Drain the 401(k) and Delay Social Security to 70 to Beat IRMAA

The 2026 IRMAA surcharge adds $2,297 a year in Medicare costs for any married couple whose modified adjusted gross income crosses $218,000. The fix used by high-earning retirees is counterintuitive: drain a traditional 401(k) in the years before the Social Security claim at 70, then claim Social Security at 70. The 8% annual delayed retirement credit pays the tax bill while each year’s withdrawal is sized to the 24% bracket.

A high-earning couple with a large traditional 401(k) walks into a planning meeting planning to claim Social Security at full retirement age. The advisor pushes back, citing the Income-Related Monthly Adjustment Amount, or IRMAA, the surcharge the Centers for Medicare & Medicaid Services has run since 2007. The Medicare bill that arrives years later reflects income reported during the gap, so the strategy has to start before the bill shows up. Spending the 401(k) down in the years before the claim at 70 keeps the future required minimum distribution small enough to stay under the line for a decade, while the 8% delayed retirement credit buys a larger survivor benefit.

What One Surcharge Tier Actually Costs in 2026

Medicare’s standard 2026 Part B premium is $202.90 per month for beneficiaries who sit below the first IRMAA threshold. For the 8% of high-income beneficiaries, the surcharge layers on top of that base, with a Part B and a Part D component and the same modified adjusted gross income determining both. The Part B annual deductible for 2026 is $283, up $26 from $257 in 2025.

The 2026 brackets, published by the 2026 Medicare Parts A and B premiums and IRMAA surcharge schedule from the Centers for Medicare & Medicaid Services on November 14, 2025, set the first surcharge tier at MAGI from $218,001 to $274,000 for joint filers, adding $81.20 per person per month to the Part B premium and $14.50 per person to the Part D premium. The next tier ($274,001 to $342,000) more than doubles the Part B surcharge to $202.90 per person, with a Part D surcharge of $37.50. The third tier ($342,001 to $410,000) raises the Part B surcharge to $324.60 and the Part D surcharge to $60.40. Above $410,000 of MAGI, the bracket schedule adds another $121.70 in Part B and $22.90 in Part D per tier.

Crossing the $218,000 line by a single dollar triggers a $2,297 combined surcharge for a couple, per Income Lab’s 2026 IRMAA guide, and that figure recurs every year MAGI stays above the threshold. A couple whose MAGI sits in the tier that starts just above $410,000 pays $12,710 a year in surcharges, per the same source’s summary of the 2026 brackets.

The Counterintuitive Sequence

Conventional retirement advice says defer the 401(k) and claim Social Security as soon as the break-even math allows, so the portfolio can compound untouched. The IRMAA math inverts that. The required minimum distribution, which the IRS Uniform Lifetime Table starts at age 73 with a 26.5 life-expectancy divisor, is a forced taxable withdrawal that flows directly into modified adjusted gross income. A larger pre-tax pile produces a larger RMD, and the gap between two retirees with similar income is set by how much the pile has been drawn down by age 73.

The counter-sequence uses the years between early retirement and the delayed claim at 70 to spend down the 401(k) at controlled tax rates, shrink the RMD denominator, and lift the Social Security base by 8% for each year of delay. Lock the 8% delayed retirement credit by waiting until 70, per the delayed retirement credit rate table by birth year for those born in 1943 or later. That credit applies to the larger of the two benefits, which becomes the survivor’s check when one spouse dies.

Sizing Withdrawals in the Pre-Claim Window

The 2026 brackets give the strategy room. The 24% marginal rate for married filing jointly starts at taxable income above $211,400, and the 22% rate starts at $100,800, per the 2026 federal tax bracket and standard deduction update.

The 2026 standard deduction for joint filers is $32,200, up from $31,500 in tax year 2025 under the One Big Beautiful Bill Act, per the same IRS release. A couple can pull from a traditional 401(k) up to a level that keeps modified adjusted gross income just below the $218,000 first-tier line, while staying inside the 24% bracket. Repeating that pattern in the years before the claim at 70 pulls the pre-tax balance down to a level that produces a far smaller RMD at 73. The tax bill averages the low 20s across those years, and never crosses the 32% bracket that starts at $403,550 of taxable income for joint filers.

Each 401(k) withdrawal has to be modeled against every other source of MAGI, from taxable Social Security to capital gains, and the list of items the Social Security Administration counts toward the calculation is long. A 2026 conversion or a 2026 capital gain can push the year-2028 IRMAA tier up by one level, per the Income Lab IRMAA planning guide. The two-year lookback turns a single bad income event into a Medicare surcharge for two years.

