For retirees

One dollar over a cliff can cost you all year.

Medicare premiums step up at income cliffs. Cross one by even a dollar and your premiums rise for the whole year. Keeping income just under the line protects your wallet.

Watch the quick version

See how it works through one simple example.

Is this you?

You are on Medicare and your income is near a premium cliff.
IRMAA usually looks at your income from two years earlier.

Here is the idea, in plain words

Medicare's income-related premiums jump in steps, not gradually. A single dollar over a threshold bumps you to the next tier.

By managing your income to stay just under the line, you can keep about fifteen hundred dollars in premiums.

A few dollars of planning can save a whole year of higher charges.

What this could be worth

Staying just under a cliff can save around $1,500 in premiums for the year.
  • 1Find the IRMAA thresholds for your situation.
  • 2Project your income, including IRA withdrawals and gains.
  • 3Manage income to land just under the nearest cliff.

Educational guidance, not tax advice. We confirm every figure and your eligibility before you act.

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What to watch out for

The honest version.

  • IRMAA generally uses income from two years prior, so plan ahead.
  • One-time income like a Roth conversion or big gain can push you over.
  • The cliffs are hard steps, not gradual phase-ins.

Common questions

What is IRMAA?

An income-related surcharge added to Medicare premiums above certain income tiers.

Which year's income counts?

Usually your income from two years earlier.

How do I avoid a jump?

Keep your income just under the next threshold, watching one-time income.

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