Understanding the 2026 IRMAA Brackets – A Guide for Federal Retirees

 

Retirement planning isn’t just about saving—it’s also about anticipating the expenses that can creep up later in life. One of the biggest surprises for many retirees comes from Medicare premiums, especially when the 2026 IRMAA brackets (Income-Related Monthly Adjustment Amount) come into play.

At Federal Pension Advisors, we help federal employees and retirees prepare for these costs so they can protect more of their hard-earned retirement income. The goal is simple: make informed decisions today that save you from costly surprises tomorrow.

What Are the 2026 IRMAA Brackets?

IRMAA is an additional charge on top of your standard Medicare Part B and Part D premiums, based on your income. The Social Security Administration determines your IRMAA tier by looking at your tax returns from two years prior. This means that in 2026, your 2024 income will determine whether you owe extra.

The 2026 IRMAA brackets outline the income thresholds at which these surcharges apply. If your modified adjusted gross income (MAGI) exceeds a certain limit, you’ll pay more for Medicare coverage. The higher your income, the higher your monthly premium.

While the exact 2026 numbers aren’t finalized yet, inflation adjustments mean these brackets will likely shift upward. However, even a modest raise in thresholds may not protect retirees from crossing into a higher bracket—especially if they’ve had large withdrawals from retirement accounts or received unexpected income.

Why Federal Employees Should Pay Close Attention

If you’re a federal retiree or approaching retirement, IRMAA can have a significant impact on your budget. Many federal employees receive a comfortable pension from the FERS system, plus income from the Thrift Savings Plan (TSP), Social Security, and possibly other investments.

These income streams, while essential, can push you into higher IRMAA brackets if not carefully managed. That’s where strategic planning becomes crucial—especially in the years before and after retirement.

We’ve seen clients unintentionally increase their Medicare premiums by thousands of dollars annually simply because they didn’t account for how distributions, capital gains, or bonuses would affect their IRMAA status.

Using TSP Calculator Growth to Your Advantage

One of the most effective tools for retirement planning is understanding how your investments in the TSP will grow over time. The TSP calculator growth feature helps you project your account’s future balance based on contributions, expected rates of return, and years until withdrawal.

Why does this matter for IRMAA? Because your TSP withdrawals count toward your MAGI. Knowing your projected growth allows you to plan withdrawals strategically—spreading them out over multiple years or delaying them in a way that keeps you in a lower IRMAA bracket.

For example:

  • If your TSP calculator shows that your balance will hit a certain milestone by age 67, you might choose to take smaller distributions earlier to avoid large required minimum distributions (RMDs) later, which could push you into higher 2026 IRMAA brackets.

  • Conversely, if you expect to be in a low-income year before 2026, you might accelerate certain withdrawals to take advantage of lower tax and IRMAA exposure.

Planning Beyond the Numbers

At Federal Pension Advisors, we don’t just crunch numbers—we create a complete picture of your retirement. This includes:

  • Pension and Social Security Coordination – Ensuring your combined income sources work together without triggering unnecessary Medicare surcharges.

  • Tax-Efficient Withdrawal Strategies – Minimizing taxable income to avoid crossing into higher IRMAA brackets.

  • Investment Growth Projections – Using tools like TSP calculator growth to forecast the impact of your decisions on your future finances.

  • Medicare Cost Management – Helping you understand all potential healthcare costs and how to keep them in check.

The Hidden Risk of “One-Time” Income

One of the biggest pitfalls in IRMAA planning is unexpected, one-time income events. These could include:

  • Selling property

  • Cashing out a large portion of your TSP

  • Receiving a lump-sum payout from unused leave

  • Taking a buyout offer

Even if these events are rare, they can cause your income to spike just enough to bump you into a higher IRMAA bracket for the year—meaning you’ll pay higher Medicare premiums for the entire year.

This is why advanced planning is essential. We work with federal employees to spread these events over multiple years when possible, reducing their impact on Medicare costs.

How Federal Pension Advisors Can Help You Prepare for 2026

The year 2026 might seem far off, but decisions you make now will determine which IRMAA bracket you fall into. Since Medicare looks at your income from two years prior, your 2024 and 2025 financial choices are already shaping your 2026 costs.

When you work with Federal Pension Advisors, we:

  1. Review Your Projected Income – Including your pension, TSP, Social Security, and other investments.

  2. Run Multiple Scenarios – Using TSP calculator growth and other planning tools to see how different withdrawal strategies impact both taxes and Medicare premiums.

  3. Create a Year-by-Year Strategy – So you can make proactive choices rather than reacting to costly surprises.

  4. Provide Ongoing Guidance – Because IRMAA brackets, tax laws, and market conditions can change, we keep your plan updated.

Real-World Example

Let’s take “Mark,” a federal retiree with a $40,000 FERS pension, $500,000 in his TSP, and $25,000 in annual Social Security benefits. Without planning, his RMDs at age 73 could push him into a higher IRMAA tier, increasing his Medicare Part B and D costs by over $2,000 annually.

By using the TSP calculator growth tool, we projected his account value, planned early partial withdrawals, and balanced his income streams to keep him under the threshold. The result? Mark saved thousands in Medicare premiums while still enjoying the retirement lifestyle he wanted.

Your Next Step

If you’re a federal employee or retiree, the 2026 IRMAA brackets aren’t just numbers—they’re a reminder that every income decision you make can affect your healthcare costs. The good news? With the right strategy, you can often avoid paying more than necessary.

At Federal Pension Advisors, we specialize in guiding federal employees through these complexities. We combine retirement income planning, tax strategy, and healthcare cost management into one clear, actionable plan.

Don’t wait until 2026 to think about IRMAA. By then, your income history will already be set. Start planning now, using tools like TSP calculator growth and expert guidance to keep more of your retirement income in your pocket.

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