Turning 65? Here’s Why Your Medicare Premiums Could Be Higher Than Expected

Once you reach 65, you can enroll in Medicare. But people with higher incomes should pay close attention to premium costs so they are not taken off guard.

Part B premiums are usually standard, but Medicare also applies a two-year lookback when deciding whether you owe income-related monthly adjustment amount, or IRMAA, surcharges. In practice, your highest-earning year can temporarily affect what you pay in retirement.

What IRMAA means

IRMAA adds a surcharge to Part B and Part D premiums when your modified adjusted gross income crosses a set threshold. For single filers, that threshold is $109,000 in 2026. For married couples filing jointly, it is $218,000.

Most lower- and middle-income beneficiaries do not face IRMAA charges. Part B surcharges are generally higher than those for Part D.

IRMAA income thresholds

The current MAGI thresholds for single filers and married couples filing jointly are $109,000 and $218,000, respectively, and those amounts are expected to rise in 2027.

The projected limits for 2027 are $112,000 for single filers and $224,000 for married couples filing jointly, with the calculation based on 2025 income.

How the two-year lookback works

The thresholds reflect the income you had two years earlier to determine whether IRMAA applies. So if you retire at 65 but had a high-earning job at 63, you could still be charged IRMAA even if your retirement income is much lower.

This often surprises people in the first couple of years after retirement, when their former salary still counts but their current income sources are more limited. The impact usually becomes less severe later in retirement.

A Roth conversion at 63 can also raise your IRMAA costs, since the converted amount is counted as ordinary income for that tax year.

Appeals and planning ahead

Although the lookback rule can create an unexpected bill, you may be able to appeal. Form SSA-44 can be filed if you experienced a life-changing event that may make it harder to afford IRMAA. Retirement, reduced work hours, divorce, and the death of a spouse are among the events that may qualify.

The appeals process can take 30 to 90 days.

Planning ahead can help keep Medicare expenses down. If retirement is still a few years away, it may be wise to think carefully before taking actions that push income higher on paper. Roth conversions, a home sale, and other major financial moves can all increase your income for IRMAA purposes if they fall within the lookback window.