Medicare for Teachers: Pension, 403(b), and IRMAA Planning

Many public school teachers reach Medicare age carrying a state pension, a supplemental 403(b) or 457(b), and — after the WEP/GPO repeal — more Social Security income than they ever expected. The result is a stacking problem that quietly pushes retirees into IRMAA territory and adds $1,148–$6,936 per person per year in Medicare Part B and D surcharges. Here is what to do about it — ideally before you retire.

How teacher pension income counts for IRMAA

IRMAA MAGI equals your Adjusted Gross Income (Form 1040 Line 11) plus tax-exempt interest (Line 2a). Every dollar of defined benefit pension income — from CalSTRS, Texas TRS, STRS Ohio, Illinois TRS, NYSTRS, or any other state teacher retirement system — is fully taxable ordinary income and flows into MAGI dollar-for-dollar.²

Long-service teachers can receive substantially more than the statewide averages. A 30-year veteran in California with a $95,000 final salary might retire with a $70,000–$80,000 annual pension. At that level, a single filer only needs $29,000–$39,000 from other sources (SS, 403(b) withdrawals, RMDs) to cross the $109,000 Tier 1 threshold.

Approximately 40% of public school teachers — about 1.2 million in 15 states plus DC — are not covered by Social Security for their classroom employment.³ If you are in one of those states but also worked SS-covered jobs (prior private-sector employment, summer work, or a working spouse), the WEP/GPO repeal now affects your household income and IRMAA exposure.

The WEP and GPO repeal: more SS income, more IRMAA to plan around

On January 5, 2025, President Biden signed the Social Security Fairness Act (H.R. 82), repealing both the Windfall Elimination Provision and the Government Pension Offset retroactive to January 2024.⁴ SSA began adjusting monthly payments in February 2025 and sent retroactive lump-sum checks for the January 2024–February 2025 period to affected beneficiaries.

This is a significant benefit increase for affected teachers — but it creates a new Medicare premium challenge:

• Higher monthly SS benefit — if you previously had your SS benefit reduced by WEP (because you also had pension income from non-SS employment), your monthly check is now higher. That increase is permanent SS income that counts toward IRMAA MAGI every year going forward.
• Restored spousal and survivor benefits — if GPO had reduced or eliminated your SS spousal or survivor benefit because of your government pension, those benefits are now fully restored. A surviving-spouse benefit of $1,500–$3,000/month that was previously zeroed out now flows fully into IRMAA MAGI.
• Retroactive lump sums and MAGI spikes — SSA sent one-time payments covering January 2024 through the start of new monthly payments. Those lump sums counted as 2025 income, which determines 2027 Medicare premiums. SSA-44 does not apply here (no qualifying life-changing event for a retroactive SS benefit increase), so affected retirees may face a one-time IRMAA spike in 2027 that resolves the following year.

If you received a WEP or GPO repeal benefit increase, verify the IRMAA impact by plugging your new monthly SS amount into the calculator below and checking your 2025 projected MAGI against the 2027 brackets.

403(b) and 457(b) withdrawals on top of pension

Most teachers supplement their defined benefit pension with a 403(b) — either a district-sponsored plan, a personal tax-sheltered annuity (TSA), or both. Some teachers in state and municipal systems also have access to governmental 457(b) plans. Traditional (pre-tax) 403(b) and 457(b) distributions are fully ordinary income in the year received and count in full toward IRMAA MAGI.⁵

The QCD pathway requires a rollover: 403(b) and governmental 457(b) accounts must first be rolled to a traditional IRA before QCDs can be executed. This is a common and tax-free rollover under IRC §402 and §408, but it must be done before age 70½ to align timing. Non-governmental 457(b) plans (from nonprofit or tax-exempt employers) cannot be rolled to an IRA — QCDs are not available from those plans.

2026 IRMAA brackets: where the cliffs are

Your 2026 Medicare premiums are based on your 2024 MAGI. IRMAA is cliff-based — one dollar over a threshold moves your entire income into the next tier.²

Per person. A couple both in Tier 1 pays $2,296 combined; both in Tier 2 pays $5,770 combined. Source: CMS/SSA POMS, verified June 2026.

Estimate your IRMAA: teacher income calculator

Enter your retirement income sources to estimate your MAGI and IRMAA tier. Uses the 2026 brackets; based on 2024 MAGI for 2026 premiums.

