Yes, withdrawals from a traditional 401(k) count as income for Medicare purposes and can raise your Part B and Part D premiums. Every dollar you pull from a pre-tax 401(k) lands in your adjusted gross income, which feeds the modified adjusted gross income (MAGI) that the Social Security Administration uses to decide whether you owe the Income-Related Monthly Adjustment Amount, or IRMAA. Qualified withdrawals from a Roth 401(k), by contrast, don’t appear in MAGI at all. The catch with traditional accounts is timing: a distribution you take this year won’t move your premium until roughly two years later.
How Medicare Measures Your Income
For Medicare, MAGI is your adjusted gross income (line 11 of Form 1040) plus any tax-exempt interest (line 2a).1Social Security Administration. SSA POMS HI 01101.010 – Modified Adjusted Gross Income (MAGI) No other adjustments apply. AGI already captures wages, pensions, Social Security, capital gains, dividends, interest, and distributions from traditional retirement accounts,2Internal Revenue Service. Definition of Adjusted Gross Income so if the IRS treats a dollar as taxable income, Medicare almost certainly sees it too.
SSA generally uses the MAGI from your tax return two years earlier to set the current year’s premium. In 2026, that means your 2024 return. If 2024 data isn’t yet available, SSA may use 2023 instead.3Social Security Administration. Medicare Annual Verification Notices – Frequently Asked Questions The lag is what surprises most retirees. A big withdrawal today doesn’t show up in your Medicare bill until 24 months later, when the reason for it may be long forgotten.
Traditional vs. Roth Withdrawals
Which 401(k) you draw from determines whether Medicare notices.
Traditional 401(k)
Contributions went in pre-tax, so every dollar withdrawn is included in gross income.4Internal Revenue Service. 401(k) Resource Guide – Plan Participants – General Distribution Rules That amount flows into AGI and then into your Medicare MAGI. A retiree who takes $150,000 from a traditional 401(k) to pay off a mortgage will see the full $150,000 counted, which can be enough by itself to jump one or more IRMAA tiers.
Roth 401(k)
Qualified Roth 401(k) distributions are tax-free and don’t appear in AGI, so they have no effect on Medicare MAGI. A distribution is qualified only if you’ve held the account for at least five tax years and you’re 59½ or older (or the distribution is due to disability or death).5eCFR. 26 CFR 1.408A-6 – Distributions Withdrawals that fail those tests can be partly taxable, and the taxable portion would raise MAGI. If you started your Roth 401(k) recently, check the five-year clock before assuming the money is invisible to Medicare.
What the Surcharge Costs in 2026
The standard 2026 Part B premium is $202.90 per month. IRMAA layers extra amounts on top of that once MAGI crosses each threshold, and Part D adds its own surcharge on top of whatever your drug plan charges.6Centers for Medicare & Medicaid Services. 2026 Medicare Parts A and B Premiums and Deductibles
Monthly Part B premiums for 2026, by single-filer MAGI (joint thresholds are double):
- $109,000 or less ($218,000 joint): $202.90, no surcharge
- $109,001–$137,000 ($218,001–$274,000 joint): $284.10
- $137,001–$171,000 ($274,001–$342,000 joint): $405.80
- $171,001–$205,000 ($342,001–$410,000 joint): $527.50
- $205,001–$499,999 ($410,001–$749,999 joint): $649.20
- $500,000 or more ($750,000 or more joint): $689.90
Part D surcharges at the same thresholds are $14.50, $37.50, $60.40, $83.30, and $91.00 per month.7Medicare. 2026 Medicare Costs At the first surcharge tier, a single filer pays roughly $1,148 more per year in combined Part B and Part D premiums. At the top tier, the combined surcharge runs close to $6,936 per year. The amounts apply per beneficiary, so a married couple who both have Medicare pay them twice.
One boundary worth flagging: if you’re married, lived with your spouse during the year, and file separately, a compressed bracket structure applies. MAGI above $109,000 on that filing status jumps straight to the $649.20 Part B premium and the $83.30 Part D surcharge, skipping the middle tiers.6Centers for Medicare & Medicaid Services. 2026 Medicare Parts A and B Premiums and Deductibles
Required Minimum Distributions Force the Issue
Starting at age 73, you must take required minimum distributions (RMDs) from traditional 401(k) accounts and traditional IRAs.8Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs RMDs are fully taxable and count toward your Medicare MAGI. You can’t opt out, and the required percentage of the account balance rises each year.
