When most people think about Medicare, they assume it’ll be one of the simpler parts of retirement. You turn 65, sign up, and it just works… right?
But like most things tied to the government and income, there’s more to the story—especially if you have a high income in retirement.
For 2025, the standard Medicare Part B premium is $185/month, up from $174.70 in 2024
On top of that, if your Modified Adjusted Gross Income (MAGI) from 2023 exceeded certain thresholds, you’ll pay IRMAA—an extra surcharge on both Part B and Part D.
Here’s how the IRMAA brackets shake out in 2025
| MAGI (Filing status) | Part B total premium | Extra Part D cost |
|---|---|---|
| ≤ $106,000 (single) / ≤ $212,000 (joint) | $185.00 | Your plan premium |
| $106K–$133K / $212K–$266K | $259.00 (+$74) | + $13.70 |
| $133K–$167K / $266K–$334K | $370.00 (+$185) | + $35.30 |
| $167K–$200K / $334K–$400K | $480.90 (+$295.90) | + $57.00 |
| $200K–$500K / $400K–$750K | $591.90 (+$406.90) | + $78.60 |
| ≥ $500K / ≥ $750K | $628.90 (+$443.90) | + $85.80 |
What Is IRMAA (Really)?
IRMAA is not a penalty—it’s just how Medicare adjusts your monthly costs based on your MAGI from two years ago. So your 2025 premiums are determined by what you reported in 2023
This means a spike in income can unexpectedly bump up your premiums for years.
How People Get Caught Off Guard
We’ve seen this happen to good savers who did everything “right”:
- Pulling a large chunk from an IRA to travel.
- Converting a sizable amount to a Roth in one year.
- Selling a second home or rental.
- Continuing to earn while part-time retiring.
What You Can Do About It
The good news? You’re not locked in. Here’s how to stay ahead:
- Know your income: Plan IRA withdrawals, Roth conversions, and RMDs with the big picture in mind.
- Spread Roth conversions: Smaller conversions over several years avoid income “spikes.”
- Appeal IRMAA: If 2023 included a one-time life change (retirement, divorce, death), you can file SSA Form SSA‑44 to request a reduction using a newer tax year https://www.ssa.gov/forms/ssa-44.pdf
- Use QCDs: Qualified Charitable Distributions from IRAs can lower MAGI without reducing cash flow.
Why This Matters
In 2025, the difference between a Part B base premium of $185 and the highest IRMAA hit of $628.90 is around $444 monthly—over $5,300 a year
That’s real money your clients could use for travel, home upgrades, or family time—not government surcharges.
Bottom Line
Medicare isn’t a “one-size-fits-all” deal. And your income—even from years ago—impacts your current costs. But with awareness and proactive planning, you can smooth out those bumps and keep more of your money working for you.
At Nickels Wealth, we don’t just guide clients through saving and investing—we help them plan intelligently so surprises are the exception, not the rule.
If you’re wondering how IRMAA could affect you, reach out to us and we’ll be happy to help.
