TRICARE For Life and Medicare Part B are a package: at age 65 you keep TRICARE For Life only by paying for Part B, which First Command Financial Services builds into retirement budgets. Many retirees assume TRICARE replaces Medicare, but it pays second, after Medicare.
The 2026 Part B premium is $202.90 each month. It rises through IRMAA, the income-related surcharge, once your MAGI (modified adjusted gross income) from 2 years earlier passes $109,000 single or $218,000 joint. If you do nothing, you can miss the 7-month sign-up window, lose TRICARE For Life during the gap, and pay a penalty that stays as long as you have Part B.
For its own households, First Command Financial Services puts the sign-up dates and the income lines into the same written plan as the TSP and IRA withdrawals. What follows runs on a calendar, from age 64 to the yearly review, so you can see what to do and when.
By Elena Rodriguez, CFA — Portfolio Manager | Reviewed by Marcus Thompson, CFAElena manages fixed-income and equity ladders for clients approaching retirement, focusing on sequence-of-returns risk.
A $60,000 lump that lands $21,000 over the single line costs $974.40 in Part B 2 years later. Two $30,000 withdrawals avoid it.
Dana Whitfield, CPA and Tax Director at First Command Financial Services
Keep planned income $5,000 to $10,000 under the next IRMAA line. Then a bad year doesn't land on a cliff.
Marcus Hale, CFP® and Lead Advisor at First Command Financial Services
What age starts the TRICARE For Life Part B clock?
The clock starts at age 65, but the work starts at age 64. TRICARE For Life requires both Medicare Part A and Part B, and it pays after Medicare does. The only exception is while the sponsor is on active duty. Part B costs $202.90 a month in 2026, or $2,434.80 a year.
Part A is premium-free for most people with 40 quarters of work (about 10 years), so Part B is the real bill. Add the $283 Part B deductible Medicare sets for 2026 to the $2,434.80 in premiums and the first year runs about $2,718.
TRICARE For Life has no enrollment fee, and about $2,435 a year buys Medicare plus a second payer. Drop Part B and TRICARE For Life ends with it, so skipping Part B is rarely a saving.
Check that DEERS, the Defense Enrollment Eligibility Reporting System, shows correct data for the sponsor and the spouse. A surviving spouse who hasn't remarried keeps eligibility, and a widow like the hypothetical Ruth, whom we meet below, falls in that group. First Command Financial Services adds the Part B line to the written plan as a fixed cost, next to the TSP and IRA withdrawals that will pay it.
The rule at age 64
Is Part B worth it?
Seven months is the whole window
The Initial Enrollment Period, set by the Social Security Administration and Medicare, runs 7 months: the 3 months before your 65th birthday month, the birthday month itself and the 3 months after it. Enroll in the first 3 months and Part B, and with it TRICARE For Life, starts on the first day of the birthday month with no gap. Enroll later in the window and the start slips by 1 to 3 months. When you reach 64 and 9 months, mark both the opening and closing dates of the window where you will see them.
Each year of delay adds 10% for life
Two years of lateness costs $40.58 each month before you even count the gap in coverage. Signing up 2 full years late adds 20% to the standard premium: $202.90 × 0.20 = $40.58 a month, or $486.96 a year, for as long as you have Part B. On top of that, TRICARE For Life does not pay during the gap.
Enrolling in Part B after the 7-month window is a timing error with a permanent price. Each full 12-month period late adds 10%, and nothing later removes it.
You can start Part B later. The penalty generally stays for life, and the months without TRICARE For Life can't be recovered either.
Retiree coverage such as FEHB in retirement is not based on current employment, so it does not protect you from the penalty. A civilian employer plan based on current work may let Medicare waive the penalty, but TRICARE For Life is not in force during the delay. Call TRICARE before you rely on that route.
What can be undone and what can't
Does retiree coverage count?
How much can one big withdrawal add to Part B 2 years later?