The RMD equals your prior-year December 31 account balance divided by a life expectancy factor from IRS tables.9Internal Revenue Service. Retirement Topics – Required Minimum Distributions (RMDs) A $1.5 million traditional 401(k) generates a first-year RMD around $57,000. Stack that on top of Social Security, a pension, or investment income and MAGI can climb above an IRMAA threshold without any voluntary withdrawal at all.
You can delay RMDs from a current employer’s 401(k) if you’re still working there and don’t own 5% or more of the company. Once you leave, the requirement kicks in. Skipping an RMD to protect Medicare premiums isn’t a viable strategy: the missed amount is hit with a 25% excise tax, reduced to 10% if corrected within two years.8Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
Ways to Keep Withdrawals From Raising Your Premium
The goal is to keep MAGI under the threshold that applies to your filing status, or at least under the next tier. That usually means spreading taxable income out rather than piling it into one year.
Spread Large Withdrawals Across Years
Retirees who need a lump sum for a home purchase or to pay off debt often pull the entire amount in one year. Splitting a $200,000 withdrawal into two $100,000 distributions across consecutive tax years can keep a joint filer under the $218,000 threshold and avoid IRMAA entirely.
Convert to Roth Before Age 63
A Roth conversion moves money from a traditional 401(k) or IRA into a Roth account. You pay tax on the converted amount now, but future qualified withdrawals are tax-free and don’t count toward MAGI. Because IRMAA uses a two-year look-back, conversions finished before age 63 won’t affect premiums when Medicare begins at 65. The window between retirement and age 63 is often when income is temporarily low, which leaves room to convert at lower brackets. Smaller traditional balances also mean smaller future RMDs.
Use Qualified Charitable Distributions
If you’re at least 70½ and give to charity, a qualified charitable distribution (QCD) sends money directly from a traditional IRA to a qualifying charity. The distribution counts toward your RMD but is excluded from AGI,10Internal Revenue Service. Seniors Can Reduce Their Tax Burden by Donating to Charity Through Their IRA so it never enters Medicare’s MAGI calculation. The 2026 limit is $111,000 per person, and a spouse can make a separate QCD up to the same amount.11Congress.gov. Qualified Charitable Distributions from Individual Retirement Accounts QCDs work only from IRAs, not directly from 401(k) accounts, so you’d need to roll the 401(k) balance into an IRA first.
Coordinate Withdrawals With Other Taxable Income
Capital gains from a taxable brokerage account also flow into AGI. Selling appreciated stock in the same year you take a large 401(k) distribution stacks two income sources on top of each other. Where practical, alternate years for large investment sales and large retirement withdrawals, or model the combined MAGI before executing both.
Lean on Roth Balances in High-Income Years
Retirees with both traditional and Roth accounts have room to maneuver. In years when RMDs, capital gains, or a one-time event are already pushing MAGI up, use qualified Roth withdrawals for living expenses instead of pulling more from the traditional side. Roth distributions are invisible to Medicare, which turns them into a lever you can pull whenever a taxable spike is unavoidable elsewhere.
If Your Income Has Dropped Since the Look-Back Year
If Medicare bills you for IRMAA based on a year when your income was high but circumstances have since changed, you can ask SSA to reduce the surcharge by filing Form SSA-44.12Social Security Administration. Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event Form SSA-44 The reduction has to be tied to a qualifying life-changing event, not just disagreement with the amount.
Qualifying events include:
- Work stoppage or reduction by you or your spouse
- Divorce or annulment
- Death of a spouse
- Involuntary loss of income-producing property
- A pension you were receiving stopping or decreasing
You’ll need documentation of both the event and your reduced MAGI. If you’ve already filed for the current year, submit a signed copy of the return or an IRS transcript. You have 60 days from receiving the determination notice to request reconsideration, with SSA presuming the notice was received five days after its date.13Social Security Administration. Overview of the Appeals Process for the Income-Related Monthly Adjustment Amount (IRMAA)
A large voluntary 401(k) withdrawal is not a qualifying event. The appeal exists for unexpected income drops, not for undoing a distribution you now wish you’d handled differently.