects their long-term IRMAA risk.

Strategy	Short-Term Tax Impact	Long-Term IRMAA Exposure	Best For
Traditional-Only TSP	Lower taxes during your working years due to pre-tax contributions.	High. All withdrawals and future RMDs are fully taxable, increasing MAGI.	Savers who prioritize immediate tax deductions over long-term tax flexibility.
Balanced (Traditional + Roth)	Higher taxes during working years (for Roth part), but strategic Roth conversions fill the tax-free bucket later.	Low to Moderate. Provides tax-free income to pull from, reducing reliance on taxable TSP withdrawals.	Planners who want control over their taxable income in retirement to actively manage IRMAA.

As the table shows, a balanced approach gives you the flexibility you need. Relying solely on the traditional TSP saves you tax money now, but it can create a significant IRMAA headache down the road.

Using Your "Gap Years" for Roth Conversions

For federal retirees, one of the most powerful tactics is to leverage your "gap years." This is the window of time between your retirement date and when you start taking Social Security and Required Minimum Distributions (RMDs) from your TSP, which now begin at age 73 or 75. For many, this is a period of relatively low income.

This window is the perfect time for Roth conversions. Simply put, you move money from your traditional TSP to a Roth IRA. You have to pay ordinary income tax on the amount you convert, but you're doing it in a year when your income is low.

It might feel strange to voluntarily pay taxes, but it’s a calculated move. You’re essentially "pre-paying" the tax at today's potentially lower rate. By doing so, you shift that money from the tax-deferred bucket into your forever-tax-free bucket.

Example in Action

Imagine a FERS employee retires at 62. They have a pension but plan to wait until 67 to claim Social Security. For those five gap years, their pension is their main source of income.

• Age 62: They decide to convert $50,000 from their traditional TSP into a new Roth IRA.
• The Tax Hit: They'll pay income tax on that $50,000 now. They work with a planner to make sure the conversion doesn't push them into a much higher tax bracket for the year.
• The Payoff: That $50,000, plus all the growth it ever earns, is now completely tax-free. When they need cash at age 75 or 80, they can withdraw it without adding a single penny to their MAGI, helping them steer clear of IRMAA for life.

By repeating this process over several gap years, you can shrink your future RMDs and gain powerful control over your taxable income. For a deeper dive into this and other tax-saving ideas, check out our guide on how to reduce taxes in retirement for federal employees. A little bit of planning today can save you from letting IRMAA dictate your finances tomorrow.

How to Appeal Your IRMAA Decision Using Form SSA-44

It’s a moment many retirees dread: opening a letter from the Social Security Administration (SSA) and discovering you’re going to be paying more for Medicare. That initial sticker shock is real, but here’s something the letter doesn't scream from the rooftops: the decision isn't final.

The SSA has a built-in process for you to contest the surcharge, and frankly, it’s a tool every new retiree should know how to use.

Remember, the SSA is always looking in the rearview mirror, basing your premiums on tax returns from two years ago. If your life has changed dramatically since then (hello, retirement!), you have every right to appeal. This is your chance to show the SSA that your high-earning past doesn't match your current retirement reality.

The key to this whole process is one specific document: Form SSA-44, Medicare Income-Related Monthly Adjustment Amount - Life-Changing Event. Think of it as your official way of getting the SSA's attention and requesting a do-over on their calculation.

Qualifying Life-Changing Events

Now, you can't appeal an IRMAA surcharge just because you think it's unfair. The SSA has a specific list of "life-changing events" that they recognize. Your situation has to fit into one of these approved categories, which ensures the appeal is for legitimate cases of significant income drops.

The most common qualifying events include:

• Work Stoppage: This is the big one, especially for federal employees who just retired. Your income has almost certainly taken a nosedive.
• Work Reduction: If you haven't stopped working entirely but have cut back your hours, leading to a smaller paycheck, this counts.
• Loss of Income-Producing Property: This is for situations outside your control, like losing a rental property in a natural disaster.
• Marriage: Tying the knot can change your household income and tax filing status, which can impact the calculation.
• Divorce or Annulment: The end of a marriage often leads to a major income shift for one or both spouses.
• Death of a Spouse: Losing a spouse and their associated income is a profound financial change.
• Loss of Pension Income: This covers events where your pension payments stop or are significantly reduced.

