Medicare premiums to rise for retiree using IRA for dental work

This situation primarily affects single individuals whose income falls within a specific range for Medicare surcharges, impacting roughly 8% of Part B enrollees. Individuals with lower incomes can utilize IRA funds for dental care without incurring additional charges.

Medicare typically excludes routine dental services like cleanings, fillings, and implants. Coverage is limited to dental work directly related to covered medical treatments, such as oral exams preceding heart valve replacements or extractions needed before chemotherapy.

Social Security calculates income-related adjustments (IRMAA) based on modified adjusted gross income (MAGI). Withdrawals from traditional IRAs are considered taxable income and factored into this calculation. The Social Security Administration typically uses income from two years prior; therefore, a 2026 withdrawal will affect premiums in 2028.

For example, if a single filer’s income is $90,000 and a $28,000 withdrawal brings the total to $118,000, they could face an additional $81.20 per month for Part B, raising the premium to $284.10 annually. Part D premiums would also increase.

Widows face a disadvantage, as the income threshold for married couples filing jointly is significantly higher ($218,000) than for single filers ($109,000), leaving less room before surcharges apply.

There is no appeal process for this situation. The SSA-44 form, used to request a lower surcharge due to life-changing events, does not apply to voluntary IRA withdrawals.

Individuals have a few options to mitigate the impact. Using cash savings or a taxable brokerage account (only counting capital gains) avoids increasing MAGI. Spreading the withdrawal across two tax years – $14,000 in December 2026 and $14,000 in January 2027 – could keep income below the threshold, assuming other income remains constant.

Before proceeding with treatment, individuals should obtain a detailed, staged cost estimate from the dental office and verify coverage details with their Medicare Advantage plan. Estimating MAGI before December can help determine if a partial withdrawal or alternative payment method is necessary.

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