{"id":7152,"date":"2026-06-13T20:14:48","date_gmt":"2026-06-13T20:14:48","guid":{"rendered":"https:\/\/www.fintechpulse8.com\/?p=7152"},"modified":"2026-06-13T20:14:48","modified_gmt":"2026-06-13T20:14:48","slug":"suze-orman-warns-one-ira-move-can-spike-medicare-costs","status":"publish","type":"post","link":"https:\/\/www.fintechpulse8.com\/?p=7152","title":{"rendered":"Suze Orman warns one IRA move can spike Medicare costs"},"content":{"rendered":"
<\/p>\n
Retirees who tap a traditional individual retirement account often miss a hidden cost that shows up two years down the road on their Medicare bill. <\/p>\n
The Social Security Administration uses your modified adjusted gross income from two years before to decide whether a Medicare premium surcharge applies.<\/p>\n
Every dollar withdrawn from a traditional 401(k) or IRA is included in that calculation, while qualified withdrawals from a Roth account are not.<\/p>\n
Personal finance commentator Suze Orman has flagged this gap for years, and the math behind her warning has only grown sharper this year.<\/p>\n
Higher 2026 income-related monthly adjustment amount (IRMAA) surcharges and a richer base Part B premium have made the hit more painful for retirees crossing an income threshold.<\/p>\n
How traditional IRA withdrawals trigger the IRMAA surcharge<\/h2>\n
The IRMAA adds to standard Medicare Part B and Part D premiums for higher-income beneficiaries.<\/p>\n
The Social Security Administration applies IRMAA based on your tax return filed two years before the premium year, creating a delayed timing trap.<\/p>\n
A 2026 income spike from a traditional IRA distribution is reflected on the 2028 premium bill, and the surcharge applies to every month of that year.\u00a0<\/p>\n
On a Suze School episode of the Women & Money podcast, revisiting the Roth five-year rule, Orman said income from a retirement account counts toward both taxable Social Security and the Medicare premium calculation.<\/p>\n
Why the 2026 IRMAA brackets make one withdrawal painful<\/h2>\n
The standard Medicare Part B premium climbed to $202.90 per person per month in 2026, up nearly $18 from the 2025 base level,according to the Centers for Medicare & Medicaid Services.\u00a0<\/p>\n
IRMAA surcharges layer on top, once modified adjusted gross income (MAGI) tops $109,000 for single filers or $218,000 for joint filers, the agency noted.<\/p>\n
Total Part B premiums under IRMAA in 2026 range from $284.10 at the first tier to $689.90 at the top tier, per person.\u00a0<\/p>\n
More Medicare\/Medicaid:<\/strong><\/p>\n
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AARP raises a red flag on Social Security, Medicare<\/strong><\/li>\n
If your Medicare plan was canceled, do this now<\/strong><\/li>\n
AARP explains huge new Medicare change coming soon<\/strong><\/li>\n<\/ul>\n
On her Women & Money podcast episode breaking down the Roth five-year rule, Orman said she and her wife, KT, pay around $526 per month for Medicare Part B, based on their household income.<\/p>\n
Part D surcharges add another $14.50 to $91.00 each month, and the brackets use a cliff structure with no gradual phase-in across thresholds.<\/p>\n
One dollar over a bracket boundary triggers the full surcharge for that tier, and the cost recurs for every month of the affected premium year. The top tier kicks in above $500,000 of MAGI for single filers and $750,000 for joint filers, CMS noted, and the figure is frozen.<\/p>\n\n
A poorly timed retirement withdrawal could trigger higher Medicare premiums for an entire year under 2026 IRMAA rules.<\/p>\n
Why Orman points to Roth accounts as the only clean fix<\/h2>\n
Qualified Roth distributions never count toward MAGI, so they cannot push a retiree across an IRMAA cliff, regardless of withdrawal size or timing. <\/p>\n
Required minimum distributions (RMD), which begin at age 73 under SECURE 2.0 rules, also do not apply to Roth IRAs during the owner\u2019s lifetime.<\/p>\n
A 24\/7 Wall St scenario shows a married couple whose MAGI crosses an IRMAA cliff after pulling an extra $60,000 from a traditional IRA. <\/p>\n
Depending on the household’s tier, the surcharge can add roughly $1,700 to $6,700 in additional combined Part B and Part D premiums for the year.<\/p>\n
\n
Income from a retirement account counts towards taxable income towards your Social Security. Also, your Medicare premium amount. So you\u2019re better off with a Roth IRA. Always<\/p>\n<\/blockquote>\n
Drawing the same $60,000 from a qualified Roth account keeps MAGI untouched, so the couple sidesteps the surcharge entirely.<\/p>\n
RMDs from traditional accounts grow as a percentage of the balance each year, which means Medicare exposure tends to worsen with age for affected retirees.<\/p>\n
Traditional IRA withdrawals also increase the taxable portion of Social Security benefits, compounding the hit for retirees with mixed income streams, Orman noted.<\/p>\n
Ed Slott says fearing IRMAA cannot stop a Roth conversion<\/h2>\n
Retirement tax expert Ed Slott has argued that the IRMAA penalty from a Roth conversion is brief and should not block long-term planning. He told one client, \u201cI\u2019d rather you be angry for one year than for the rest of your life,\u201d to frame the trade-off.<\/p>\n
Slott noted that the few hundred dollars in extra monthly premiums from one conversion year pale in comparison to decades of taxable IRA distributions and surcharges.\u00a0<\/p>\n
He has built much of his retirement-planning curriculum around shifting savers into Roth accounts before RMDs begin, since RMDs from traditional accounts would otherwise inflate their taxable income for the rest of their lives.<\/p>\n
What the IRMAA cliff means for retirees with traditional balances<\/h2>\n
The IRMAA cliff turns one traditional IRA withdrawal into a delayed premium hit that surfaces on the Medicare bill two years later.\u00a0<\/p>\n
Orman has framed qualified Roth distributions as exempt from Medicare’s surcharge calculation, regardless of the withdrawal amount. Slott has argued that absorbing a short conversion penalty now beats decades of recurring premium hits later.\u00a0<\/p>\n
Medicare’s 2026 system applies higher premiums once income exceeds a set threshold. Orman and Slott have both pointed to Roth conversions completed before required distributions begin as the mechanism retirees with sizable traditional balances use to reduce future IRMAA exposure.<\/p>\n
Related: Suze Orman, AARP flag a retirement trap<\/strong><\/p>\n
Retirees who tap a traditional individual retirement account often miss a hidden cost that shows up two years down the road on their Medicare bill. The Social Security Administration uses… <\/p>\n","protected":false},"author":1,"featured_media":7153,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[246],"tags":[449,2555,2243,233,4221,2897,4220,583],"class_list":["post-7152","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-popular","tag-costs","tag-ira","tag-medicare","tag-move","tag-orman","tag-spike","tag-suze","tag-warns"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/7152","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7152"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/7152\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/7153"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7152"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7152"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7152"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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