Selling a home in retirement could trigger unexpectedly higher Medicare premiums for some Americans if the transaction generates enough taxable income to activate Medicare’s Income-Related Monthly Adjustment Amount (IRMAA) surcharge.

IRMAA is an income-based surcharge added to Medicare Part B and Part D premiums for higher-income beneficiaries, Fortune reported Monday. Medicare determines those surcharges using tax returns from two years earlier, meaning a large one-time capital gain from a home sale can temporarily increase monthly premiums after retirement.

Home Sale Today, Higher Premiums Tomorrow

Mike McCracken, president and founder of Wealth Guide Financial, told Fortune the biggest mistake he sees is retirees selling their homes too close to or after turning 63 without first considering the Medicare impact.

“You see, Medicare looks back two years at your tax return to calculate IRMAA,” McCracken said. “If you sell in 2025 at age 64, and that capital gain shows up on your 2025 return, it can trigger higher premiums starting in 2027 when you are already on Medicare.”

McCracken said a couple with a $300,000 taxable capital gain could see Medicare premiums rise from about $406 per month to more than $800 per month. Elizabeth Gavino, principal of financial and retirement planning firm Lewin & Gavino, told Fortune more retirees are being caught off guard because decades of home price appreciation have produced much larger taxable gains than many expected.

The issue comes as retirement experts increasingly warn that income planning plays a growing role in Medicare costs. Earlier this year, experts said higher income can trigger larger Medicare premiums through income-based adjustments, making withdrawal strategies, Roth conversions and retirement income planning increasingly important. Medicare Part B spending is also projected to grow 8.5% annually through 2030, potentially putting further upward pressure on premiums over time.

Medicare costs have already increased this year. The standard Medicare Part B premium rose to $202.90 per month in 2026, up nearly 10% from the previous year. Financial planners have also cautioned that one-time income events, including large home sales, can push retirees into higher IRMAA brackets because the surcharge is based on tax returns from two years earlier.

To reduce the risk, the advisors recommended selling before age 63 if possible, using the IRS capital gains exclusion where applicable and carefully planning the timing of a home sale. If a higher premium cannot be avoided, the surcharge is generally temporary and falls away once the high-income year is no longer falls within Medicare’s two-year look-back period.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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