Medicare enrollment timing for teachers

Teachers face a few enrollment quirks that salaried employees in the private sector don't:

Still working at 65. If you are teaching full-time at 65 with active employer health coverage, you generally do not need to enroll in Medicare Part B right away — as long as the school district has 20 or more employees and you have active (not COBRA) coverage. You have an 8-month Special Enrollment Period starting when employment or group coverage ends, whichever comes first. You can delay Part A too if you contribute to an HSA (Part A enrollment triggers a retroactive HSA contribution penalty going back up to 6 months).

The summer retirement trap. Many teachers retire June 30 or July 1. If your district coverage ends at the close of the school year and you turn 65 during the summer, your 7-month Initial Enrollment Period may overlap in ways that affect when Part B coverage actually begins. Enrolling in the first 3 months of your IEP means coverage starts on the first day of your birthday month; enrolling in months 4–7 delays coverage by 1–3 months. Plan the timing so your group coverage ending date and Medicare start date don't create a gap.

Retiree health plans from the state or district. Some states offer retiree health plans that bridge coverage until Medicare age or coordinate with Medicare as secondary. Check whether this plan qualifies as creditable coverage for Part D purposes — if so, you can delay Part D enrollment without penalty while using the retiree plan. If not, you will need to enroll in a standalone PDP (Part D plan) to avoid the permanent late enrollment penalty.

First-year IRMAA trap. If you retired in 2025 after a high-income working year, your 2025 MAGI (still including your final year of salary) will set your 2027 Medicare premiums. The two-year look-back means the high salary year follows you into Medicare. File Form SSA-44 (Life Changing Event) if retirement caused your income to drop — SSA will use your current, lower income estimate instead of the old tax return.

Pre-retirement planning: the Roth conversion window

Many teachers know exactly when they will retire — the defined benefit pension formula makes it easy to model. That predictability creates a planning advantage: the years between retiring and collecting full SS (or before RMDs begin at 73) are often the lowest-income years in a teacher's life, making them the optimal window for Roth conversions.

If you retire at 62 and delay Social Security to 70:

• Your income between 62 and 65 consists of pension only (SS not yet started, no Medicare yet)
• Your income at 65 adds Medicare but pension may be your only MAGI source if you haven't started 403(b) withdrawals
• Ages 65–70: pension + any IRA/403(b) draws, but no SS yet — lowest MAGI period on Medicare
• Age 70: SS kicks in, adding $18,000–$30,000/year to MAGI permanently

Converting traditional IRA or 403(b) assets to Roth during ages 62–69 "fills" the lower IRMAA brackets at a lower tax cost and permanently removes that future income from MAGI. Every dollar converted before SS starts is a dollar that won't count toward IRMAA once SS is in full payment.

The 2026 403(b) catch-up contribution limits also provide a pre-retirement lever. If you are still working at 60–63, the SECURE 2.0 super catch-up lets you contribute up to $35,750/year ($24,500 base + $11,250 super catch-up) to a traditional 403(b) — or direct that super catch-up entirely into a Roth 403(b) if your plan offers it.⁸ Qualified Roth 403(b) distributions in retirement are permanently excluded from IRMAA MAGI.

5 strategies to reduce IRMAA on a teacher income stack

1. QCDs if you are age 70½ or older and charitably inclined. A Qualified Charitable Distribution from an IRA (after rolling your 403(b) or 457(b) over to an IRA) excludes up to $111,000/year per person from AGI entirely — not just as a deduction, but as a full MAGI bypass. For a single filer with $115,000 MAGI who donates $10,000 to charity, a QCD drops MAGI to $105,000 and eliminates the Tier 1 IRMAA surcharge of $1,148/year. See 7 IRMAA reduction strategies for the full playbook.

2. Calibrate 403(b) withdrawals around IRMAA cliffs. If your pension + SS puts you at $105,000 MAGI (single), you have a $4,000 buffer before the $109,000 Tier 1 threshold. Taking more than $4,000 from a traditional 403(b) in that year triggers a full year of Tier 1 IRMAA. Instead, draw from taxable accounts or Roth accounts for amounts above the cliff.