If one of these events describes your recent past, you’re in a great position to file a successful appeal.

A Step-By-Step Guide to Form SSA-44

At first glance, any government form can look intimidating. But Form SSA-44 is surprisingly straightforward. It essentially asks you to do three things: tell them what happened, show them how it affected your income, and prove it.

Here’s a simple breakdown of the process:

1. Identify the Event: The very first step on the form asks you to check the box for your life-changing event (for instance, "Work Stoppage") and write down the date it happened.
2. Estimate Your New Income: Next, you'll need to project your Modified Adjusted Gross Income (MAGI) for the year in question. This is your best estimate of your new, post-event income.
3. Provide Documentation: This is the most important part of your appeal. You must attach clear, convincing proof of both the event itself and your new, lower income. An appeal without solid evidence is a guaranteed denial.

The SSA gives you a 60-day window to file your appeal, starting from the date on your IRMAA notice. Don't let this sit on your desk—start gathering your documents right away.

Example for a Recently Retired Federal Employee

Let's walk through a classic scenario. Imagine a federal employee, Susan, who retired on December 31, 2023. Her income was high that year, reflecting her final months of work. In late 2024, she gets a notice that her 2025 IRMAA brackets will trigger a hefty surcharge.

Susan shouldn't just accept this. Here’s exactly how she uses Form SSA-44:

• Life-Changing Event: Susan checks the "Work Stoppage" box and puts her retirement date, 12/31/2023.
• Evidence of Retirement: She attaches a copy of her SF-50 (Notification of Personnel Action). For federal employees, this is the golden ticket—it's the official government record of your separation from service.
• Evidence of New Income: Susan then provides proof of her new, much lower income. This will include statements showing her FERS pension amount and any planned TSP withdrawals for the year.

By submitting Form SSA-44 with this clear documentation, Susan isn't just asking for a review; she's proving her case. She's demonstrating that her 2023 income is history. The SSA can then recalculate her 2025 premium based on her actual retirement income, very likely erasing the IRMAA surcharge completely.

Real-World IRMAA Scenarios for Federal Retirees

Knowing the rules of IRMAA is one thing, but seeing how they actually affect people is where it all clicks. The best way to really get a handle on the 2025 IRMAA brackets is to walk through some situations that federal employees run into all the time.

These stories put flesh on the bones of the numbers and strategies we've been talking about. They show just how much of a difference a little bit of planning can make. Let's look at three different federal employees and see how their choices shape their financial future.

Meet Sarah: The Proactive FERS Planner

Sarah is 55, a FERS employee who’s aiming to retire at age 62. She’s been a great saver and has built up a healthy traditional TSP balance. But when she learned about IRMAA, it set off alarm bells. She realized that her future pension and TSP withdrawals could easily push her into the surcharge zone, so she decided to get ahead of the problem.

Her game plan is to use those "gap years"—the time between her retirement at 62 and when she starts collecting Social Security at 70—to do some strategic Roth conversions.

The Strategy: For five straight years, from age 63 to 67, Sarah will convert $40,000 from her traditional TSP into a Roth IRA. During this time, her FERS pension will be her main income source, which keeps her in a relatively low tax bracket for the conversions.

• Before: Without this plan, the combination of her FERS pension, Social Security, and eventual required minimum distributions (RMDs) from her large traditional TSP would almost certainly push her and her husband over the IRMAA cliffs. They'd be looking at years of paying extra.
• After: By methodically converting $200,000 over five years, Sarah builds a powerful, tax-free source of funds. Now, when she needs extra money in her 70s and 80s, she can take it from her Roth IRA, and those withdrawals won't count toward her MAGI at all. This simple move helps keep their income below the IRMAA thresholds, potentially saving them thousands in premiums every single year.