A single Roth conversion executed in 2026 affects IRMAA premiums in 2028. A retiree who is below the IRMAA threshold in 2026 and planning a multi-year Roth conversion ladder has to project MAGI for every year in the sequence and check the IRMAA impact two years downstream for each one. A five-year Roth conversion ladder starting in 2026 requires checking IRMAA implications for 2028, 2029, 2030, 2031, and 2032. Each year’s conversion amount affects a different premium year, and the bracket changes that took effect under the One Big Beautiful Bill Act shift the projections further. The two years before Medicare begins are the most valuable Roth conversion years in a retirement, since the income decisions made there set the first IRMAA tier and the conversion itself is IRMAA-free.

• Traditional 401(k) and IRA distributions, including RMDs
• Roth conversions in the year they are completed
• Taxable portion of Social Security benefits
• Capital gains, including mutual fund distributions
• Pension, rental, and business income
• Tax-exempt interest

Why the Delayed Credit Becomes the Survivor Benefit

For every year a retiree waits past full retirement age, the Social Security benefit rises by 8% on a 12-month-rate basis, per the delayed retirement credit rate table by birth year for those born in 1943 or later. The credit stops at age 70. A couple who would start their benefits at 67 instead waits three more years and claims at 70, locking in three years of 8% credits on each check, before the 2.8% cost-of-living adjustment the SSA applied for 2026.

Social Security is a promise kept, and the annual cost-of-living adjustment is one way we are working to make sure benefits reflect today’s economic realities and continue to provide a foundation of security.

That quote is from Frank J. Bisignano, then-Commissioner of Social Security, in the 2.8 percent 2026 cost-of-living adjustment announcement. That adjustment lifts the average retirement benefit by about $56 a month, and the lift stacks on top of the delayed credit rather than replacing it. The combined lift is why the 8% rate is the most generous raise a retiree can guarantee from a federal program. The pre-tax withdrawals taken in the years before the claim at 70 effectively buy a larger joint-and-survivor annuity at a discount, because the larger of the two checks is the one that continues after one spouse dies.

The penalty for getting the sequence wrong is concrete. A couple whose required minimum distributions and Social Security combine to push MAGI past $274,000 faces a Part B surcharge of $202.90 per person per month, with a Part D surcharge of $37.50, and the bill recurs every year MAGI stays above the threshold.

RMD Math, in Two Lines

Capital Group’s reference table for the IRS Uniform Lifetime Table illustrates the mechanic. A retired 401(k) participant at age 76 with a $262,000 balance divides the balance by the 23.7 life-expectancy factor for that age and gets an $11,054.85 required distribution, per Capital Group’s worked example. The same divisor mechanic at age 73 uses 26.5, and the divisor falls each year as the participant ages, which means a smaller balance at 73 produces a smaller required distribution in every later year of the schedule.

The draw-down matters in dollar terms because the RMD is taxable. A retiree who draws down a traditional 401(k) for several years before age 73 faces a far smaller pre-tax pile at 73 than a retiree who let the same balance compound untouched. The compounding effect applies at every balance level, and a smaller pre-tax pile at 73 means a smaller RMD in every later year of the Uniform Lifetime Table schedule. The two retirees will report different MAGI for the rest of their lives, and the difference in MAGI is the difference in IRMAA tier.

Roth conversions work the same way. A conversion before age 73 lowers the future RMD denominator the same way an outright withdrawal does, without forcing cash out of tax-advantaged shelter, and the converted dollars grow tax-free in the Roth account. The conversion adds to MAGI in the year it is completed, however, so the two-year lookback has to be checked before the conversion is sized. The optimal sequence often front-loads conversions in the two years before Medicare begins, when the income is below the IRMAA threshold and the conversion itself is IRMAA-free.

The widow penalty is a separate trap. A couple comfortably below the $218,000 joint threshold can find the surviving spouse pushed two tiers higher as a single filer, with no change in actual income, because the single brackets are roughly half the joint brackets through the middle tiers.

Three Practical Steps to Map and Lock the Sequence

The strategy has three components, and skipping any one of them gives the IRMAA tier back. The first is a multi-year MAGI map, the second is a sized 401(k) withdrawal, and the third is a Roth conversion layered in for any remaining headroom. Each step is mechanical, and the sequence has to be locked in writing before the first withdrawal clears the account.

The first component is the multi-year MAGI map. The map runs from age 65, when Medicare begins, through age 73, when the first required minimum distribution hits, and includes every source of MAGI from the categories enumerated above. Roth IRA distributions and reverse mortgage loan advances do not count toward the calculation, per the same source. The map has to be updated every January, because the IRS inflation adjustment to the IRMAA brackets, the standard deduction, and the 24% ceiling lands at different rates in different years.

The second and third components share the same constraint: every dollar of additional MAGI is checked against the next IRMAA tier. A conversion that pushes MAGI $3,000 over the line triggers $4,752 in additional Medicare premiums, and that figure doubles to $9,504 for a married couple, per the same source’s worked example. The surcharge recurs for two years under the lookback.

