IRMAA MAGI Traps for Retirees Abroad

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As of 2026, the standard Medicare Part B premium is $202.90 a month. Cross the first income-related monthly adjustment amount (IRMAA) line and you add $81.20. At the top bracket, Part B is $689.90 a month even if you live in Lisbon and Medicare pays almost nothing for local care.

Living abroad does not pause IRMAA. Social Security still prices your 2026 premiums off 2024 tax-year modified adjusted gross income (MAGI), and 42 U.S.C. § 1395r adds excluded foreign earned income back into that MAGI. The Foreign Earned Income Exclusion (FEIE) can make your Form 1040 look “clean” while your Medicare bill still treats the excluded wages as income. This guide is for retirees first, with notes for still-working operators and families supporting a parent on Medicare. For the coverage question itself, start with the canonical Medicare abroad explainer in our Retirement Abroad hub, then use this page for the MAGI surcharge math.

Does IRMAA still apply if you live outside the United States?

Yes. IRMAA is a premium surcharge on Medicare Part B and Part D. It follows your IRS return, not your mailing address. If you keep Part B, or you keep a Part D plan, SSA can still assess IRMAA and withhold it from Social Security or bill you directly.

Most U.S. citizens can keep collecting Social Security while living abroad. That payment stream does not cancel Medicare premiums. The painful split is this: Medicare generally does not pay for care outside the United States, yet the premium machine keeps running if you stay enrolled.

The two-year lookback still uses a U.S. tax year

SSA’s operating rules say MAGI for IRMAA is generally the most recent tax information IRS can provide, usually from two years earlier and not more than three. For 2026 premiums, that usually means your 2024 Form 1040. Retiring to Italy in 2025 does not rewrite the 2024 MAGI that prices 2026 Part B.

That lag is why people get “surprise” IRMAA after they move. The last high-income W-2 year, a Roth conversion, a home sale, or a large IRA withdrawal can sit on the return SSA is still reading.

How is IRMAA MAGI calculated if you claimed the FEIE?

SSA’s public MAGI formula is Form 1040 adjusted gross income (line 11) plus tax-exempt interest (line 2a). That is enough for most domestic retirees. It is not the full statutory definition.

The statute defines MAGI as adjusted gross income determined without regard to Internal Revenue Code sections 135, 911, 931, and 933, then increased by tax-exempt interest. Section 911 is the FEIE and the foreign housing exclusion. If you filed Form 2555, the excluded amount is added back for IRMAA even though it reduced taxable income.

Housing costs claimed under section 911 follow the same logic. For 2026, the general housing expense limitation is $39,870 (30% of the FEIE cap), with higher limits in some high-cost cities. Those excluded dollars are a tax win on Form 1040. They are not an IRMAA hide.

Data note: FEIE and housing caps were checked against IRS international taxpayer pages in September 2026 and change with inflation and city lists.

What counts toward MAGI, and what does not

Through AGI, IRMAA already sees taxable Social Security (often up to 85% of benefits), traditional IRA and 401(k) distributions, Roth conversions, capital gains, ordinary dividends, rental income, and most pensions. Tax-exempt municipal bond interest is added even though it never hit taxable income.

The non-taxable slice of Social Security is not separately added back for IRMAA. Roth IRA qualified distributions generally stay out of AGI. Those two facts are why some retirees shift future withdrawals toward Roth accounts long before they enroll in Medicare, instead of converting a huge balance in the lookback year. If you are still converting while living abroad, read the mechanics on Roth IRA rules for FEIE filers before you create a two-year IRMAA hangover.

What do the 2026 IRMAA brackets actually cost?

CMS published the 2026 Part B and Part D IRMAA tables in November 2025. About 8% of Part B and Part D enrollees pay these add-ons. The first threshold is MAGI above $109,000 for individual returns and $218,000 for joint returns.

2024 MAGI (individual)	2024 MAGI (joint)	2026 Part B monthly total	2026 Part D IRMAA add-on
$109,000 or less	$218,000 or less	$202.90	$0.00 plus plan premium
Above $109,000 to $137,000	Above $218,000 to $274,000	$284.10	$14.50
Above $137,000 to $171,000	Above $274,000 to $342,000	$405.80	$37.50
Above $171,000 to $205,000	Above $342,000 to $410,000	$527.50	$60.40
Above $205,000 and under $500,000	Above $410,000 and under $750,000	$649.20	$83.30
$500,000 or more	$750,000 or more	$689.90	$91.00

Married filing separately after living with a spouse during the tax year is a cliff: MAGI above $109,000 jumps to $649.20 Part B, then $689.90 at $391,000. Do not “solve” a joint MAGI problem by filing separately without modeling that table.

The 2026 Part B deductible is $283. The Part A inpatient deductible is $1,736. Those apply only if Medicare covers the stay. They do not replace local hospital bills in Medellín or Chiang Mai.

Which cash-flow events shove you into a higher IRMAA tier?

The surcharge is not a tax on “being an expat.” It is a tax on the MAGI that happened to sit on the lookback return. The usual spikes are predictable.

