Do TRICARE For Life and Medicare Part B Premiums Rise With Your Income?

Do I have to keep Part B to keep TRICARE For Life?

Yes. TRICARE For Life requires both Medicare Part A and Part B, with one exception: while the sponsor is still on active duty, Part B can wait. Once you're retired and 65, dropping Part B ends TRICARE For Life with it, because TRICARE pays second after Medicare.

The Medicare (CMS) standard Part B premium for 2026 is $202.90 a month, or $2,434.80 a year, plus a $283 annual deductible. TRICARE For Life has no enrollment fee. It picks up what Medicare leaves, so you carry one premium, not two.

Income shaping gets a simple test. If your joint MAGI sits $50K or more below the $218K line, don't bend your TSP income draws around IRMAA. If a planned draw would put you within about $20K of a tier line, that draw is worth timing.

First Premier Bank puts one decision on the roadmap first: the Part B start month, with its due date. The income questions come after that, one at a time.

What the benefit costs

When income shaping is worth the effort

First step: your 65th birthday month on the calendar

Gather your birth date and the date your TRICARE Prime or Select coverage ends. That happens when you become Medicare-eligible at 65. Then put these dates on one page, in calendar order.

Find the 65th birthday row first in the checklist below; every other row hangs off it.

Decide to sign up in the 3 months before your birthday month. Part B and TRICARE For Life then start together on the 1st of that month. The slip people make is waiting until the birthday month or later: Part B starts the month after you sign up, and TRICARE coverage has a gap in between. If you're still on active duty at 65, Part B can wait, and a special enrollment period runs 8 months after active duty ends.

Dates in calendar order

The slip at this step

• Tax year you turn 65: this return sets your first premium.
• 3 months before your birthday month: the Initial Enrollment Period opens.
• Birthday month: TRICARE For Life starts if Part B is already in place.
• 3 months after: they close the 7-month window.
• SSA premium notice: it names the MAGI Social Security used.
• Each fall: Medicare recalculates the premium for the next year.
• Age 73, or 75 if you were born in 1960 or later: RMDs start under IRS rules.

Second step: the tax return from the year you turn 63

Gather the Form 1040 from the year you turn 65. IRMAA uses modified adjusted gross income: your adjusted gross income plus tax-exempt interest. For 2026 premiums, Medicare uses 2024 returns, so the lookback runs two calendar years.

For couples, the first three tiers look like this. Each line is a cliff: $1 over and you pay the full next tier, not a slice of it.

If one spouse is widowed, the single lines apply instead: $109K, $137K and $171K. The same income can then land several tiers higher, and the Survivor Benefit Plan analysis is worth reading with that in mind.

Decide which income lands in that tax year. Traditional TSP and IRA income draws, Roth conversions, capital gains and civilian salary all count. Qualified Roth TSP and Roth IRA draws don't. VA disability compensation isn't taxable, so it isn't in MAGI either; what the 1099-R shows for retired pay is covered in our article on military retirement taxes.

The slip here is assuming this year's income sets this year's premium. It doesn't; Medicare reads the return from two tax years back.

What counts as MAGI

Couples, widowed spouses and the cliff

Andre and Miriam at 65, one $40K draw apart

Hypothetical: Andre, 39, is a Marine gunnery sergeant 6 months from retiring at 20 years under High-3. Miriam, 37, is a dental hygienist. They have 3 kids and rent near base. Andre will start a $95K logistics job and leave the $420K in his TSP alone for now. The numbers below picture Andre at 65 and Miriam at 63, at 2026 premiums and tiers, for illustration only. The real figures will be different by then.

Household A had $210K of joint MAGI in the year Andre turned 63. That's under the $218K line, so Andre pays $202.90 a month for Part B.

Household B is identical except for one extra $40K traditional TSP draw that year, to help a child with a wedding. $210K + $40K = $250K, the second tier, so Andre pays $284.10. $284.10 − $202.90 = $81.20 a month, and $81.20 × 12 = $974.40 for the year, on top of the income tax on the $40K.