One withdrawal that lifts MAGI a single dollar past $109,000 single raises Part B by $81.20 a month, or $974.40 a year, 2 years later. IRMAA uses MAGI from 2 years earlier, so 2026 premiums use 2024 MAGI. The surcharge works like a cliff, not a slope.
A hypothetical person, Ruth, is 67, the widow of an Army sergeant major. Her home near her grandchildren carries no mortgage, and she holds about $600,000 in an IRA plus an inherited TSP account. Her SBP annuity pays $26,000 and she takes $44,000 from her IRA, so her MAGI is $70,000.
Ruth wants $60,000 more in cash so she never has to sell in a slump. If she withdraws all of it this year, MAGI becomes $130,000, above the $109,000 single line. Two years later her Part B premium is $284.10 instead of $202.90, which is $81.20 × 12 = $974.40 extra.
If she takes $30,000 this year and $30,000 next year, MAGI is $100,000 each year and the surcharge is $0. She ends up with the same cash, keeps the $974.40 and spreads the income tax across 2 years. You can run your own numbers in the calculator on this site.
Part B cost lines for Ruth's situation, 2026 figures; the IRMAA line assumes MAGI of $130,000 two years earlier and the penalty line assumes 2 full years enrolled late.
IRA and inherited TSP withdrawals count toward MAGI. So do second-career wages, a bonus, capital gains from a house or fund sale, and the taxable part of Social Security once claimed. Qualified Roth IRA withdrawals do not count. Part D has its own surcharge on the same income lines, so check the current Part D figures.
Ruth wants cash so she never has to sell in a slump, and that's a fair goal. A retiree who panics and sells at the bottom does far more damage than any surcharge. Before First Command Financial Services moves money from an IRA into cash, it checks where the withdrawal lands against the IRMAA lines for the year 2 years ahead. Split over two years, Ruth still gets her full $60,000 cushion and keeps $974.40.
Ruth's numbers, in the order she would ask
What counts as income
Quick test: if a planned withdrawal, sale or bonus would push MAGI past an IRMAA line, split it across 2 tax years, as long as each year stays under the line. One dollar over costs the full step.
| Cost line | Monthly | Yearly |
|---|---|---|
| Standard Part B premium | $202.90 | $2,434.80 |
| Part B deductible | None | $283 |
| IRMAA tier 2 surcharge | $81.20 | $974.40 |
| Premium in tier 2 year | $284.10 | $3,409.20 |
| Late penalty, 2 years (20%) | $40.58 | $486.96 |
Widowhood moves you to the single brackets
A married couple filing jointly keeps the standard premium up to $218,000 MAGI. A surviving spouse usually files single starting the year after the death, and the line drops to $109,000. Income often barely falls, because the SBP annuity replaces part of the retired pay.
The table compares the 2026 lines for the two filing statuses, using the SSA and Medicare figures set by 2024 MAGI.
A large balance cuts the other way. RMDs, the required minimum distributions, start at age 73, or age 75 for people born in 1960 or later, and can push MAGI over a line without any choice by you. Plan withdrawals in the years before RMDs with the IRMAA line in view.
An early second career shifts the picture too. Wages near $160,000 as a contractor program manager at age 63 set a tier 2 Part B premium at 65. When the job ends, Form SSA-44 lets you ask for a recalculation for a work stoppage. A small balance with a pension well under $109,000 usually stays at the standard premium, and the planning effort there is minimal.
Single or joint
Balances, RMDs and a second career
| Monthly Part B premium | Single MAGI up to | Joint MAGI up to |
|---|---|---|
| $202.90 | $109,000 | $218,000 |
| $284.10 | $137,000 | $274,000 |
| $405.80 | $171,000 | $342,000 |
| $527.50 | $205,000 | $410,000 |
| $649.20 | Under $500,000 | Under $750,000 |
How long can a surcharge, a health change or a law change hurt?
A surcharge lasts 1 premium year. Medicare recalculates IRMAA every year from new MAGI that is 2 years old, so one high-income year means one year of surcharge. A health event or a law change can last longer, which is why you keep room below each line.
