Have a Large 401(k) and Approaching Medicare? Make Sure You Avoid This $1,783 Annual IRMAA Trap

"For 2026, the first IRMAA tier for married filing jointly begins at roughly $218,000 of MAGI. Cross it by one dollar and both spouses carry surcharges for a full calendar year. The trap sits in the Income-Related Monthly Adjustment Amount, or IRMAA, which uses a two-year lookback on modified adjusted gross income to set Medicare Part B and Part D premiums."

"Pull $200,000 from the traditional 401(k). That puts MAGI at $200,000, safely below the $218,000 cliff. After federal tax with the standard deduction and the 22% and 24% brackets stacked, the couple nets roughly $170,000 in spendable cash. The $30,000 shortfall against the $200,000 lifestyle target comes from the Roth IRA. Roth withdrawals do not count toward MAGI, which is the entire reason the account exists in this plan."

"The intuitive move is to pull the $30,000 from the $400,000 brokerage at long-term capital gains rates. The math punishes that choice. Realized capital gains flow straight into MAGI and push the couple toward the IRMAA line. Roth withdrawals stay invisible to MAGI, which is why they fill the gap while the brokerage wait"

"Roughly $1,783 per couple per year in avoided premiums. Stretched across two spouses over a 25-year retirement, the cumulative IRMAA avoided lands near $45,000, and that figure ignores the higher tiers a household typically hits once required minimum distributions begin."

A married couple plans to spend $200,000 per year in retirement while delaying Social Security until age 70. They hold assets across a traditional 401(k), a Roth IRA, and a taxable brokerage. Medicare Part B and Part D premiums can increase through IRMAA when modified adjusted gross income exceeds specific thresholds based on a two-year lookback. Their strategy withdraws $200,000 from the traditional 401(k) to keep MAGI below the first IRMAA cliff, then uses Roth IRA withdrawals to cover the remaining spending need because Roth withdrawals do not count toward MAGI. Using taxable brokerage withdrawals can raise MAGI through realized capital gains and push them toward IRMAA surcharges. Avoided premiums can total tens of thousands over a long retirement, with additional risk once required minimum distributions begin.

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