Key Takeaways
- A married couple on Medicare with $210,000 a year of pensions and no other income is $8,000 under Medicare’s first surcharge line, which is $218,000 for joint filers in 2026.
- Once their Social Security starts, the full 85% of their benefits becomes taxable at that income, and that taxable amount counts toward the income Medicare uses.
- With $60,000 a year of combined benefits, their income would reach $261,000. That means $1,948.80 a year in Medicare Part B surcharges for the two of them at 2026’s figures.
- The surcharge is a fair price for the benefits, so the line to watch after that is the next one, at $274,000.
If you and your spouse are retiring on a couple of big pensions, Medicare’s income surcharge might look like someone else’s problem. It probably is, right up until your Social Security checks start.
A California couple called in to the Nov. 7 episode of Money Matters by Allworth Financial with numbers that look a lot like this on paper. They’re 60 and 62. She’s retiring and he already has, and she told Scott Hanson and Pat McClain, “We’ve got about 2.7 million in tax deferred and pensions of about 210,000 annually.” They also have $1.2 million in a brokerage account and about $175,000 of net rental income on top of that.
The rule I want to walk through doesn’t fit them, though. They both taught college, and when Social Security came up, she said, “Social Security is non-existent.” Neither of them is on Medicare yet, either.
Plenty of retirees do have pensions that size with a Social Security check still ahead of them. So let’s take a hypothetical couple: you and your spouse, both on Medicare, with $210,000 a year of pensions, no other income, and no Social Security yet.
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You have $8,000 of room for now
Medicare charges higher earners a monthly surcharge on Part B. It sets that surcharge by your modified adjusted gross income on the tax return from two years before, which is your adjusted gross income plus any tax-exempt interest. For a married couple filing jointly, the first surcharge in 2026 starts above $218,000 and adds $81.20 a month to each spouse’s Part B premium. Your $210,000 of pensions puts you $8,000 under that line, so each of you pays the standard premium.
Social Security uses up the room fast
Your Social Security benefits start to become taxable once half of them plus your other income passes $32,000 on a joint return. Past a second line of $44,000, up to 85% of them can be taxed, and neither line rises with inflation. Say your combined benefits come to $60,000 a year. Half of that is $30,000, and adding your pensions puts you at $240,000. That’s so far past $44,000 that the full 85% is taxable, or $51,000.
That taxable $51,000 goes into your adjusted gross income. So your modified adjusted gross income rises to $261,000, which is $43,000 over the line. That’s in Medicare’s first surcharge band, above $218,000 and up to $274,000, so each of you would pay $284.10 a month for Part B, $81.20 of it surcharge. That’s $1,948.80 a year in Medicare surcharges for the two of you, at this year’s figures.
The $8,000 cushion is thinner than it looks, too. Since 85% of each benefit dollar counts, about $9,400 a year of combined benefits would use it up. The surcharge also arrives two years late, since Medicare looks back two years: if your checks start next year, your 2027 tax return sets your Part B premiums for 2029.
The line to watch is $274,000
Once Social Security has taken you past the first line, the next one matters more. At $261,000, you’d be $13,000 under $274,000. Above that, the surcharge rises to $202.90 a month each. Any other taxable income adds to the same total, whether it’s interest, dividends or an IRA withdrawal, and tax-exempt interest counts too. Each year’s surcharge is set from the return two years earlier, so one big withdrawal raises one year’s premiums and the next year starts over.
Frankly, $1,948.80 a year is a fair price for $60,000 of benefits, about 3% of them, so I’d simply plan for it. I’d put the effort into keeping the rest of your income under $274,000, where the cost per person more than doubles.
All of this uses 2026’s figures. CMS should publish 2027’s Part B premiums and surcharge brackets any day now (last year, 2026’s came out on Nov. 14), so the dollar amounts above may move a bit.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