A rental house sale or a large bonus is a single-year cost, but it can't be reversed once the tax return is filed. Plenty can go wrong around it. A health event can force an unplanned IRA withdrawal. A market drop can tempt you to sell funds in a taxable account, which is a separate MAGI event, and funds can lose value, so you may get back less than you invested. Congress can also change the thresholds.
Leave room. Keep planned MAGI about $5,000 to $10,000 under the next line and keep some cash set aside, so an emergency does not land on a cliff. Only life-changing events such as the death of a spouse, divorce or work stoppage support an SSA-44 appeal. A voluntary withdrawal does not.
Run this checklist against your own accounts each year:
Ask civilian HR whether the plan is based on current employment and whether they will complete form CMS-L564 when it ends. 'It's retiree coverage' should worry you, because it does not protect you from the penalty. Ask the TSP or IRA custodian which tax year a December withdrawal will post to on the 1099-R. 'It depends on processing' means you should move the request earlier in the month. Ask TRICARE whether your Medicare data reached DEERS. 'Not yet' near the start date calls for a written follow-up.
What can go wrong
Questions and the answers that should worry you
- The 65th birthday month and the 7-month window
- DEERS record current for sponsor and spouse
- Projected MAGI for this year and next against $109,000 single or $218,000 joint
- Every account that will pay out (TSP, inherited TSP, traditional IRA, 401(k))
- Expected wages and bonuses
- Any planned sale of a house or of shares
- The RMD start age
Questions about tricare for life and Medicare part b
How much will Part B cost me each year if my defense contractor salary puts me in the second IRMAA tier?
In 2026 the second tier pays $284.10 a month, which is $3,409.20 a year. That is $974.40 more than the standard $2,434.80. For a single filer, tier 2 means MAGI from 2 years earlier above $109,000 and up to $137,000. The deductible of $283 is separate.
What happens if my second-career job ends after Social Security has already set a higher Part B premium?
You can file Form SSA-44 and ask the Social Security Administration to use a lower income estimate because of a work stoppage. You'll need proof, such as a termination letter. If approved, the premium drops to the tier that fits your new income, for that year.
Can I undo a large IRA withdrawal once it has raised my Part B premium?
Generally no. Once the tax return is filed, the withdrawal is the income Medicare uses 2 years later. An appeal covers life-changing events such as a spouse's death, divorce or work stoppage, not a voluntary withdrawal. The surcharge lasts only 1 premium year, then resets.
At what age does a surviving military spouse need Part B to keep TRICARE For Life?
Generally at age 65, when the spouse becomes eligible for Medicare. TRICARE For Life requires both Part A and Part B, and a surviving spouse who hasn't remarried keeps eligibility. Confirm the DEERS record and your sign-up dates with TRICARE a year ahead, at age 64.
Do withdrawals from a TSP account I inherited from my husband count toward IRMAA?
Yes, taxable withdrawals from an inherited TSP account count toward MAGI, just like IRA withdrawals. Qualified Roth withdrawals do not count. Check the amounts and the tax year before you take money out, because the income sets your Part B premium 2 years later.
If I sell a house in one year, how many years of higher Part B premiums follow?
One. The taxable gain raises MAGI for that single tax year, which sets the Part B premium for 1 year, 2 years later. The IRS home-sale exclusion may shield part of the gain, and only the taxable part counts. The next year's premium is recalculated from new income.
First Command Financial Services and your Part B calendar
First Command Financial Services advisors put the 7-month window, the IRMAA lines and each planned withdrawal into one written plan for households receiving retired pay or an SBP annuity. They also say plainly when your income sits so far below $109,000 that there is nothing to plan. A first conversation starts with the request form, and the exact cost of any work is set out in a written agreement before it begins.
One dollar over the line costs the full step, so split the withdrawal.
Official references
This article is general financial information only, not investment advice tailored to your circumstances. Investing involves risk, including loss of principal. Before making any financial decision, consult a qualified professional about your specific situation.