Most people know a required minimum distribution adds to their tax bill. Fewer know it can also raise their Medicare premium. The money you pull from a traditional IRA or 401(k) counts as income, and if that income crosses a certain line, Medicare charges you more for the same coverage. Here is how that works, and how to plan around it.
What is a required minimum distribution?
A required minimum distribution, or RMD, is the amount the government makes you take out of certain retirement accounts each year once you reach a set age.
The rule applies to traditional IRAs and most workplace plans, like a 401(k) or 403(b). It generally does not apply to Roth IRAs. And starting in 2024, Roth 401(k)s and similar workplace Roth accounts are no longer subject to lifetime RMDs for the original owner.
The reason for the rule is simple. You never paid tax on the money going into those traditional accounts. The government waited. The RMD is how it finally collects.
Under current rules, you must start taking RMDs at age 73. If you were born in 1960 or later, your start age is 75.
You can delay your very first RMD until April 1 of the year after you turn 73. But that means taking two distributions in one year, which stacks the income. For most people, taking the first one on time is the cleaner choice.
Miss an RMD and the penalty is steep: 25% of the amount you should have withdrawn, dropping to 10% if you fix it within two years. So this is not optional.
How an RMD raises your tax bill
Every dollar of a traditional RMD counts as ordinary income. It lands on your tax return the same way a paycheck would.
Say Linda is 74 and single. She has $600,000 in a traditional IRA. Her RMD this year is a little over $23,000. (That figure is an example, based on the IRS life expectancy table for her age.)
That $23,000 gets added on top of her Social Security and any other income. It can push her into a higher tax bracket. It can also make more of her Social Security benefit taxable.
That part most people expect. The next part catches them off guard.
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How an RMD raises your Medicare premium
Here is the piece that surprises people. Your income also sets your Medicare premium.
Most people pay the standard Part B premium, which is $202.90 a month in 2026. But if your income is above a certain level, Medicare adds a surcharge on top. That surcharge has a name: the Income-Related Monthly Adjustment Amount, or IRMAA.
IRMAA applies to both Part B (doctor visits) and Part D (prescription drugs). The more income you report, the bigger the surcharge.
And here is the catch. A large RMD can be the very thing that pushes your income over an IRMAA line.
So your RMD does double duty. It raises your tax bill, and it can raise what you pay Medicare two years later.
What income does Medicare actually look at?
Medicare does not use this year’s income. It looks back two years.
Your 2026 premium is based on your income from your 2024 tax return. Your 2028 premium will be based on your 2026 income. This two-year delay is why so many people get caught. The bill shows up long after the income did.
The exact number Medicare uses is your modified adjusted gross income, or MAGI. For IRMAA, that is your adjusted gross income plus any tax-exempt interest, like interest from municipal bonds. Your full RMD is part of that figure.
The 2026 IRMAA brackets
Here is what Medicare charges in 2026, based on your 2024 income. The first column is for single filers. The second is for married couples filing jointly.
| 2024 income (single) | 2024 income (married, joint) | 2026 Part B premium (per person) |
|---|---|---|
| $109,000 or less | $218,000 or less | $202.90 |
| Up to $137,000 | Up to $274,000 | $284.10 |
| Up to $171,000 | Up to $342,000 | $405.80 |
| Up to $205,000 | Up to $410,000 | $527.50 |
| Up to $500,000 | Up to $750,000 | $649.30 |
| Above $500,000 | Above $750,000 | $689.90 |
On top of these Part B amounts, higher-income beneficiaries also pay a Part D surcharge, which ranges from about $14.50 to $91.00 a month in 2026, added to whatever their drug plan already costs.
A quick note: these figures come from the official 2026 Medicare premium release. Always confirm your own bracket against Medicare.gov, since your situation may differ.
The cliff that costs you over a thousand dollars
IRMAA has a feature that makes it sting more than a normal tax. It is a cliff, not a slope.
With income tax, earning one more dollar costs you tax only on that dollar. IRMAA does not work that way. Cross a bracket line by a single dollar, and you pay the full higher premium for the entire year.