3. Maximize Roth 403(b) contributions before retirement if your plan allows it. Directing catch-up contributions to the Roth option creates a pool of IRMAA-free income. Even $50,000 in Roth 403(b) assets generating $4,000/year in tax-free retirement income is worth roughly $46/year in avoided IRMAA (if it keeps you under a threshold), or more if it prevents a tier jump entirely.

4. File SSA-44 in your first Medicare year. If your pension started or you retired during the year you enrolled in Medicare, your previous year's income (including your final salary) was higher than your current year income. Form SSA-44 lets you ask SSA to use current-year estimates instead. The qualifying event is retirement. This can reduce your Part B premium in the first one or two Medicare years while SSA catches up to your new lower income baseline.

5. Time capital gains and RMDs around IRMAA brackets. Capital gains on appreciated investments (mutual funds, stocks, real estate) count toward IRMAA MAGI even if taxed at 0% federally. RMDs beginning at age 73 will also add to your stack. Spread realizations across years, coordinate the timing with other income sources, and use loss harvesting to offset gains when possible. See capital gains and IRMAA and RMDs and Medicare premiums for detailed guidance.

What a specialist advisor models that is hard to DIY

Running a single IRMAA estimate is simple. The harder problem is the 15–25-year projection: what does your pension + SS + RMDs + 403(b) income look like at age 70, 75, 80 — and how do you minimize lifetime IRMAA while keeping enough withdrawal flexibility for healthcare, travel, and family needs?

For teachers with a defined benefit pension and supplemental savings, there is almost always a meaningful window between retirement and full SS or RMD onset when Roth conversions, strategic drawdowns, or QCD strategies can permanently reduce your Medicare cost trajectory. That window is the leverage point — but only if you model it before you reach it.

Sources

1. CalSTRS — Retirement Benefits: all-retiree average monthly benefit as of FY2024 is $5,141/month ($61,692/year). Newly retired members in FY2025 averaged approximately $5,740/month. Texas TRS average monthly benefit approximately $2,100/month (~$25,200/year) per TRS 2024 budget documents; derived per-member average from 2024 PAFR. Verified June 2026.
2. SSA POMS HI 01101.020 — IRMAA Sliding Scale Tables: 2026 IRMAA bracket thresholds and Part B/D surcharge amounts. MAGI for IRMAA = AGI + tax-exempt interest. Base Part B premium $202.90/month per CMS. Verified June 2026.
3. TeacherPensions.org — Why Aren't All Teachers Covered by Social Security?: approximately 40% of public K-12 teachers in 15 states plus DC are not covered by Social Security for classroom employment, affecting approximately 1.2 million teachers. California, Texas, Ohio, Illinois, Massachusetts among the states without SS coverage.
4. SSA.gov — Social Security Fairness Act: H.R. 82 signed into law January 5, 2025, repealing WEP and GPO retroactive to January 2024. Monthly benefit adjustments began February 25, 2025. As of mid-2025 SSA had issued over 3.1 million retroactive payments totaling $17 billion.
5. IRS — 403(b) Retirement Plans: IRC §402(a) — traditional 403(b) distributions are taxable ordinary income in the year received. Governmental 457(b) distributions taxable per IRC §457(a).
6. IRS — Roth IRAs and Designated Roth Accounts: qualified distributions from Roth 403(b) (age 59½+ and 5-year holding period) are excluded from gross income under IRC §402A(d). Not counted in AGI, not counted in IRMAA MAGI. SECURE 2.0 §325 eliminated lifetime RMDs from Roth 403(b) accounts effective 2024.
7. IRS — Qualified Charitable Distributions: IRC §408(d)(8) permits QCDs from IRAs only (not 403(b) or 457(b) directly); 403(b) and governmental 457(b) plans may be rolled to IRA first. 2026 QCD annual limit $111,000 per person per IRS Notice 2025-67, inflation-adjusted under SECURE 2.0.
8. IRS — 403(b) Contribution Limits 2026: elective deferral limit $24,500; age-50–59 and 64+ catch-up $8,000 (total $32,500); ages 60–63 SECURE 2.0 super catch-up $11,250 (total $35,750) per IRS Rev. Proc. 2025-67. Plan must offer the super catch-up for employees to elect it.

Values verified as of June 2026. IRMAA brackets per SSA POMS HI 01101.020. QCD limit per IRS Notice 2025-67. 403(b) limits per IRS Rev. Proc. 2025-67. Consult a licensed advisor for guidance specific to your situation.