21 Apr Your Social Security Raise and Your Medicare Bill: What Actually Showed Up in Your Check
Every fall, Social Security announces its cost-of-living adjustment for the coming year, and every fall, retirees brace for the Medicare premium announcement that follows shortly after. In 2026, the gap between the two numbers is worth paying close attention to, and if your income is above certain thresholds, the picture gets more complicated still.
The 2026 COLA: Good News, With a Catch
Social Security benefits increased 2.8 percent in 2026, with the average retirement benefit rising by about $56 a month, from $2,015 to $2,071. That is a meaningful bump, and it is slightly higher than last year’s 2.5 percent adjustment.
The catch is what happened to Medicare at the same time. The standard monthly premium for Medicare Part B rose from $185 in 2025 to $202.90 in 2026, an increase of $17.90, or nearly 9.7 percent. Since most Medicare enrollees have their Part B premium automatically deducted from their Social Security check, that $17.90 comes straight off the top of the COLA before you ever see it. The Part B increase eats up over a quarter of the 2026 Social Security cost-of-living adjustment.
This is the third straight year that the Medicare Part B premium has risen faster than Social Security’s COLA. The 2026 premium increase of 9.7 percent was more than three times the COLA of 2.8 percent. The pattern is not new, but it is worth naming clearly: over time, Medicare costs are quietly eroding the purchasing power of Social Security income for millions of retirees.
The Part B deductible also increased, rising from $257 in 2025 to $283 in 2026.
If Your Income Is Above Certain Levels: IRMAA
For most Medicare beneficiaries, the story ends at the standard premium. But if your income exceeds certain thresholds, you pay more, sometimes significantly more, through what is called the Income-Related Monthly Adjustment Amount, or IRMAA.
The IRMAA surcharge in 2026 applies to individuals with income above $109,000 and married couples above $218,000. For those affected, total monthly Part B premiums range from $284.10 to $689.90. Part D prescription drug coverage carries its own IRMAA surcharge on top of that, ranging from $14.50 to $91.00 per month.
Two things about IRMAA catch people off guard. First, it is a cliff system, meaning that if your income is even one dollar over a threshold, you owe the full surcharge for that entire tier. There is no gradual increase. That single dollar can cost a couple over $2,300 per year.
Second, your 2026 IRMAA is based on your 2024 tax return, not your current income. That two-year lookback creates situations where retirees are paying elevated premiums based on income from a year that no longer reflects their financial picture. If you had a high-income year in 2024 due to a business sale, a large Roth conversion, or a one-time distribution, you may be feeling it in your 2026 Medicare bill even though your income has since dropped considerably.
The good news is that you can appeal. If a qualifying life-changing event has caused your income to drop significantly, such as retirement, the SSA allows you to request a new determination using more recent income data by filing Form SSA-44. The approval rate for legitimate life-changing events is high, and this is one of the most underutilized planning tools available.
What You Can Do About It
Understanding IRMAA is one thing. Planning around it is another, and it is an area where a few decisions made years before Medicare eligibility can make a meaningful difference.
The two-year lookback means that income in your early 60s directly affects your Medicare costs at 65. Large Roth conversions, asset sales, or other income spikes in the years right before Medicare enrollment can bump you into a higher IRMAA tier from the moment you sign up. Spreading income events over multiple years, or timing them to years before the lookback window, can help keep premiums lower.
For retirees already on Medicare, the same logic applies year to year. The income figure that determines your premium is largely set by what you did two years ago, but that means you have a two-year runway to manage it going forward. Decisions about Roth conversions, IRA distributions, capital gains realizations, and even municipal bond interest, which counts toward the IRMAA calculation even though it is tax-exempt, all feed into your Medicare cost picture.
This is exactly the kind of coordination between tax planning and retirement income planning that is easy to overlook when you are looking at each decision in isolation. If you are approaching Medicare eligibility or already enrolled and want to understand how your income decisions are affecting your premiums, it is worth a conversation. The numbers are specific enough to your situation that general rules of thumb only go so far.
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