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Imagine getting a note like this:
“My husband and I both retired this spring, and we just started Medicare. The premiums coming out of our Social Security are $284.10 a month each, not the $202.90 everybody talks about.
Social Security says it’s because of our income in 2024, when we were both still working. That income is gone. Can we fight this?”
Let’s call her Lisa. She and her husband both have Part D drug plans, and their modified adjusted gross income was about $250,000 in 2024.
Lisa isn’t imagining things. For 2026, the standard monthly Part B premium is $202.90.
But married couples filing jointly with modified adjusted gross income over $218,000 and up to $274,000 pay $284.10 each, according to the Centers for Medicare & Medicaid Services (1). Because they have Part D drug coverage, they also pay an extra $14.50 a month each (1).
That’s $95.70 a month more per person. For the couple, it’s $191.40 a month, or about $2,297 a year.
What does 2024 income have to do with anything? For 2026 premiums, the Social Security Administration says, “Generally, this information is from a tax return filed in 2025 for tax year 2024” (2).
These surcharges “affect roughly 8% of people with Medicare Part B,” CMS says (1). They’re aimed at people with higher incomes. Lisa and her husband aren’t high-income anymore.
I’ve been a CPA since 1981, and this is one of the most fixable surprises new retirees run into. I’m a Social Security/Medicare recipient and I’ve run into this situation myself.
Which is why I know that Social Security has a form for exactly this situation (3).
Here are 5 things Lisa needs to know.
1. Retiring counts as a “life-changing event”
Form SSA-44 lets you “request a reduction in your income-related monthly adjustment amount” when a major life-changing event has lowered your income (3).
One of the events on the list is “Work Stoppage or Reduction,” which the form describes this way: “You or your spouse stopped working or reduced the hours that you work” (3). Others include marriage, divorce, the death of a spouse and the loss of pension income (3).
Getting the surcharge removed is step one. Step two is keeping it from coming back.
“Distributions from a traditional IRA are fully or partially taxable in the year of distribution,” the IRS says (5). So a big withdrawal in a single year can push your income right back over the line.
That’s one of many planning jobs you’ll face as you approach retirement, which is why this is the time a second set of eyes pays off.
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2. You’ll need proof, but it’s simple
For a work stoppage, the form asks for an original signed statement from your employer or your pay stubs. If you don’t have that proof, Social Security will accept your signed statement on the form, made under penalty of perjury (3).
Other events need other documents. A death of a spouse, for example, calls for a certified copy of the death certificate (3).
3. Ask Social Security to use this year’s income
The form lets you pick a more recent year. It “must be more recent than the year of the tax return information we used,” the form says (3). The life-changing event has to happen in that year or earlier (3).
For Lisa, that means giving Social Security an estimate of the couple’s 2026 income. If it comes in at $218,000 or less on a joint return, the standard premium applies (1). If the estimate turns out wrong, Social Security says it may make “corrections later including retroactive assessments or refunds” (3).
In the meantime, that extra $191 a month has to come from somewhere.
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4. Filing is easier than you’d think
You can sign in to your Social Security account and submit the form online, fax or mail it with your evidence to a Social Security office, or call 1-800-772-1213, according to the agency (4). (When I completed my form, I simply dropped it off at the local Social Security office.)
And you don’t need to file a formal appeal. Social Security says, “You don’t need to file an appeal if you’re requesting a new decision because you experienced one of the events listed,” as long as that event lowered your income (2).
5. Watch for next year’s notice, too
Here’s the part that trips people up. The surcharge uses a tax return from two years back: For 2026 premiums, that’s generally 2024 (2).
Follow that pattern, and 2027 premiums will generally look at 2025, another year of full paychecks for Lisa and her husband. If a surcharge notice for 2027 arrives, they should be ready to file again with their lower income.
My honest take
Medicare’s income surcharge isn’t a penalty for being rich. For new retirees, it’s mostly a timing problem. The government is looking in the rearview mirror at paychecks that have already stopped.
The fix is one form and a little paperwork. Don’t just pay the higher bill and grumble.
You worked for that retirement. Don’t let a two-year-old tax return take a bite out of it.
Sources: 1. Centers for Medicare & Medicaid Services; 2. Social Security Administration; 3. Social Security Administration; 4. Social Security Administration; 5. IRS
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