The Hidden Cost of Selling Bitcoin in Your 60s

I’ve seen this happen more than once.

A client in their 60s decides it’s finally time to take some chips off the table. They sell a meaningful amount of bitcoin, feel great about locking in the gains, and move on.

Then, a couple of years later, they start Medicare, and their premiums are way higher than expected. Not by a little, but by hundreds of dollars per month for the entire year. 

Nothing went wrong. No mistakes. It was IRMAA. 

For clients with bitcoin in their portfolio — especially those sitting on large unrealized gains — a poorly-timed sale can quietly add thousands of dollars in additional Medicare costs.

IRMAA 101 (What’s Actually Going On)

IRMAA (Income-Related Monthly Adjustment Amount) is a surcharge added to your Medicare Part B and Part D premiums when your income crosses certain thresholds.

It’s based on your Modified Adjusted Gross Income (MAGI), which includes:

• Wages
• Capital gains (the big one for bitcoin)
• Dividends and interest
• IRA distributions
• Roth conversions
• And any other taxable income

The part that usually trips people up is the 2-year lookback:

• Medicare premiums at 65 → based on income at 63
• Medicare premiums at 66 → based on income at 64 

So, a big bitcoin sale today can show up as higher Medicare premiums two years from now. And IRMAA isn’t gradual – once you cross a threshold, your premiums jump to the next tier.

• Go $1 over a threshold → you pay the full higher premium.

That’s why this catches people off guard. It’s not just the tax on the gain – it’s capital gains tax plus higher Medicare premiums layered on top. Each high-income year impacts one premium year, and multiple spike years can add up quickly. 

Why This Hits Bitcoin Investors More Often

Bitcoin investors are especially exposed because gains tend to show up like this: 

• Years of HODLing
• Followed by one large sale

That’s exactly the kind of income pattern that can trigger IRMAA. 

Simple example:

• Sell $400k of BTC
• Cost basis = $150k
• Gain = $250k

That $250k gets stacked on top of your ordinary income. 

Now layer in Social Security, pension or annuity income, and other investment income. Suddenly, you’ve got a “spike year” where everything stacks.

For 2026, IRMAA surcharges apply if your 2024 MAGI exceeds $109,000 (single) or $218,000 (married), with these thresholds adjusted annually for inflation. Monthly Medicare Part B premiums for higher-income earners range from $284.10 to $689.90, with additional Part D surcharges ranging from $14.50 to $91.00.

If your MAGI is below the first IRMAA tier, you would pay the standard premium of $202.90/month for Part B and only your plan’s premium for Part D, which varies depending on the private insurance plan you choose for Part D. 

Let’s say you’re married and realize $250k in capital gains on top of $100k of income. That can push your Medicare premiums from about $200/month to roughly $590/month per spouse — over $9,200 in additional costs in a single year.

That’s how people unintentionally jump multiple IRMAA brackets in a single year.

What This Looks Like in Real Life

Let’s simplify a common scenario.

Mr. and Mrs. Client are a few years from Medicare, sitting on a large BTC position.

Two paths:

Path 1 — Big sale later

• No action for a few years
• Then one large BTC sale to help fund retirement

Result:

• Income spikes
• IRMAA kicks in 2 years later
• Premiums jump substantially 

Path 2 — Planned approach

• Gradually realize gains over multiple years
• Use lower-income years intentionally
• Strategically sell bitcoin during a bull market

Result:

• Income stays more controlled
• Fewer IRMAA bracket jumps
• Lower lifetime Medicare costs

The “big sale” approach feels easier, but it’s often the most expensive.

How to Plan Around This

You don’t have to avoid selling your bitcoin. You put in the time, held through the brutal drawdowns and built real wealth because of it. You just have to be intentional about when and how much you sell.

A few levers that matter:

• Spread the gains out: Instead of one large sale, break it into smaller pieces over multiple years.‍
• Utilize lower-income years: The window between retirement and Social Security and pre-RMD years is usually your best opportunity. ‍
• Offset the gains: Make use of tax-loss harvesting to help balance out the gains from your BTC sale and lower your MAGI. ‍
• Donate highly-appreciated BTC: If you’re charitably inclined, donating BTC directly to a donor-advised fund avoids realizing the gain. (Note: this does not reduce MAGI or prevent IRMAA, but it allows you to avoid realizing the gain altogether and can provide a tax deduction.) ‍
• Coordinate everything: These decisions shouldn’t happen in isolation. They need to fit into a broader picture that includes tax planning, your retirement income strategy, and the timing of your other income sources.

What About Simply Not Selling?

Occasionally, the better move may be not selling at all, and a bitcoin-backed loan can be useful here – if used very conservatively. 

Instead of selling bitcoin and triggering a gain, you could borrow against it, which is not a taxable event. This means: 

• No increase to MAGI
• No immediate IRMAA impact

But this isn’t free money. You’re taking on: 

• Price risk (margin calls)
• Counterparty risk (depending on the lender you use)
• Interest costs
• Potential fees

In some cases, this can help delay a sale into a better tax/IRMAA window—but it needs to be carefully evaluated.

Can You Appeal IRMAA?

Sometimes, yes. 

Medicare allows appeals for certain “life-changing events,” such as:

• Retirement
• Divorce
• Death of a spouse. 

But selling bitcoin does not qualify. It’s considered a voluntary decision, not a life event.

So if IRMAA is triggered by a bitcoin sale, you’re almost assuredly stuck with it.

How We Approach This at Gannett Wealth Advisors 

For our clients, IRMAA isn’t an afterthought — it’s part of the plan from the start.

Here’s how we approach this:

• Build multi-year income projections
• Model different bitcoin sale strategies
• Evaluate bitcoin-backed loan scenarios to compare against selling
• Compare IRMAA impact across scenarios
• Coordinate with tax planning, Roth conversions, and withdrawal strategy 

The goal is simple: Help clients use their bitcoin when they need it — without creating avoidable tax and Medicare costs.

Bottom Line

If you’re within a few years of Medicare and sitting on meaningful bitcoin gains, this matters. 

A single large sale can significantly increase your Medicare premiums in the years ahead, but with proper planning, it can usually be avoided or at least minimized. 

If you want help thinking through your situation, reach out to us. We’d be happy to walk through it with you.