Charlene G Moffatt, PC

📋 IRMAA uses your tax return from two years prior to set your Medicare premiums. A Roth conversion, home sale, or severance package at 63 can push your modified adjusted gross income past a threshold and raise your Part B and Part D premiums at 65 for the entire year.

The first IRMAA tier for single filers in 2026 starts at $106,000 in MAGI. One dollar over that line adds roughly $1,000 per year to your Medicare costs. For married couples filing jointly, the threshold is $212,000.

Catch-up contributions are the one item on this list that works in your favor. Starting at 50, you can add $8,000 to a 401(k) in 2026 on top of the $24,500 standard limit. Between 60 and 63, that catch-up jumps to $11,250 under the SECURE 2.0 super catch-up provision. IRA catch-ups are smaller at $1,100.

The Medicare Part B late enrollment penalty is one of the few financial penalties that never goes away. If you delay enrollment by two years without qualifying coverage, your premium increases 20% for life. The exception is if you had employer coverage through your own job or a spouse's job during that time.

The Social Security earnings test trips up people who claim early and continue working. In 2026, Social Security withholds $1 for every $2 earned above $24,480 if you are under full retirement age. The withheld money is not lost. It is repaid through higher monthly benefits once you reach full retirement age. But most people do not know that and panic when the reduction hits.

The Roth conversion window between retirement and age 73 is where the planning happens. Income is low, RMDs have not started, and conversions fill up lower tax brackets. Waiting until RMDs begin means the conversions stack on top of forced withdrawals.

The coverage gap catches people who retire before 65. Medicare does not start early regardless of when you stop working. COBRA lasts 18 months and is expensive. The ACA marketplace is the other option, and eligibility for premium subsidies depends on income.

📋 When you retire, no employer is withholding taxes from your paycheck. The IRS still expects payment throughout the year — you just have to set it up yourself.

Most retirees have two options: elect withholding directly from Social Security, a pension, or IRA distributions, or make quarterly estimated payments four times a year.

Withholding is simpler for most people. You file one form — W-4V for Social Security, W-4P for IRAs and pensions — and taxes come out automatically. The IRS also treats all withholding as paid evenly across the year, regardless of when it was actually taken.

Quarterly payments work better when income is irregular. A large Roth conversion, a one-time capital gain, or rental income that varies by season — those are situations where matching your payment to when the income arrived makes more sense.

Either way, the safe harbor rule protects you from underpayment penalties. Pay at least 100% of what you owed last year (110% if your AGI exceeded $150,000) and no penalty applies even if you end up owing more at filing.

The $1,000 threshold is the other exception. If your total tax due after withholding and credits is under $1,000, the IRS waives the penalty entirely.

You can also mix and match. Some retirees withhold from Social Security and send in a smaller quarterly payment to cover investment income on top.