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For retirees, Required Minimum Distributions (RMDs) are an inevitable part of managing tax-advantaged retirement accounts, such as traditional IRAs and 401(k)s. While many focus on the tax implications of RMDs, fewer realize their potential impact on Medicare costs, Can RMDs increase Medicare premiums? More specifically, the Medicare Part B and Part D premiums. Understanding this connection can help retirees better plan their withdrawals and avoid increases in healthcare costs.

What Are RMDs

RMDs are mandatory withdrawals that individuals must take from their traditional retirement accounts starting at age 73 (as of 2024, per the SECURE 2.0 Act). The IRS determines the required withdrawal amount based on account balance and life expectancy. Because RMDs are considered taxable income, they can push retirees into higher income brackets, which can affect their Medicare premiums.

IRMAA’s (Income-Related Monthly Adjustment Amount)

Medicare Part B (medical insurance) and Part D (prescription drug coverage) premiums are income-based. This means higher-income individuals pay more due to the IRMAA. IRMAAs apply when modified adjusted gross income (MAGI) exceeds certain thresholds, as reported on tax returns from two years prior. In other words, RMDs taken in 2024 could impact Medicare premiums in 2026.

Can RMDs Increase Medicare Premiums

Because RMDs increase taxable income, they may push retirees above the IRMAA thresholds. This can lead to higher Medicare costs. For example:

In 2025, individuals with a MAGI over $106,000 (or $212,000 for married couples filing jointly) pay more than the standard Medicare Part B premium.

• In 2025, the base Part B premium is $185.00 per month, however those subject to IRMAA could pay as much as $594 per month depending on income.
• Similarly, Part D enrollees face IRMAA surcharges ranging from $12.90 to $81 per month, based on income.

Please note: taking large RMDs in a single year may increase Medicare costs, potentially taking away from retirement savings.

How to Lessen RMD Impact on Medicare Premiums

1. Qualified Charitable Distributions: Individuals over 70½ can donate up to $100,000 per year to a qualified charity from their IRA. This reduces taxable income without affecting RMD obligations.
2. Roth Conversions: Converting funds from a traditional IRA to a Roth IRA before RMD age can lower future RMD amounts. Roth withdrawals are not taxable or included in MAGI.
3. Strategic Withdrawals: Spreading withdrawals over multiple years or taking early withdrawals before RMDs begin can help manage taxable income levels.
4. Filing for IRMAA Appeals: If a significant life change (such as retirement, divorce, or loss of income) affects MAGI, individuals can request an IRMAA reduction.

Learn how to file an IRMAA appeal

While RMDs are an unavoidable part of retirement planning, their impact on Medicare costs must be considered. Understanding IRMAA thresholds and carefully planning withdrawals can help retirees control their Medicare premium costs. By using tax-efficient withdrawal strategies, retirees can minimize unnecessary healthcare expenses and maximize retirement savings.

Now that is 2025, both Medicare beneficiaries and agents need to know what the Medicare premiums and deductibles 2025 are so that everyone can plan accordingly. 2025 is the same as previous years; CMS has made changes to both Medicare Part A & Part B premiums and deductibles.

Medicare Part A costs 2025

The majority of beneficiaries do not have to pay a Part A premium if they have worked for at least 40 quarters (10 years) and paid Medicare taxes. Although if they do not qualify for premium free Part A, there are a couple different premium amounts they can pay if they want Part A benefits.

When either the beneficiary or their spouse worked and paid Medicare taxes between 30 and 39 quarters, the monthly premium cost is $285 in 2025. This is an increase of $7 from the 2024 cost of $ 278.

If the beneficiary or their spouse worked at a job and paid Medicare taxes for less than 30 quarters, the premium in 2025 is $518. This an increase of $13 from the cost of $505 in 2024

Part A Deductible and Coinsurance 2025

Part A covers inpatient hospital costs. In 2025, the Part A deductible has gone up $1,676 for each benefit period. This is an increase of $44 from the cost of $1,632 in 2024.

On original Medicare once the beneficiary meets the deductible, the cost for a hospital stay is $0 for days 1-60. The cost for days 61-90 is $419 per day. This is $11 over the cost of $408 in 2024. Once the beneficiary reaches day 91 and over, they start to use their lifetime reserve days and pay $838 per day. that is up from $816 in 2024.

There is no coinsurance charge for days 1-20 in skilled nursing facility stays. The cost for days 21-100 are $209.50 per day in 2025. This is a $5.50 increase from the 2024 cost of $204.

Click here to learn about the Part D drug cap

Part B costs 2025

In contrast to the Part A premium, almost all beneficiaries have to pay a Part B premium. In special circumstances, if a beneficiary qualifies for extra help due to limited income and resources, they may not have to pay the Part B premium.

Part B Premiums & Deductibles

For 2025, the standard monthly premium has gone up $10.30 to $185.00. The premium was $174,70 in 2024.

Learn more about Part B costs

Those with an income level over a specified amount pay an IRMAA. The CMS adds the IRMAA to the standard monthly premium amount. The premium amount each beneficiary pays ranges from $259 to $628.90 per month if the beneficiary pays an IRMAA. The amount is based on their specific income level.

If you have been incorrectly charged an IRMAA, learn how to file an appeal.

The deductible amount for Part B in 2025 is $257, an increase of $17 from the 2024 cost of $240.

It is important for beneficiaries to stay updated on healthcare costs each year to manage their budgets and avoid surprises. CMS makes decisions on Medicare costs based on the projected rise in costs and use of healthcare.

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Medicare premiums

If you are either a Medicare beneficiary or a Medicare agent, you need to know the cost of Medicare premiums.  Each year the costs are subject to change.  Both enrollees and agents should stay updated on cost and coverage changes. Not having the correct information can be a costly mistake.

Medicare Part A

There is no premium ($0) for Part A for the majority of people most people.  Beneficiaries who worked or had a working spouse who paid Medicare taxes for at least 40 quarters (10 years) receive premium free Part A.

Those who do not qualify for the $0, premium free Part A may be eligible to purchase it.  Beneficiaries must sign up for Part B in order to purchase Part A.  For 2024, the monthly premium is either $278 or $505.  This depends on the length of time either the beneficiary or their spouse worked and paid Medicare taxes.

Please note:  Beneficiaries who do not purchase Part A when they are eligible (in most cases at 65 years old), may pay a penalty.  The penalty adds 10% to the monthly Part A premium and lasts for twice the number of years that you neglected to sign up for Part A.

Medicare Part B

The monthly premium for Part B is $174.70 in 2024.  This amount usually changes on January 1st each year. This premium may be higher for some individuals with a higher income level. This additional charge is called an IRMAA, and it effects about 8% of Medicare beneficiaries.  The Additional charge ranges from $69.90 up to $419.30 added to the monthly premium.

Medicare may charge a late enrollment penalty to anyone who did not enroll in Medicare Part B when they were first eligible or did not have creditable coverage in place at that time.  The LEP for failing to enroll in Part B is 10% for every year the beneficiary did not sign up for Part B.  This penalty is different than the Part A penalty; it will last for as long as the beneficiary has Part B.

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Medicare charges premiums for various benefits.  In most years, the premiums are increased. The attached document provides the premiums for Part A of Medicare (most people do not need to pay a Part A premium),  Medicare part B premium (Most people do pay Part B premium unless they receive drug or copay help from the state) and the Medicare part D drug base premium. Read more