IRMAA reads joint MAGI, but only the spouse on Medicare pays it. Miriam is 63 and not enrolled, so the surcharge is Andre's alone. Once she enrolls, the same income would hit both premiums: 2 × $974.40 = $1,948.80 a year. You can put your own household's figures into our calculator and see both versions side by side.

Moving the draw doesn't save tax. The $40K carries roughly the same income tax at 62 or 63; the only thing that changes is whether Medicare reads that return. Had they taken it at 62, MAGI in the lookback year would have stayed at $210K. A Roth TSP draw would also hold MAGI at $210K, but that tax was paid when the money went in, so it was shifted, not saved.

Taking the $40K at 63 instead of 62 is one year too late. It lands in the tax year Medicare uses for the first premium and adds $974.40 to Andre's first year of Part B, with the same income tax either way. The rule that follows: if you'll start Part B at 65, take any large one-time traditional TSP or IRA draw in the tax year you turn 62 or earlier, because that year never sets a Medicare premium. From 63 on, keep a planned draw under the next joint tier line ($218K, $274K or $342K at 2026 figures).

None of this changes what Andre does today. Leaving the $420K in the TSP while he starts the $95K job is fine. First Premier Bank would simply tag which future draws are traditional and which are Roth, so the year-63 return can be planned 20-plus years ahead. Tiers and the premium reset every year, so projecting 26 years out shows the mechanics, not his actual future cost.

Two households, one draw

Shifted, not saved

Retiree coverage and the 10% penalty

Only group coverage based on current employment, yours or a spouse's, lets you delay Part B without the late penalty. TRICARE retiree coverage and other retiree plans don't count. A late start adds 10% for each full 12 months you could have had Part B, generally for as long as you have it. And skipping Part B ends TRICARE For Life anyway, so a retiree who waits at 65 loses the second payer and pays more later.

Third step: can I undo a higher premium later?

An IRMAA tier lasts one year. Medicare recalculates it every year from a newer tax return, so a one-time spike from a single draw usually fades after 12 months. The Part B late penalty is different: it generally stays for as long as you have Part B.

Gather proof when a life-changing event cut your income. Form SSA-44 covers events such as work stoppage, marriage, divorce or a spouse's death. If Andre's civilian job ends at 64, the drop in salary can qualify.

Some things don't qualify: a Roth conversion, a one-time TSP draw or a large capital gain you chose to take. If SSA used a return that was later amended, send it the corrected figures. Veterans who get Medicare earlier through disability follow different timing and should check their own enrollment dates.

Fourth step: should we save Roth to keep Part B lower?

Roth saving helps only if you're likely to sit near a tier line at 63 and after. Traditional TSP contributions cut tax now but raise MAGI later through draws and RMDs; qualified Roth draws stay out of MAGI. A household far below $218K mostly just moves its tax cost to an earlier year.

The households that gain are the ones with retired pay, two Social Security checks and RMDs from a large traditional balance all landing in the same years. For them, Roth money is a way to keep a few draws out of the lookback return. The cost is real: Roth contributions take tax now, when a young family may need that cash. Every investment also carries the risk of loss, including the money you put in, so a Roth balance's future size is never promised.

The full bracket math sits on our page about Roth TSP versus traditional TSP when a pension already fills brackets. Here the only question is the Medicare premium.

Fifth step: the IRMAA letter each year

Check the SSA notice each year for the tax year and MAGI it used, because a wrong figure is easier to fix right away. Once you claim Social Security, the Part B premium comes out of the check. Before that, Medicare bills you every 3 months. Keep the letter in the same folder as your Form 1040 and your TSP statements.

Where First Premier Bank starts with your Part B numbers

First Premier Bank would first pull, or project, the return you file for the year you turn 65 and mark how far its MAGI sits from the next joint tier line. Next it would list which TSP and IRA balances are traditional and which are Roth. Then it would put your Part B sign-up month on the roadmap with its due date.