Large 401(k) Withdrawal Can Trigger Higher Medicare Premiums, Financial Planners Caution

Retirees who take a one-time, large withdrawal from a traditional 401(k) risk inadvertently pushing themselves into higher Medicare premium brackets, financial advisors warned on June 6, 2026. The additional taxable income can lift modified adjusted gross income (MAGI) above thresholds for the Income-Related Monthly Adjustment Amount (IRMAA), raising costs for Part B and Part D. The surcharge is determined by income from two years earlier, meaning a withdrawal in 2026 would affect 2028 premiums. Single filers with MAGI above $103,000, or joint filers above $206,000, enter the first IRMAA tier. While the standard Part B premium sits at $174.70 per month in 2026, IRMAA can increase it to $244.60 or higher, depending on income. Advisors suggest mitigating the impact by spreading withdrawals across multiple tax years or tapping Roth accounts, as qualified distributions do not count toward MAGI. One-time cash needs, such as home purchases, should be planned to avoid crossing IRMAA thresholds unnecessarily.