He Took His Pension as a Lump Sum at 65. Two Years Later, Medicare Billed Him Like a Millionaire.

A trustee-to-trustee IRA rollover keeps a pension buyout out of MAGI entirely, spreading taxable income over years to stay below IRMAA thresholds. He rolled some into an IRA, kept a chunk in a taxable brokerage account for a kitchen remodel, and started Social Security at 66. One member recently described opening the Medicare letter, staring at the numbers, and asking whether there had been a mistake because he was "living on Social Security and a garden." Your 2026 premiums are set using the modified adjusted gross income (MAGI) reported on your 2024 tax return. Add a partial year of wages, some Social Security, and a little interest, and his MAGI easily cleared $205,000 as a single filer.