• Required minimum distributions from traditional IRAs and 401(k)s, which are ordinary income and start at age 73 for people born in 1951 through 1959 under SECURE 2.0.
• Roth conversions in the two years before Medicare pricing, including “get it over with” conversions the year you resign a U.S. job.
• Selling a U.S. home or foreign property with a large capital gain that is not fully sheltered by the section 121 exclusion.
• FEIE wages or housing amounts that never showed as taxable income but still count under section 911 add-back.
• A UK, Canadian, or other foreign pension that is taxable on Form 1040 even if the host country treats it as tax-free.

If those dollars live in a U.S. brokerage, Charles Schwab is a common place expats still hold IRAs and taxable accounts after other firms close international addresses. The account brand does not change IRMAA. The distribution calendar does. Sequence conversions and RMDs against the $109,000 / $218,000 lines the same way you would sequence them against a U.S. tax bracket.

Host-country tax deals do not rewrite MAGI

Italy’s 7% flat-tax retiree regime, Portugal’s IFICI rules, or a territorial host return can change what you pay locally. They do not change how SSA reads Form 1040 MAGI. If you are shopping Mediterranean retiree tax deals, read the local income tax as one ledger and IRMAA as another. The Italy 7% retiree tax guide is useful for the host-country side; it will not cancel a $81.20 Part B add-on.

What can you actually change with Form SSA-44?

You cannot appeal IRMAA just because you moved to Panama. Moving abroad is not a listed life-changing event. SSA will use a more recent tax year only if you had a qualifying event and MAGI actually dropped.

SSA lists these events: marriage, divorce or annulment, death of a spouse, work stoppage, work reduction, loss of income-producing property, loss of pension income, and an employer settlement payment. Retirement and selling a business can qualify as work stoppage. File Form SSA-44 (or complete it through your my Social Security account) with proof of the event and either a filed return or a signed MAGI estimate for the year you want SSA to use.

If you amended a return, SSA’s process is different: call and ask to lower IRMAA based on the amended MAGI, rather than treating it as a life-changing event. Proof still matters. A lower host-country tax bill is not proof.

Checklist: request a new IRMAA determination without wasting a year

1. Pull the IRMAA notice and write down which tax year SSA used (usually two years back).
2. Confirm a listed life-changing event actually happened, with a date. “We relocated” is not enough.
3. Estimate MAGI for the year after the event, including FEIE add-back if you will still file Form 2555.
4. Gather evidence: retirement letter, final pay stub, sale documents, death certificate, or pension-loss letter.
5. Submit SSA-44 and keep copies. If your spouse is also on Medicare, each person must request their own determination.
6. Calendar the next year’s lookback. A successful 2026 reduction based on 2025 retirement does not automatically fix 2027 if 2025 MAGI is still high.

Should you keep paying Part B while you live abroad?

This is the cash-flow fork. SSA warns that Medicare generally does not cover health services outside the United States, with narrow Canada/Mexico and cruise-ship exceptions. Paying $202.90, or $284.10 with first-tier IRMAA, for a plan that will not pay your Spanish clinic is a real leak.

Dropping Part B to save the premium has a second cost. Medicare.gov’s 2026 example: wait two full years without a Special Enrollment Period and you add a 20% late enrollment penalty to the $202.90 standard premium, or $40.58, rounded to a $243.50 monthly Part B bill for 2026. That penalty is usually lifetime. IRMAA stacks on top of it.

Part D works differently: the late penalty is 1% of the national base beneficiary premium ($38.99 in 2026) per month without creditable drug coverage. Fourteen months late is a 14% add-on, about $5.50 a month in Medicare’s example, for as long as you have drug coverage.

Beginners: keep Part A (usually premium-free with 40 quarters), decide Part B with a written plan for U.S. trips and the late-enrollment math, and buy local or international medical coverage that actually pays where you live. Operators: model IRMAA MAGI for the two years after any conversion, RMD start, or FEIE work year the same way you model estimated tax. Retirees already on benefits: file SSA-44 only when a listed event cut MAGI, and do not assume a cheaper host-country tax regime is a life-changing event.

Use the lookback, not the postcard, to price Medicare

IRMAA does not care that you left Florida. It cares about MAGI on the return IRS already shipped to SSA, including section 911 amounts you legally excluded. Price the $109,000 / $218,000 lines two years ahead of enrollment, use SSA-44 only for real work-stoppage and family-status events, and do not pay top-tier Part B for care Medicare will not deliver overseas unless you have a specific U.S. return plan.

This is educational information, not financial advice and not legal advice. IRMAA brackets, FEIE limits, and Medicare premiums change. Confirm your facts with the IRS, SSA, CMS, and a qualified professional before you enroll, drop coverage, or file Form 2555.

Data notes / Sources checked

• CMS 2026 Part A/B premiums, deductibles, and IRMAA tables
• SSA POMS HI 01101.010 MAGI definition and 2026 thresholds
• 42 U.S.C. § 1395r IRMAA MAGI, including IRC § 911 add-back
• IRS: figuring the foreign earned income exclusion (2025–2026 caps)
• Form SSA-44, Medicare IRMAA life-changing event
• Medicare.gov late enrollment penalty examples for 2026
• SSA: payments outside the United States