Sarah’s story is a perfect example of how thinking ahead pays dividends. She chose to pay some taxes during her lower-income years to buy herself decades of tax-free growth and, most importantly, control over her Medicare costs.

Meet David: The Blindsided CSRS Retiree

David, a 68-year-old CSRS retiree, is enjoying his life and comfortable pension. In 2024, he decides to do something generous and pulls $75,000 from his TSP to help his kids with a down payment on their first home. He didn't give it a second thought—until a letter from the Social Security Administration showed up in late 2025.

The notice informed him that because of his high income back in 2024, he and his wife would each owe an extra $324.60 a month for Part B in 2026. On top of that, they’d owe another $60.40 each for Part D. All told, it was an unexpected $770 hit to their monthly budget.

The Appeal: David was floored at first, but then he remembered reading something about appealing IRMAA decisions. It dawned on him that his official retirement in early 2024 qualified as a "work stoppage"—a life-changing event. He had made the $75,000 withdrawal after he had already stopped working.

He immediately filled out Form SSA-44 to challenge the decision.

1. Event: He checked the "Work Stoppage" box and wrote down his official retirement date.
2. Proof: He attached a copy of his SF-50, which is the government's official proof of his separation.
3. New Income: He provided statements showing that his CSRS pension was now his primary—and much lower—source of income for 2025 and 2026.

His appeal was a success. Social Security agreed to recalculate his premiums based on his current, lower income, wiping out the nearly $9,240 in extra charges he and his wife were facing for 2026. David's experience is a critical lesson: an IRMAA notice isn't always the final word. Knowing the appeal process is a vital skill, especially for new retirees. It's also essential to understand how your FEHB plan fits into the puzzle. For more on that, take a look at our federal retiree's guide to FEHB and Medicare.

Meet Maria: The Mid-Career Fed

Maria is 45 and has been a federal employee for years. She’s always contributed to the traditional TSP because she liked getting the immediate tax deduction. But after attending a retirement seminar, she had a lightbulb moment about IRMAA. She realized that while she was saving on taxes today, she was creating a huge tax and premium headache for herself down the road.

The Shift in Strategy: Maria went back to work and immediately changed her TSP contributions. From that day forward, she decided to direct all her new savings, including the 5% agency match, into the Roth TSP.

• Financial Impact: Yes, her take-home pay went down a little since her contributions were now made with after-tax dollars. But she saw it as "pre-paying" her taxes at her current, lower rate instead of a potentially higher one in retirement.
• Long-Term Benefit: Fast forward 20 years to Maria's retirement. She will have accumulated a massive fund of tax-free money. Every qualified withdrawal she takes from her Roth TSP will be completely invisible to the MAGI calculation for the 2025 IRMAA brackets and any future brackets.

Maria’s simple course correction shows the incredible power of starting early. Every dollar she directs to the Roth TSP today is one less dollar that can come back to bite her in the form of higher Medicare premiums later in life.

Frequently Asked Questions About IRMAA

Even after you get the basics of IRMAA down, a lot of "what if" scenarios can pop up. That's completely normal, especially for federal employees who are managing pensions, Social Security, and TSP accounts all at once.

Let's walk through some of the most common questions we hear from federal retirees. Getting these answers straight will help you manage your Medicare costs with a lot more confidence.

Can My Salary Cause an IRMAA Surcharge If I Retire Mid-Year?

Yes, and this is a common "gotcha" for new retirees—but it’s a temporary one. Remember, the Social Security Administration (SSA) will initially look at your tax return from two years ago. So, if you retire in 2024, your 2026 premiums will be based on your 2024 tax return, which still includes a chunk of your old work salary.

But don't panic. Retirement is a textbook "life-changing event" according to the SSA. You simply need to file Form SSA-44 to appeal the surcharge, provide proof of your retirement (like your SF-50), and give them an estimate of your new, lower income. Once approved, the SSA will recalculate your premiums based on your current retirement income, not your past salary.