1. Map MAGI against the $218,000 first-tier threshold for every year between Medicare enrollment at 65 and age 73, including any taxable brokerage income.
2. Size each 401(k) withdrawal to fill the 24% bracket without crossing the IRMAA line, then run a parallel projection that layers in Roth conversions for any remaining headroom.
3. Lock the Social Security claim at 70 unless health or longevity assumptions change, and treat the 8% delayed retirement credit on the larger benefit as the survivor’s check.

Risks the Strategy Does Not Remove

The 2026 IRMAA brackets, the 24% ceiling, and the standard deduction each adjust to inflation at different rates. A couple who pulls from a 401(k) at 24% one year and at 22% the next, on a Roth conversion that the planning source describes as a five-year ladder, faces a moving target each January. The IRS publishes the next round of inflation adjustments every October, and the map has to be redrawn with the new figures.

The OASI Trust Fund itself is on a different clock. The 2026 Trustees Report projects the OASI Trust Fund will pay 100 percent of total scheduled benefits until the fourth quarter of 2032, at which point the fund’s reserves will be depleted and continuing program income will be sufficient to pay 78 percent of total scheduled benefits, a risk detailed in the Budgy App analysis of the Social Security trust fund depletion timeline.

The appeal pathway exists. Form SSA-44 lets a beneficiary ask the Social Security Administration to use a more recent year’s income when a qualifying life-changing event has caused income to drop, and the events that qualify include marriage, divorce, death of a spouse, work stoppage or reduction, loss of income-producing property, loss of pension income, and an employer settlement payment. The approval rate for legitimate life-changing events is high, per Income Lab’s 2026 IRMAA planning guide, and the appeal is one of the most underused planning tools in the Medicare book. A couple who retires in 2025 and whose 2024 tax return still reflects a full year of employment income can file an SSA-44 with 2025 income documentation, and the SSA can use the more recent year instead, eliminating or reducing the surcharge.

The market and longevity risks sit on top. A 401(k) draw-down that assumes an above-average annual return will outlive itself if the portfolio underperforms, and the sequence that looked right in 2026 has to be re-run every January with the actual balance. The 8% delayed retirement credit is only worth the wait if at least one spouse lives past the break-even age, and health and longevity assumptions are the part of the plan the source itself flags as the variable that re-runs the whole sequence.

Frequently Asked Questions

What is the 2026 IRMAA threshold for married filing jointly?

For 2026, the first IRMAA surcharge tier starts at modified adjusted gross income of $218,001 for joint filers, per the Centers for Medicare & Medicaid Services’ November 14, 2025 fact sheet on Medicare Parts A and B premiums and deductibles. Below that line, no surcharge. The 2026 standard Part B premium is $202.90 per month, and the Part B annual deductible is $283, up $26 from 2025.

When do IRMAA surcharges actually start?

The Social Security Administration uses a two-year MAGI lookback when setting the surcharge, so the Medicare premium a beneficiary pays at 67 reflects modified adjusted gross income reported at 65. That timing is what makes the pre-claim 401(k) draw-down the only window where a retiree can shape Medicare premiums two years before the bill shows up.

How much larger is the Social Security benefit at 70 versus 67?

For those born in 1943 or later, the delayed retirement credit is 8% per year on a 12-month-rate basis, per the Social Security Administration’s delayed retirement credit schedule. The credit applies for each year of delay past full retirement age and stops at 70, and the larger of the two benefits is the one that continues after one spouse dies. The 2.8% 2026 cost-of-living adjustment stacks on top of the credit rather than replacing it, per the SSA’s October 24, 2025 press release.

Does a Roth conversion help or hurt IRMAA?

It does both, depending on the year. A Roth conversion adds to modified adjusted gross income in the conversion year and flows into the IRMAA calculation two years later, so a large conversion at 65 can push a couple into the first IRMAA tier at 67. The same conversion, however, shrinks the future required minimum distribution and the future MAGI, so over a multi-year window the strategy is often net positive, per Income Lab’s 2026 IRMAA planning guide.

What happens to IRMAA if one spouse dies?

The surviving spouse files as single starting the year after the death, and the IRMAA brackets for single filers are roughly half the joint brackets through the middle tiers, with a smaller differential at the top. A couple comfortably below the $218,000 joint threshold can find the survivor pushed two tiers higher, with no change in actual income, and the surviving spouse’s larger Social Security check from the 8% delayed credit partially offsets the spike.

Can a couple appeal an IRMAA surcharge?

Yes, on Form SSA-44, when a qualifying life-changing event causes income to drop. Qualifying events include marriage, divorce, death of a spouse, work stoppage or reduction, loss of income-producing property, loss of pension income, and an employer settlement payment, per Income Lab’s 2026 IRMAA guide. The appeal lets the Social Security Administration use a more recent year’s income, and the approval rate for legitimate events is high.

Disclaimer: This article is for informational purposes only and does not constitute financial, tax, or legal advice. Retirement planning decisions should be reviewed with a qualified financial advisor, tax professional, or estate attorney. Figures cited are accurate as of June 2026 and may change with annual IRS, SSA, and CMS updates.