A $1.9 Million Portfolio at 75: The Withdrawal Order That Keeps RMDs From Triggering IRMAA

A $1.9 Million Portfolio at 75: The Withdrawal Order That Keeps RMDs From Triggering IRMAA

David Beren

Fri, August 28, 2026 at 8:41 PM GMT+3 5 min read

Quick Read

• IRMAA's cliff structure means crossing the $109,000 single-filer threshold by $1 jumps Part B Medicare premiums from $203 to $284 per month.

• Taking RMDs first, funding spending from taxable accounts second, and tapping Roth last keeps discretionary income from pushing MAGI over IRMAA brackets.

• QCDs satisfy RMDs without entering AGI, making them the most efficient IRMAA management tool available to charitably inclined retirees.

• Read More: Learn 7 ways to generate income with a $1,000,000+ portfolio (sponsor)

A $1.9 million portfolio at 75 is comfortable until the required minimum distribution (RMD) hits. RMDs are the amount the IRS forces you to withdraw each year from pre-tax retirement accounts. At 75, that distribution can push modified adjusted gross income (MAGI) across an Income-Related Monthly Adjustment Amount (IRMAA) threshold, which raises Medicare Part B and Part D premiums. The order in which you draw from taxable, tax-deferred, and Roth buckets determines whether that happens.

How the IRMAA Cliff Works

IRMAA works like a cliff, not a gentle slope. Go one dollar over a bracket, and you pay the full surcharge for the entire year. For 2026, a single filer with MAGI at or below $109,000 pays the standard Part B premium of about $203. Cross into the next tier, and that monthly bill jumps to roughly $284, with a $15 Part D adjustment tacked on. At the top end, MAGI of $500,000 or more for singles, or $750,000 for joint filers, pushes the Part B premium to about $690 a month.

The two-year lookback complicates planning. The Social Security Administration uses the tax return from two years prior to set today's premium. A Roth conversion or large capital gain taken this year appears in Medicare premiums two years later. That lag is why you must plan sequencing decisions before RMDs begin.

Withdrawal Order That Manages MAGI

The standard framework at 75 assumes three buckets: a taxable brokerage account, a traditional IRA or 401(k), and Roth accounts. RMDs are mandatory from the traditional side. Everything else is discretionary.

A $1,000,000 Income Portfolio

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1. Take the RMD first. As Suze Orman put it, "Whether you take RMDs or you give them away through a QCD, you have to do that before you can convert." The distribution is not optional. What you control is what you layer on top of it.

2. Fund the rest of the spending from taxable accounts. Long-term capital gains and qualified dividends are taxed at preferential rates, and only the gain portion of a sale counts as income. With the 10-Year Treasury yield near 5% and the federal funds upper bound near 4%, short taxable bonds and T-bills can service annual spending without adding a full dollar of ordinary income for each dollar withdrawn.

3. Use Roth withdrawals as the MAGI safety valve. Roth distributions are not counted in MAGI. If a lumpy expense would push you over an IRMAA bracket, a Roth withdrawal covers it without triggering the cliff.

QCDs, Conversions, and Asset Location

A qualified charitable distribution (QCD) sends money directly from an IRA to a qualified charity. It satisfies the RMD but never enters adjusted gross income (AGI). For a charitably inclined retiree, this is the cleanest IRMAA tool available.

Roth conversions work best in years before RMDs begin, when taxable income is lowest. Clark Howard's guest advisor outlined a listener plan to convert $90,000 while staying inside the 24% bracket, using the earlier window to shrink the future RMD base. For 2026, the 24% bracket runs to $105,700 for singles and $211,400 for joint filers, and the standard deduction is $16,100 for singles and $32,200 for joint filers. At 75, the conversion window is narrower, but partial conversions still lower future RMDs.

Where you hold your assets matters just as much as what you hold. High-yield investments that throw off ordinary income belong in the IRA, where they can grow tax-deferred. Growth stocks with low current yield are better off in the Roth or a taxable account, since their gains will either escape tax entirely or be taxed at the more favorable capital gains rates.

When Paying the Surcharge Is Right

Avoiding IRMAA is not always the goal. Paying a surcharge on a larger, better-diversified portfolio can beat contorting a withdrawal plan around brackets. A recent 24/7 Wall St. analysis found that $122,000 in 401(k) withdrawals can layer on roughly $42,000 in IRMAA surcharges, but that math only justifies action when the alternative preserves the same after-tax outcome (we cataloged IRMAA and the other premium traps retirees miss in a free Medicare guide). If a life-changing event such as retirement, loss of a spouse, or work stoppage reduces income, Form SSA-44 lets you appeal the surcharge based on current income rather than the two-year-old return.

What to Do Next

• Pull your projected 2026 MAGI and compare it against the $109,000 single and $218,000 joint thresholds. Every subsequent decision follows from how much headroom you have.

• If you give to charity, route this year's RMD through a QCD before writing a check from a taxable account.

• Model a Roth withdrawal as your year-end MAGI safety valve. Also plan for the 2027 Social Security COLA tracking near 3.1%, which will lift benefit income and MAGI at the same time.

A $1,000,000 Income Portfolio

If you've saved over $1,000,000, this guide is for you. The last thing you want in retirement is to run out of money, you want your money to generate lasting income while you enjoy your life.

Now you can learn the strategies wealthy retirees use to fund their retirement with The Definitive Guide to Retirement Income from Fisher Investments. Download the guide today! (sponsor)

Contact editorial@247wallst.com for any questions or corrections.