Thinking about the years before 65? The decisions you make then can affect your taxes — and your health care costs — for decades. Many people treat the “gap years” between retirement and Medicare as a soft spot. But with smart planning, you can turn them into an advantage.
Why Medicare & Taxes Are Connected
When you enroll in Medicare (usually at age 65), you’ll pay premiums for Part B (doctor visits, outpatient care) and Part D (prescription drugs). But here’s the catch: those premiums are based on your income.
That’s where IRMAA comes in.
IRMAA stands for Income-Related Monthly Adjustment Amount. It’s an extra charge added to your Medicare Part B and Part D premiums if your income is above certain thresholds.
- In 2025, the standard Part B premium is about $185/month.
- If your income is above $106,000 for single filers or $212,000 for married couples filing jointly, you’ll pay more each month. The more you earn, the higher the surcharge.
- The Social Security Administration checks your tax return from two years ago to decide if you owe IRMAA. That means your 2023 income sets your 2025 Medicare costs.
Example: If you did a large Roth conversion or sold investments in 2023, your Medicare premiums in 2025 could jump by hundreds of dollars per month.
Why the “Gap Years” (Ages ~60–65) Matter
Once you hit 65, you may lose some flexibility. The years just before 65 are often ones when:
- You’re no longer working, or working less.
- You’re not yet getting Social Security benefits.
- You have more control over which accounts to tap.
Because your taxable income tends to be lower, those years are a window for tax moves that are harder to do later — without triggering costly IRMAA surcharges once Medicare begins.
Key Tax Moves Before Age 65
Here are some strategies many pre-Medicare planners use:
a) Roth Conversions
Convert traditional retirement funds into Roth IRAs while your income is lower. That means paying tax now, but having tax-free withdrawals later.
- Roth withdrawals do not count as taxable income for Medicare calculations, so they don’t trigger IRMAA.
- Many advisors suggest spreading conversions over several years to stay under IRMAA thresholds.
Watch out: Converting too much in one year could push your income above an IRMAA bracket and undo the benefit.
b) Harvest Capital Gains in Low Years
If the market has a modest up year and your income is relatively low, it can be smart to realize some capital gains. That way, you use your lower tax bracket now, before Social Security and RMDs raise your taxable income later.
c) Use Health Savings Accounts (HSAs)
If you’re still eligible, HSAs allow pre-tax contributions, tax-free growth, and tax-free withdrawals for medical costs. After you join Medicare, you can’t contribute to an HSA — so pre-65 is your last window.
d) Charitable Giving & Bunching
If you donate regularly, grouping gifts (bunching) or using donor-advised funds before Medicare can maximize deductions in years when they help most.
IRMAA Pitfalls to Avoid
Because IRMAA works on a cliff system, even a small increase in income can mean a much higher Medicare premium.
- Example: If your income is just $1 above the limit, you could pay hundreds more each month.
- IRMAA uses a two-year lookback. Your 2023 income affects your 2025 Medicare bill.
- If your income falls due to retirement, job loss, or other life events, you can appeal IRMAA using SSA Form 44 with the Social Security Administration.
Strategy in Practice: An Example
Meet Jane, age 62, planning to retire before Medicare:
- She has $800,000 in a traditional IRA.
- No Social Security income yet, but her spouse is still earning.
- If she did a $100,000 Roth conversion in one year, that could push household income above $212,000 — the IRMAA threshold for couples.
- That single move would raise her Medicare Part B and D premiums by hundreds of dollars per month once she turned 65.
Instead, Jane converts $25,000 each year for four years. She stays under the IRMAA limit, lowers future required minimum distributions (RMDs), and builds up tax-free Roth money for health costs in retirement.
How To Better My Tax Planning
The years before Medicare are one of your best windows for smart tax planning. The wrong move could cost you hundreds or thousands per year in extra Medicare premiums, thanks to IRMAA.
By carefully planning withdrawals, Roth conversions, and charitable strategies before 65, you can protect your retirement income and keep health care costs from taking a bigger bite than expected.
Planning for IRMAA isn’t just about saving on Medicare. It’s about taking control of your retirement costs before they control you.
2025 IRMAA Brackets for Medicare Part B & Part D
| 2023 Income Level (MAGI) | Filing Status | Part B Monthly Premium in 2025* | Part D Surcharge (added to drug plan cost) |
| ≤ $106,000 | Individual / Single | $185.00 | $0 |
| > $106,000 – ≤ $133,000 | Individual | $259.00 | $13.70 |
| > $133,000 – ≤ $167,000 | Individual | $370.00 | $35.30 |
| > $167,000 – ≤ $200,000 | Individual | $480.90 | $57.00 |
| > $200,000 – < $500,000 | Individual | $591.90 | $78.60 |
| ≥ $500,000 | Individual | $628.90 | $85.80 |
| ≤ $212,000 | Married Filing Jointly | $185.00 | $0 |
| > $212,000 – ≤ $266,000 | Joint | $259.00 | $13.70 |
| > $266,000 – ≤ $334,000 | Joint | $370.00 | $35.30 |
| > $334,000 – ≤ $400,000 | Joint | $480.90 | $57.00 |
| > $400,000 – < $750,000 | Joint | $591.90 | $78.60 |
| ≥ $750,000 | Joint | $628.90 | $85.80 |
About the Financial Planning Author
Alexander Langan, J.D, CFBS, serves as the Chief Investment Officer at Langan Financial Group. In this role, he manages investment portfolios, acts as a fiduciary for group retirement plans, and consults with clients regarding their financial goals, risk tolerance, and asset allocation.
With a focus on ERISA Law, Alex graduated cum laude from Widener Commonwealth Law School. He then clerked for the Supreme Court of Pennsylvania and worked in the Legal Office of the Pennsylvania Office of the Budget, where he assisted in directing and advising policy determinations on state and federal tax, administrative law, and contractual issues.
Alex is also passionate about giving back to the community, and has participated in The Foundation of Enhancing Communities’ Emerging Philanthropist Program, volunteers at his church, and serves as a board member of Samara: The Center of Individual & Family Growth. Outside of work and volunteering, Alex enjoys his time with his wife Sarah, and their three children, Rory, Patrick, and Ava.
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