Understanding Medicare's Income-Related Monthly Adjustment Amount for 2025
IRMAA is a tax on income through Medicare. It increases costs and lowers Social Security benefits, find out what IRMAA 2025 can be.
With the Bureau of Labor reporting that the Consumer Price Index for Urban Consumers (CPI-U) for August is 314.796, Medicare's unofficial 2025 IRMAA Thresholds should increase by over 3.00%.
The official definition of IRMAA, according to Social Security's Program Operations Manual system (POMs) is:
"Who have modified adjusted gross income (MAGI) above the threshold for their tax filing status pay an IRMAA in addition to the monthly premium."
IRMAA is simply a surcharge or tax on your income through Medicare that is easily avoidable with proper financial planning.
IRMAA is comprised of 5 different income levels that gradually increase in surcharges once the thresholds have been reached.
The 2025 IRMAA brackets represent an increase of approximately 3% from 2024. Below is a comparison of the income thresholds for both years.
| Individual MAGI | Couples MAGI |
|---|---|
| < $103,000 | < $206,000 |
| $103,000 to $129,000 | $206,000 to $258,000 |
| $129,000 to $161,000 | $258,000 to $322,000 |
| $161,000 to $193,000 | $322,000 to $386,000 |
| $193,000 to $500,000 | $386,000 to $750,000 |
| > $500,000 | > $750,000 |
| Individual MAGI | Couple MAGI |
|---|---|
| < $106,000 | < $212,000 |
| $106,000 to $133,000 | $212,000 to $266,000 |
| $133,000 to $166,000 | $266,000 to $332,000 |
| $166,000 to $199,000 | $332,000 to $398,000 |
| $199,000 to $500,000 | $398,000 to $750,000 |
| > $500,000 | > $750,000 |
Notice that the first tier threshold increased from $103,000 to $106,000 for individuals and from $206,000 to $212,000 for couples. This provides more breathing room before IRMAA surcharges kick in.
According to the Medicare Modernization Act of 2003 (MMA), the IRMAA Thresholds are to adjust annually based on:
"The percentage (if any) by which the average of the Consumer Price Index for all urban consumers (United States city average) for the 12-month period ending with August of the preceding calendar year exceeds such average for the 12-month period."
Please note that Congress also specified that "if any dollar amount after being increased is not a multiple of $1,000, such dollar amount shall be rounded to the nearest multiple of $1,000".
Ultimately, the CPI-U grew by 3.12% from last year which means the IRMAA Thresholds should increase by that much too.
BUT, remember the rule created by Congress, the IRMAA Thresholds are supposed to be "rounded to the nearest multiple of $1,000".
If the Centers for Medicare Services (CMS) follows current federal law the IRMAA Thresholds should increase by at least 3.00% (remember rounding).
If the CPI-U increases then the IRMAA Thresholds will increase, but if the CPI-U decreases then the IRMAA Thresholds will remain the same. There is no provision for thresholds to decrease, which protects beneficiaries from sudden premium increases during deflationary periods.
IRMAA is short for Medicare's Income Related Monthly Adjustment Amount which is a surcharge on your Medicare Part B and Part D coverage if you have too much income while in retirement.
Understanding how IRMAA is calculated each year is crucial for retirement planning.
The only way to ensure that IRMAA is never a part of your retirement is to be able to generate income from sources that don't count towards your MAGI. Learn more about strategies to reduce your MAGI.
For more information on IRMAA and how to plan for it, please contact an IRMAA Certified Professional in your area.
Proactive planning can help you avoid or minimize IRMAA costs. Key strategies include:
Our Healthcare Retirement Planner software helps financial professionals calculate IRMAA costs and plan for Medicare surcharges.
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