Retired Couple Faces $6,900 IRMAA Surcharge After $175,000 Gain

A retired couple faced a surprise $6,900 Medicare surcharge after realizing a $175,000 capital gain from rebalancing their taxable portfolio. This gain pushed their modified adjusted gross income (MAGI) into the $274,000 to $342,000 range, causing them to jump two IRMAA tiers. The IRMAA surcharge operates as a cliff, meaning a small increase in income results in a full surcharge for both spouses for the year. This is significant as their Medicare Part B premium would rise from $202.90 to $689.90 per month at the highest tier, affecting their retirement finances.