IRMAA

IRMAA — the Income-Related Monthly Adjustment Amount — is a Medicare premium surcharge that depends on a tax return you filed two years ago, with cliff-shaped tier boundaries that don't smooth out. One dollar over a threshold puts you fully into the next tier for the entire year, sometimes for thousands of dollars of extra Medicare premiums per spouse.

Most retirees don't model IRMAA when they plan a Roth conversion or sell a piece of appreciated stock. The result is a year of high Medicare premiums that could have been avoided with a few thousand dollars of conversion-amount adjustment.

This category covers what IRMAA is, how the two-year lookback works (and when SSA-44 lets you appeal it for a "life-changing event"), how MAGI is calculated for IRMAA purposes (different from MAGI for ACA), and how to model the cliff tiers as real marginal cost when sizing decisions in the years before and during Medicare eligibility.