IRMAA Planning Strategies

Medicare offers valuable healthcare coverage in retirement, but higher-income retirees may face an added expense called the Income-Related Monthly Adjustment Amount (IRMAA). These surcharges increase your Medicare Part B and Part D premiums if your income is above certain thresholds. The good news? With the right IRMAA planning strategies, you can often reduce or even avoid these extra costs.

At Diversified Insurance Brokers, our Medicare specialists work with retirees nationwide to manage IRMAA risk. We help you understand the rules, time your income, and explore strategies to keep your premiums as low as possible — all while protecting your retirement income plan.

What Is IRMAA?

IRMAA is an additional monthly charge applied to Medicare Part B and Part D premiums for individuals and couples whose income exceeds specific thresholds. The Social Security Administration determines your IRMAA bracket based on your Modified Adjusted Gross Income (MAGI) from two years prior. For example, your 2025 premiums are based on your 2023 tax return.

The higher your income, the higher your Medicare premiums. That’s why retirees who sell assets, take large IRA withdrawals, or trigger taxable events are often surprised when their Medicare premiums jump significantly two years later.

Why IRMAA Planning Matters

Many retirees underestimate the impact of IRMAA. These surcharges can add hundreds — even thousands — of dollars per year in extra costs. Without planning, you may unintentionally push yourself into a higher bracket. Proactive IRMAA planning can help you:

• Save thousands in unnecessary Medicare premiums
• Coordinate income distributions with Medicare enrollment
• Protect more of your retirement savings for long-term goals
• Maintain flexibility in managing your tax bracket

IRMAA Planning Strategies

Our advisors use a variety of strategies to help clients reduce or avoid IRMAA surcharges. Common approaches include:

• Income Timing: Delaying or spreading out large IRA or 401(k) withdrawals to avoid crossing IRMAA thresholds in one year.
• Roth Conversions: Converting to a Roth IRA in lower-income years to control future taxable income.
• Qualified Charitable Distributions (QCDs): Using QCDs from IRAs to reduce taxable income while supporting charitable causes.
• Capital Gain Management: Timing the sale of assets to spread capital gains over multiple years.
• Appeals and Life-Changing Events: Requesting an IRMAA adjustment if your income dropped due to retirement, divorce, or other qualifying events.

Case Example

Consider a retired couple with an income just above the IRMAA threshold. By restructuring IRA withdrawals and using charitable distributions, they reduced their reported income below the limit. This saved them more than $2,000 per year in Medicare premiums. Strategies like this, when applied consistently, can have a major impact over a 20–30 year retirement.

How Diversified Insurance Brokers Can Help

IRMAA planning is just one piece of Medicare and retirement strategy. At Diversified Insurance Brokers, we provide fiduciary guidance to help you minimize costs and maximize benefits. From Medicare plan selection to long-term care planning, we ensure every part of your retirement plan works together.

We also help with strategies involving annuities for retirement income and life insurance alternatives to strengthen your long-term financial security.

Book a Free Consultation

Schedule a one-on-one session with our Medicare expert to learn how IRMAA could affect your premiums and what you can do about it.

Related Pages

• Medicare Insurance Overview
• Medicare Advantage vs Medicare Supplement
• HSA and Retroactive Part A Guide
• Long-Term Care Insurance