In more than two decades of working with faculty, researchers, physicians, and academic administrators, I have had this conversation more times than I can count: a client approaching 65 who has planned carefully for retirement, accumulated meaningful savings, and mapped out their income sources — only to realize that Medicare was never really part of the equation.
That gap matters more than most people expect. Not because Medicare is complicated in isolation, but because it doesn’t exist in isolation. For professionals in higher education and medicine, Medicare intersects directly with the income structures that define your financial life — TIAA distributions, 403(b) required minimum distributions, pension income, deferred compensation, and in many cases, consulting or part-time income that continues well into retirement. When those pieces aren’t coordinated with your Medicare costs, you can end up paying significantly more than you need to.
This article isn’t a general Medicare overview. It’s a look at the specific planning considerations I see come up most often with my clients — the ones that matter when you’ve spent your career in academic medicine or higher education.
The IRMAA Problem Is Not Just an Income Problem
IRMAA — the Income-Related Monthly Adjustment Amount — is the Medicare surcharge that applies when your income exceeds certain thresholds. In 2026, those thresholds start at $109,000 for individuals and $218,000 for married couples filing jointly.1 What most people understand is that higher income means higher premiums. What most people don’t understand is how that income is measured, and when.
Medicare doesn’t look at what you earned this year. It looks at your Modified Adjusted Gross Income from two years prior. That means the surcharge you’ll face when you enroll at 65 is based on income you reported at 63. For physicians who are still in practice at that point, or faculty members who are winding down but still earning, this is often the highest-income period of their professional lives. The timing couldn’t be worse — or, with the right planning, more controllable.
Here’s where it gets specific to my clients. The IRMAA thresholds work like a cliff, not a slope. One dollar over a threshold and you pay the full surcharge for that entire bracket — potentially hundreds of dollars more per month. In 2026, Part B premiums for high-income beneficiaries range from $284.10 to $689.90 per month depending on income, compared to the standard premium of $202.90.1 That cliff becomes very relevant when you’re making decisions about:
- Roth IRA conversions before Medicare enrollment. Converting pre-tax TIAA or 403(b) funds into a Roth is a powerful long-term tax strategy, but the income it generates flows directly into your MAGI. Done without considering the two-year lookback, a well-intentioned Roth conversion can push you into an IRMAA bracket — or deeper into one — right as you’re enrolling.
- The timing of taking Social Security. Delaying Social Security is often the right move, but the higher monthly benefit you receive by waiting will eventually overlap with required minimum distributions from your retirement accounts. For someone with a large 403(b) balance — common among long-tenured faculty and physicians — that combination can create sustained income above IRMAA thresholds years into retirement.
- Consulting and part-time income. A growing number of physicians and faculty continue to consult or teach part-time after their official retirement date. That income is real, counted in MAGI, and often overlooked in Medicare projections.
The Retirement Income Structure Shapes the Medicare Decision
One of the advantages that academics and physicians often have is predictable income. A defined benefit pension, combined with TIAA income and eventually Social Security, creates a relatively stable income floor. That stability is a planning asset — but it also means that your Medicare costs can be projected with reasonable accuracy if you do the work ahead of time.
Most of my clients who are five or more years from retirement haven’t thought about this yet. By the time they’re two years out, the opportunities to manage it have narrowed. That’s not a reason to panic — it’s a reason to start the conversation earlier.
The practical question for someone with a faculty pension and a 403(b) is this: what will my income actually look like in the two-year window before I enroll in Medicare, and am I making decisions today that will affect my premium bracket? If the answer to that second question is yes — and it usually is — the next question is whether those decisions are being made with full awareness of the Medicare implications.
Medigap or Medicare Advantage — A Different Calculus for Physicians
The choice between Medigap (Medicare Supplement Insurance) and Medicare Advantage is often framed as a cost question: lower premiums with Medicare Advantage versus higher, more predictable costs with Medigap. For many of my clients, particularly physicians, there’s an additional dimension worth considering.
Physicians who have spent their careers within an academic medical system often have strong preferences about where they receive their own care. Medigap covers care at any Medicare-accepting provider nationwide — which matters if you travel frequently in retirement, if you have longstanding relationships with specialists you want to continue seeing, or if you simply want the flexibility to access care without navigating a network.
Medicare Advantage, while often attractive on premium, comes with network restrictions and referral requirements that can create friction — particularly for someone accustomed to navigating healthcare from the inside. I’ve had clients who underestimated how much that friction would matter to them until they were in the middle of it.
There’s also the question of switching later. Medigap plans may require medical underwriting if you want to change after your initial enrollment window, which means that a health condition diagnosed after you enroll could affect your ability to move to a different plan. The decision made at 65 often has longer legs than people expect.
Enrollment Timing and the Penalties That Don’t Go Away
Academic professionals sometimes have more flexibility around retirement timing than their peers in other industries. A tenured faculty member might teach into their late 60s; a physician might reduce their clinical load gradually rather than stopping all at once. That flexibility is valuable, but it can create a specific Medicare risk if not managed carefully.
If you have employer-sponsored health coverage through active employment — not retirement coverage, active employment — you can delay Medicare enrollment without penalty. The key word is active. Coverage through a retiree health plan doesn’t qualify for the same exception. Missing the Special Enrollment Period associated with leaving active employment can trigger a permanent 10% penalty on Part B premiums for every 12-month period the enrollment was delayed, and those penalties don’t age out.2 At the 2026 standard premium of $202.90 per month, even a two-year delay adds a permanent 20% surcharge to every monthly bill you’ll ever receive.
For physicians with complex employment arrangements — hospital employment, group practice, and academic appointments sometimes overlap — knowing exactly when your active coverage ends is worth clarifying well before you need to act on it.
The Planning Principle That Ties It Together
Medicare isn’t a benefits decision. It’s a financial planning decision — one that connects directly to your income strategy, your tax situation, and the lifestyle you’ve built over a long career. The professionals I work with have spent decades in institutions that required precision and long-term thinking. Retirement planning deserves the same approach.
The clients who navigate Medicare most successfully are the ones who brought it into the conversation early — not at 64, but at 60 or 62, when there was still time to shape the two-year income picture that determines their premium bracket. The ones who struggle are often the ones who assumed Medicare would sort itself out alongside everything else.
If you’re within five years of retirement — or if you’re already there and haven’t revisited this — it’s worth a conversation. The decisions are manageable. They just require being made intentionally.
David Wheatley, CLU® ChFC®, is a Senior Partner and financial advisor at Tidewater Wealth Management in New Haven, Connecticut. He specializes in retirement planning for higher education professionals and physicians, with over 20 years of experience in tax-efficient income distribution and estate strategies.
References
- Centers for Medicare & Medicaid Services. (November 14, 2025). 2026 Medicare Parts A & B Premiums and Deductibles. CMS.gov. https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles
- Medicare.gov. (2026). Avoid Late Enrollment Penalties. Medicare.gov. https://www.medicare.gov/basics/costs/medicare-costs/avoid-penalties
- Social Security Administration. (2026). IRMAA: Income-Related Monthly Adjustment Amounts. SSA.gov. https://www.ssa.gov/benefits/medicare/medicare-premiums.html