Look at the jump from the first bracket to the second. A single filer at $109,000 pays $202.90 a month. At $109,001, just one dollar more, they pay $284.10 a month. That is about $974 more for the year for Part B alone, or about $1,148 once you add the Part D surcharge, triggered by one dollar.
For a married couple where both spouses are on Medicare, the surcharge applies to each of them. So one dollar over the line can mean about $1,948 more for Part B, or roughly $2,297 for the household once Part D is included.
This is why a single large RMD, or an RMD plus a one-time event like selling a property, deserves a careful look before year-end.
A real-world example
Let me put the pieces together with one example. The numbers here are illustrative, but they show how the trap works.
Say Robert and Carol are both 75 and file jointly. Their 2024 income from Social Security, a pension, and some interest came to $215,000. That is just under the first IRMAA line of $218,000. Good so far.
Then Robert took his RMD. His IRA is large, so his RMD was $40,000. That pushed their 2024 income to $255,000.
That number lands them in the next bracket. So in 2026, instead of paying the standard premium, each of them pays $284.10 a month for Part B. For the two of them, that is about $1,948 in extra Part B premiums over the year, or roughly $2,297 once the Part D surcharge is included, on top of the higher income tax the RMD already caused.
They did nothing wrong. They simply took a required distribution. But because no one warned them about the two-year lookback, the Medicare bill arrived as a surprise.
This is the kind of trade-off that is hard to see on your own. It often takes someone running the numbers across taxes, Social Security, and Medicare together to catch it before it happens.
How to plan around the RMD and IRMAA trap
The good news: with some planning, you have real options. Here are the main ones.
Start drawing down earlier. If you take some money out of your traditional accounts in your 60s, before RMDs begin, your account is smaller when RMDs do start. Smaller account, smaller RMD, less pressure on your IRMAA line later.
Consider Roth conversions, carefully. Moving money from a traditional IRA to a Roth means paying tax now, but Roth withdrawals later do not count toward your income. That can keep future RMDs and IRMAA lower. The timing matters, though, because a conversion raises your income in the year you do it, which can trigger IRMAA two years later. This is a balancing act worth modeling before you act.
Use a qualified charitable distribution. If you give to charity, a qualified charitable distribution, or QCD, lets you send money straight from your IRA to a charity. It counts toward your RMD, but it does not count as income to you. So it satisfies the requirement without raising your MAGI. In 2026, you can give up to $111,000 this way (up from $108,000 in 2025), and you must be at least 70½. (Confirm the current limit with your IRA custodian.)
Watch the bracket lines near year-end. If your income is close to an IRMAA line, even a small move can keep you under it. Knowing exactly where you stand before December 31 is half the battle.
Appeal if you had a life change. IRMAA looks back two years, which can be unfair if your income has since dropped. If you retired, lost a spouse, or had another major life event, you can ask Social Security to use more recent income. The form is SSA-44, and you file it with your local Social Security office.
Why this is worth getting right
These pieces do not live in separate boxes. Your RMD touches your income tax, the tax on your Social Security, and your Medicare premium all at once. A choice that looks smart for one can backfire on another.
That is the real lesson here. Looking at your RMD by itself, just as a tax item, misses half the story. Seeing how it ripples into Medicare two years down the road is what lets you plan instead of react.
For many people, this is where a clear plan, or a tool that models the trade-offs side by side, earns its keep. Being able to see how one decision moves your taxes, your benefits, and your premiums together turns a guessing game into a confident choice.
The bottom line
Your RMD is more than a tax bill. It is income, and that income sets your Medicare premium two years later through IRMAA. A large distribution can push you over a bracket line and add hundreds or thousands of dollars to your premiums, for both spouses, for a full year.
You cannot skip your RMD. But you can plan when and how you take income, so it does not land you in a higher Medicare bracket. The tools are there: earlier withdrawals, Roth conversions, charitable distributions, and a close eye on the bracket lines.
The key is to look ahead, not back. By the time the higher premium shows up, the income that caused it is two years gone.
This article is for educational purposes only and is not personalized financial, tax, legal, or medical advice. Medicare and tax rules change, and your own situation may differ. Confirm your figures with Medicare.gov, SSA.gov, or IRS.gov, or speak with a qualified professional before making decisions.
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