Do Roth TSP Withdrawals Count Toward IRMAA Income?

No, they do not. This is a game-changer for smart retirement planning. Qualified withdrawals from a Roth TSP or a Roth IRA are not included in the Modified Adjusted Gross Income (MAGI) used to calculate IRMAA.

This is exactly why building up that Roth balance during your career is such a powerful move. It creates a pot of retirement money that is essentially "invisible" to the IRMAA calculation. This gives you incredible flexibility to pull out cash for a big trip or an unexpected expense without worrying about a premium hike two years later.

Think of your Roth TSP as a financial secret weapon. It allows you to access funds when needed without inflating the income figure that the Social Security Administration sees, helping you stay below the expensive 2025 IRMAA brackets and those in future years.

How Far Back Does Social Security Look for My Income?

The SSA always uses a standard two-year look-back period. This simple rule is the key to the entire IRMAA system and dictates your planning timeline.

It means your 2026 Medicare premiums will be based on the income you report on your 2024 tax return. Following that same logic, the 2025 IRMAA brackets will apply to you based on your income from 2023. This delay is precisely why thinking ahead is so important—the financial moves you make today have a direct and predictable impact on your Medicare costs two years down the road.

What if My Income Drops After I Start Paying IRMAA?

It all depends on why your income dropped. If it was due to one of the official qualifying life-changing events, you can appeal immediately. For instance, if you were paying IRMAA and your spouse passed away, you could file Form SSA-44 right away to get your premium recalculated based on your new, single-filer income.

But if your income drops for another reason—maybe you had a bad year in the stock market or decided to stop working part-time—you generally have to wait for the two-year look-back to catch up on its own. Your premium for the next year might still reflect that old, higher income, but the year after that, it should adjust downward to reflect your new reality.

Do Capital Gains Affect My IRMAA Calculation?

Yes, absolutely. Capital gains are a major part of your Adjusted Gross Income (AGI), which is the foundation for your MAGI calculation. A big, one-time capital gain from selling stock, a rental property, or even your primary home can easily bump you into a much higher IRMAA tier.

This is a common trap for retirees who aren't connecting the dots between selling an asset and their Medicare bill two years later. To avoid a surprise, you can plan ahead:

• Tax-Loss Harvesting: Use investments that have lost value to offset your gains, which lowers your net taxable income.
• Spread Out Gains: If you have a large, highly appreciated asset, see if you can structure the sale over multiple years instead of taking the entire income hit at once.
• Use Charitable Donations: Donating appreciated stock directly to a qualified charity is a great way to meet your philanthropic goals while avoiding the capital gains tax altogether.

Can My IRMAA Surcharge Change Mid-Year?

Not usually. Your IRMAA premium is set for the entire calendar year and stays the same from January through December.

The only real exception is if you file an appeal for a life-changing event and the SSA approves it. In that case, they can adjust or completely remove your surcharge, and the change is often made retroactive to the start of the year. Otherwise, you should expect your monthly premium adjustment to stay put for all 12 months.

How Long Will I Have to Pay IRMAA?

IRMAA isn't a permanent penalty; it's an annual calculation. You pay it for as long as your income from two years prior stays above the threshold for that year.

If your income is consistently high, you can expect to pay IRMAA every year. But if your income fluctuates, so will your IRMAA status. For example, doing a large Roth conversion in 2024 might trigger IRMAA for 2026, but if your income goes back to normal in 2025, the surcharge could vanish in 2027.

---

Understanding and planning for the 2025 IRMAA brackets and beyond is a critical part of a secure federal retirement. At Federal Benefits Sherpa, we specialize in helping you navigate these complex rules. Our experts can analyze your specific situation—from your TSP and pension to your Social Security timing—to build a strategy that minimizes taxes and controls your future healthcare costs. Get your free 15-minute benefit review to see how we can help you retire with confidence.