There is a double hit in retirement that blindsides people. The same income can get your Social Security taxed, and then turn around and raise your Medicare premium.
Hit one: your Social Security gets taxed
Social Security is not automatically tax-free. The IRS looks at something called your combined income, and the math is simple.
Take your other income — a pension, 401(k) withdrawals — and add half of your Social Security check. That total is your combined income.
- Single: over $25,000 and part of your check gets taxed. Over $34,000 and up to 85% of it can be.
- Married filing jointly: same idea, the lines are $32,000 and $44,000.
not a tax rate. It means up to 85% of your Social Security check gets counted as taxable income. What you actually pay depends on your bracket.
Hit two: your Medicare premium goes up
That same income can push your Part B premium up through a surcharge called IRMAA.
Heads up though — this one lands on fewer than one in ten people on Medicare. Good problem to have, but still a problem.
Most people pay $202.90 a month for Part B in 2026. But once the income on your tax return crosses $109,000 single or $218,000 married filing jointly, Medicare adds a surcharge on top. At the very top, the whole Part B bill can reach $689.90 a month.
Why it catches people
The same income can cost you twice — once on your tax return, and once on your Medicare premium.
And Medicare looks back two years, so the second hit shows up late, long after the year that caused it. That is what makes it a surprise.
What to do about it
If you are planning a large withdrawal, know where both sets of lines fall before you pull the money. Sometimes changing the timing is the whole difference.
This is general education, not tax advice — run your own numbers with your tax person. Just know the lines are there, because almost nobody warns you about the second one.
Want to know where you land on the Medicare side? Call or text me at 941-412-2362.
Educational only. Not connected with or endorsed by the U.S. government or the federal Medicare program.
Falcon Life and Health is not connected with or endorsed by the United States government or the federal Medicare program. We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.