Quick answer
How can you avoid IRMAA?
You avoid or reduce IRMAA by keeping modified adjusted gross income below a bracket edge in the years that count, which start two years before Medicare. The main levers are timing capital gains and Roth conversions before age 63, spreading large sales across years, giving through qualified charitable distributions after 70½, and appealing with Form SSA-44 when retirement cuts your income.
Key takeaways
- 01Planning starts at 63, because 2-year-old income sets the premium.
- 02Spreading a large gain over several years can drop a household several tiers.
- 03QCDs from an IRA after 70½ never enter AGI, so they lower IRMAA MAGI.
- 04Municipal bond interest does count; it is not an IRMAA shelter.
| Income year that matters first | Age 63 |
|---|---|
| First joint edge (2026) | $218,000 MAGI |
| Tax-free but counted | Municipal bond interest |
| Excluded from AGI | QCDs (age 70½+) |
| Appeal route | Form SSA-44 |
| Not a sale | §721 in-kind contribution |
The Short Answer
How can you avoid IRMAA?
You avoid or reduce IRMAA by keeping modified adjusted gross income below a bracket edge in the years that count, which start two years before Medicare. The main levers are timing capital gains and Roth conversions before age 63, spreading large sales across years, giving through qualified charitable distributions after 70½, and appealing with Form SSA-44 when retirement cuts your income.
There is no deduction that erases IRMAA once the income is on the return. Planning works on what goes onto the return and when. For concentrated stock, the largest single item is usually the capital gain from selling it.
The Strategies
What are the best ways to lower IRMAA?
Finish big gains before 63
Sell or diversify concentrated stock in years that will never be IRMAA lookback years, ideally while you still earn wages in the same bracket anyway.
Spread large sales across years
Four $175,000 gains usually land in a lower tier than one $700,000 gain. The chart below shows the difference.
Do Roth conversions early
Convert in your 50s and early 60s so that later required minimum distributions, and later MAGI, are smaller.
Use QCDs after 70½
Qualified charitable distributions go from an IRA to charity without entering AGI, and they count toward RMDs.
Donate appreciated stock instead of cash
You avoid the gain entirely. See donating appreciated stock.
Pick income that is not MAGI-heavy
Return of capital and Roth withdrawals do not add to MAGI; municipal bond interest does.
Manage the bracket edge
Because tiers are cliffs, aim gains and conversions just below a threshold.
Appeal after retirement
Stopping work is a life-changing event. File SSA-44 with proof of lower income.
Contribute stock in kind instead of selling
A §721 contribution to a partnership is not a sale, so no gain enters MAGI at contribution.
Lump vs Spread
Does spreading a stock sale reduce IRMAA?
Take a married couple at 63 with $150,000 of other income who want to sell stock with a $700,000 gain. Selling it all in one year puts MAGI at $850,000, the top tier. Spreading it over 4 years puts each year at $325,000.
Chart
IRMAA cost to a couple: one sale vs four equal sales
Spreading is not always cheaper: four years in a middle tier can cost more in total than one year at the top. The point is to run the numbers, including income tax, before choosing. Spreading also leaves you exposed to the stock for longer.
Where Embark fits
The sale is usually the IRMAA problem. What if the shares produced income without being sold?
Run your ticker to see what a position could target in income with $0 tax at contribution.
- A §721 in-kind contribution is not a sale: $0 tax at contribution, so no capital gain lands in MAGI that year
- Avoids the one-year gain spike that a large stock sale creates two years before your Medicare bill
- Targets 10%+ annual income from shares you already own; that income is taxable and counts in MAGI
Run the numbers
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Myths
Do municipal bonds help with IRMAA?
No. Municipal bond interest is excluded from federal income tax but is added back for IRMAA under 20 CFR §418.1010. Moving taxable bonds into munis can lower your income tax while leaving IRMAA unchanged. See Treasury vs municipal bonds for the income tax side.
Do
- Count every source of MAGI for ages 63 and up, including muni interest
- Model a sale over one, two and four years before deciding
- Keep proof of retirement dates and pay stubs for an SSA-44 appeal
Don't
- Assume a tax-free bond keeps you under an IRMAA edge
- Do a Roth conversion that lands $1 over a threshold
- Forget that each spouse pays the surcharge
Embark
How does an in-kind contribution help with IRMAA?
For a household whose main asset is one appreciated stock, the sale is usually the IRMAA problem. Embark accepts the shares in kind into a §721 SPV: $0 tax at contribution and no capital gain in that year's MAGI. The SPV then targets 10%+ annual income. That income is taxable and counts toward MAGI, so plan it within a bracket. Shares are locked up for 3 years; Embark is for accredited investors.
Compare it with the other routes in the cost of selling appreciated stock and monetizing stock without a taxable sale.
FAQ
Frequently asked questions
At what age should you start IRMAA planning?
At about 63, because the tax return from two years earlier sets your premium when you enroll in Medicare at 65.
Do Roth conversions cause IRMAA?
They can. A conversion is ordinary income in the year you do it and counts in MAGI.
Does a QCD reduce IRMAA?
Yes. A qualified charitable distribution from an IRA after age 70½ is excluded from AGI, so it lowers IRMAA MAGI.
Do capital gains count toward IRMAA?
Yes. Long-term and short-term capital gains are part of AGI, which is the base of IRMAA's MAGI.
Can you appeal IRMAA after retiring?
Yes. Work stoppage or reduced hours is a life-changing event; file Form SSA-44 with evidence of your lower income.
Does contributing stock to an exchange fund or §721 SPV trigger IRMAA?
The contribution itself is not a sale under §721, so it adds no gain to MAGI. Income paid later is taxable and does count.
Sources
Primary sources
Sources
- Federal Register 2025-20251: Medicare Part B premium and IRMAA amounts for 2026 (GovInfo)
- CMS fact sheet: 2026 Medicare Parts A and B premiums and deductibles, Part D IRMAA
- 20 CFR §418.1010: IRMAA definitions, including modified adjusted gross income
- 20 CFR §418.1205: What is a major life-changing event?
- SSA-44: Medicare Income-Related Monthly Adjustment Amount, Life-Changing Event
- 26 U.S. Code §721: Nonrecognition of gain or loss on contribution to a partnership
Cite this article
Embark Funds Research. “How to Avoid IRMAA 9 Strategies That Work.” Embark Funds, updated October 29, 2026. https://www.embarkfunds.com/insights/how-to-avoid-irmaa
Not tax, legal or investment advice: This article is educational and is not tax, legal, investment or Medicare advice. Rules and dollar amounts change every year and depend on your facts. Work with a CPA or financial planner before acting. Embark income figures are targets, not guarantees. Contributed shares have a 3-year lock-up, and Embark is open to accredited investors only.
Retirement Income & Medicare Series
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Turn a Concentrated Position Into Income, Not a Gain
Contribute stock to Embark's SPV with $0 tax at contribution and target 10%+ annual income. 3-year lock-up; accredited investors.