At 70, She Plans a $28,000 IRA Withdrawal for Dental Implants, but Medicare Could Raise Her Premiums Later

Consider a 70-year-old widow who needs $28,000 in dental implants and intends to use a withdrawal from her traditional IRA to pay for them. Medicare will not cover the implants, and the money she takes out could increase her premiums two years later.

Quick Read

• Medicare does not cover routine dental care such as implants, and a $28,000 IRA withdrawal counts as income that can trigger higher premiums later.

• Moving her income about $9,000 above the $109,000 single-filer threshold would add roughly $1,150 a year in Part B and Part D surcharges, and she cannot appeal the increase.

• Using cash, selling low-gain brokerage shares, or spreading the withdrawal across two tax years could keep her below the surcharge threshold.

This issue mostly affects single filers whose ordinary income is near Medicare’s first surcharge level. Roughly 8% of Part B enrollees pay any surcharge at all. A retiree whose income is comfortably below the threshold can take IRA money for dental work without paying extra Medicare premiums.

Why Medicare Usually Does Not Cover Implants

Medicare generally excludes routine dental services, including cleanings, fillings, extractions, dentures and implants. Coverage only appears when dental treatment is directly connected to a covered medical procedure. Examples include an oral exam before a heart valve replacement or organ transplant, an extraction needed to clear an infection before chemotherapy, or treatment for complications from head and neck cancer therapy. Tooth-replacement implants do not fit those exceptions.

Many Medicare Advantage plans provide extra benefits that Original Medicare does not offer, but those dental benefits vary widely. Some plans rule out implants entirely, while others set annual caps that fall far short of the cost of a multi-tooth implant procedure.

Her $28,000 Withdrawal Still Counts Toward Income

Social Security uses modified adjusted gross income, or MAGI, to calculate the income-related monthly adjustment amount, known as IRMAA. MAGI includes adjusted gross income plus tax-exempt interest such as municipal bond income. Her $28,000 traditional IRA withdrawal would also be counted as taxable income.

The Social Security Administration generally looks at income from two years earlier, so a withdrawal taken in one year usually affects Medicare premiums two years later. In other words, a withdrawal made now can determine premium costs later.

If her baseline MAGI is $90,000, the withdrawal would raise it to $118,000. For a single filer, income over $109,000 and up to $137,000 triggers an extra $81.20 a month for Part B under current brackets. That would lift her Part B premium from $202.90 to $284.10, or $974.40 more for the year. Part D would add another $14.50 a month, or $174 a year. Combined, the surcharges would total $1,148.40.

Those figures reflect current rates, and Medicare has not yet released the brackets for the later year. The income thresholds rise with inflation, but the gap matters: she would still be about $9,000 above the current single-filer line. Between two recent years, that threshold increased by only $3,000, from $106,000 to $109,000.

Widowhood can make the situation more difficult. Married couples filing jointly have a threshold of $218,000, while single filers face a threshold of $109,000. Even if much of her household income remains unchanged, she has less room before surcharges begin.

She also cannot simply appeal the surcharge away. Form SSA-44 allows beneficiaries to request a lower IRMAA after certain life-changing events that reduce income, such as marriage, divorce, the death of a spouse, loss of income, or an employer settlement payment. A voluntary IRA withdrawal raises income rather than lowering it, so it does not qualify.

Ways the Payment Could Be Structured Differently

In a single year, she has about $19,000 of room under the current threshold. That does not mean she should postpone needed treatment just to preserve that room. Delaying care to avoid a one-year surcharge of $1,148.40 is usually a poor tradeoff. Adjusting the timing of the withdrawal may help her avoid the surcharge, though she would still need to consider the tax consequences.

Before She Books the Procedure

Three approaches could change the outcome: paying from savings, selling brokerage shares with limited gains, or splitting the IRA withdrawal across two tax years. Each option could reduce the chance of crossing the Medicare income threshold while still allowing her to get the dental work she needs.