A year-by-year income map showing how withdrawals approach each Medicare premium tier is what Tolleson Wealth Management's Medicare IRMAA planning gives retirees living on pre-tax savings.
The map is rebuilt at one annual meeting each fall, before December 31 closes the tax year that Medicare will read two years later to set Part B and Part D premiums.
The pressure often starts when a trip, a roof replacement, or a gift to family needs money before year-end. Once December 31 passes, that withdrawal belongs to the finished tax year; two years later, it can show up as a higher Medicare bill even if your regular monthly spending has stayed steady.
Why do I hit the Medicare surcharge sooner after filing single?
Many retirees expect Medicare costs to be the same for everyone, but filing single can bring the surcharge sooner: in 2026, Medicare charges $284.10 monthly for Part B once single MAGI exceeds $109,000, versus $202.90 below it; the first joint threshold is $218,000, and Part D is also surcharged.
This is often a widow or widower whose income barely changed while the first tier line was cut in half. It also affects a retiree taking a substantial monthly paycheck from a 403(b) or IRA. Astrid is 68, a former university librarian with a small state pension and a paid-off condo.
Tolleson Wealth Management treats each tier line as another guardrail on the paycheck. Before suggesting a spending raise after strong markets or a one-time withdrawal, we add it to the projected income and see which side of the line the year will finish on.
Do I really pay for this year's withdrawal two years from now?
People usually expect a withdrawal to affect only this year's tax bill. Medicare sets each year's premium using MAGI from the federal tax return two years earlier, so 2026 premiums use 2024 income, and a withdrawal at 68 can set the premium paid at 70.
For IRMAA, Social Security uses adjusted gross income plus tax-exempt interest. Taxable state pension payments, taxable Social Security, 403(b) and IRA withdrawals, and capital gains count. Qualified Roth IRA distributions do not. The tiers work as cliffs: one dollar over a line triggers the full higher tier for that premium year.
For illustration, Astrid is hypothetical and files single. She has $650K split between a 403(b) and IRA, a $24K state pension, $25,500 of taxable Social Security (85 percent of $30K), and a $30K 403(b) withdrawal. Her MAGI is $24K + $25,500 + $30K = $79,500. She wants another $40K for a long trip. Taking all $40K in one tax year makes $79,500 + $40K = $119,500, above the $109,000 first-tier line used for this 2026 illustration. Two years later, Part B is $284.10 rather than $202.90: $81.20 monthly × 12 = $974.40 for that year, plus a Part D surcharge. Taking $20K in December and $20K in January puts each year's income at $79,500 + $20K = $99,500. Both years stay below the line, so the premium result carries through at 70 and 71.
Quick test: before an extra withdrawal or sale, add it to this year's projected MAGI. If it crosses the 2026 first tier of $109,000 single or $218,000 joint, see whether splitting the transaction at December 31 keeps both tax years under the line. A one-year spike costs nothing on this year's Medicare bill. Two years on, a single filer whose MAGI landed at $112,000 can pay $974.40 more for Part B, plus Part D. Repeating the spike repeats the premium. Social Security recalculates each year, and Form SSA-44 can ask it to use more recent income after a spouse's death, work stoppage, marriage, or divorce.
Should my guardrail raises wait for the Medicare line?
A guardrail raise should wait when spending it from a pre-tax account would push projected MAGI over an IRMAA tier, because a small increase in this year's paycheck can add a full year of higher Part B and Part D premiums two years later. Tolleson Wealth Management checks the tier before releasing the raise, then considers cash or a brokerage account for part of it.
A qualified charitable distribution from an IRA is available at 70½ and is excluded from income, so it can reduce MAGI when charitable giving is already part of the household budget. Astrid's RMDs begin at 73, adding forced income five years after her travel decision. Social Security claiming and Roth conversions deserve their own calculation, but each changes the same income map.
Estate paperwork belongs in the same annual meeting. After a spouse dies, the joint return is usually available only for the year of death; from the next year most survivors move to single-filer tier lines, which are half the joint ones. Beneficiary designations, the will, and the survivor's withdrawal schedule need to agree before that happens. Account values can drop below the amount invested, so any cash bridge used to avoid a tier still has to fit the spending guardrails.
At 63, the first Medicare premium is already taking shape
Retirees still working often see age 65 as the starting point, though the tax return from the year they turn 63 sets that first premium. The IRS higher catch-up for ages 60 to 63 is $11,250 in 2026; a pre-tax deferral lowers MAGI, while a Roth catch-up does not. If prior-year FICA wages exceeded $150,000, the IRS requires that catch-up to be Roth.
| Age | What switches on | Effect on IRMAA |
|---|---|---|
| 60 to 63 | $11,250 higher catch-up | Pre-tax deferral lowers MAGI |
| 63 | Tax year Medicare reads at 65 | First lookback year |
| 65 | Part B and Part D begin | Premium set by income at 63 |
| 70½ | QCDs allowed from an IRA | Gift lowers MAGI |
| 73 | RMDs start (born 1951–1959) | Forced income raises MAGI |
| 75 | RMDs start (born 1960 or later) | Same effect, two years later |
Five people touch one Medicare premium
You tell us about trips, gifts, and big purchases before money moves. Tolleson Wealth Management tracks projected MAGI against tier lines and dates withdrawals around December 31; your CPA confirms MAGI on the filed return and QCD reporting. You or the CPA file Form SSA-44 after a life-changing event. Your attorney keeps beneficiary designations and the will in step, while the custodian processes dated withdrawals and QCD checks.
Bring your premium letter to Tolleson Wealth Management
Bring the latest Social Security letter stating your Part B premium, your two most recent federal tax returns, year-to-date statements for every 403(b), IRA, and brokerage account, plus your pension and Social Security benefit amounts. This service adds little if MAGI sits well below the first tier and no RMD or large sale is coming. And a surcharge of about $1,000 annually should not block a move that saves more in income tax.
The first conversation at Tolleson Wealth Management covers projected MAGI for this year and next against the 2026 tier lines, planned spending such as travel, a roof, or family gifts, and whether a recent life event makes Form SSA-44 worth filing. You'll know which income year Medicare reads next and the room remaining under the line. A conversation is appropriate for households with $500K in investable assets, and Tolleson Wealth Management gives you its compensation in a written document while your accounts are still where they are today.
Questions about Medicare IRMAA planning
If I take a large IRA withdrawal in December at 68, which year's Medicare premium does it change?
What happens if my income falls back under the tier line the next year? Does the surcharge go away?
How much does crossing the first IRMAA tier add for a single filer?
Does a qualified charitable distribution at 70½ lower the income Medicare uses for my premium?
Does my small state pension count toward the income Medicare uses for IRMAA?
Where the rules come from
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This is general information, not personalized investment, tax, or legal advice. Investing involves risk, including possible loss of principal. Talk to a financial professional before making decisions about your money.