Key Takeaways
- A retired military widow told The Ramsey Show this week that she lives on $10,994 a month in pensions, or $131,928 a year.
- Medicare’s 2026 Part B surcharge starts above $109,000 of income for a single filer, exactly half the $218,000 line for a joint return.
- If all of that pension income is taxable, her first single return, for 2026, would add an $81.20 monthly surcharge to her 2028 Part B premium at this year’s rates, or $974.40 a year.
- As a military retiree, she has to keep Part B to keep TRICARE For Life, so dropping it won’t get her out of the surcharge.
Medicare charges higher earners more for Part B, and for a single filer it puts the line at exactly half of a married couple’s. That seems fair enough until a spouse dies and the same household income has to fit under a line half as high.
And since Medicare bases the surcharge on your tax return from two years before, it can show up years after you lose your spouse.
Debt free on $10,994 a month
A retired military widow called The Ramsey Show this week to ask whether she should leave the home she shared with her husband for 24 years and start over somewhere new. When she went through her finances, she said: “My husband died January 2025, so with the pensions and my military pensions, my income is $10,994 a month.” That’s $131,928 a year. She has no debt, $144,000 invested and a $50,000 emergency fund.
But her numbers hold a Medicare cost that never came up on the call. So let’s say all $131,928 is taxable pension income, it holds steady, and she’s on Medicare Part B by 2028. For 2025, the year her husband died, she can still file a joint return. For 2026, she’ll file single.
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Her surcharge shows up in 2028
Part B’s standard premium is $202.90 a month in 2026. Higher earners pay a surcharge on top of it, set by income bands on their tax return from two years before, or from three years before if that one isn’t available. In Medicare’s 2026 table, the first band starts above $109,000 for a single filer, or above $218,000 on a joint return, and adds $81.20 a month. The next one starts above $137,000 single, or $274,000 joint, and adds $202.90. Everyone in a band pays the same surcharge, so $1 over a line costs the whole step.
That means her 2027 premium is based on the joint 2025 return, and her 2028 premium on her first single return, for 2026.
About $23,000 over the line
On the joint 2025 return, $131,928 is about $86,000 below the $218,000 line, so she pays no surcharge in 2027. On her single 2026 return, the same income is about $23,000 above $109,000. That puts her in the first band: an $81.20 surcharge on top of the $202.90 premium, or $284.10 a month at this year’s rates. Over a year, that’s $974.40 more than the standard premium.
She’s also only about $5,000 under the next line at $137,000. If she crosses it, the surcharge jumps to $202.90 a month, which doubles her premium to $405.80. Taxable interest and dividends on the $144,000 she has invested go on the same return, and so would a withdrawal from a pretax account.
Dropping Part B isn’t an option
Plenty of retirees with other coverage wonder whether Part B is worth what it costs. As a military retiree, she doesn’t really have that choice. TRICARE For Life covers Medicare-eligible uniformed services retirees 65 or older, but only if they have both Part A and Part B. Anyone entitled to Part A who skips Part B loses TRICARE coverage for any period when Part B could have covered them. So for her, the surcharge is part of the price of TRICARE For Life.
Check what’s in the $10,994
Before her 2026 return is filed, it’s worth knowing how much of that $10,994 is taxable. VA disability compensation isn’t taxed and doesn’t go on a federal return, so any of it in her monthly total doesn’t count toward the $109,000. A little over $1,900 a month of VA pay would bring her taxable income down to the line. And if $10,994 is what she takes home after tax withholding, her income on the return is higher than $131,928, and she’s closer to the $137,000 line than it looks. With 2026 almost over, most of the income on that return has already been paid.
Watch the mail next fall
CMS is due to publish 2027’s Part B premium and surcharge bands soon (last year, it put out this year’s on Nov. 14), and Social Security mails next year’s surcharge notices around now, with its cost-of-living letters. Her 2027 premium should carry no surcharge, since it’s based on the joint 2025 return. The notice to watch for comes next fall, for her 2028 premium. It will be set from her first single return, at whatever the bands and surcharge are by then.
For someone with no debt and a $50,000 emergency fund, $974.40 a year won’t change much. But she can see it coming now, two years before Medicare bills her for it.
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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!
