Some retirees are choosing to never sell their home — and the reasons are both logical and grim

For many retirees, selling the family home makes a lot of sense. They don't need three or four bedrooms anymore, or they don't want the hassle of maintaining a large property. Maybe stairs have become impractical. Or maybe they want to relocate in their golden years.

After all, empty-nest baby boomers own 28% of the nation's large homes, according to a report from Redfin.

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But there's another reason selling might make sense: Many retirees are counting on their home equity to provide financial security in retirement.

Yet, some retirees may choose never to sell, thanks to a little-known Medicare rule. Other retirees may have never heard of it, so they end up with an unexpected bill — only after they've sold their home and moved on with life.

Elizabeth Gavino, principal of financial and retirement planning firm Lewin & Gavino, told Fortune that more clients are "getting blindsided" by this issue. "And it's getting worse."

It's called IRMAA. Here's what you need to know.

How does IRMAA impact your Medicare premiums?

Most Americans know that when you turn 65, you qualify for Medicare. But you may not be aware Medicare comes with a premium surcharge called the income-related monthly adjustment amount (IRMAA) — sometimes referred to as the "Medicare surcharge."

Here's how it works: If you make a lot of money one year, your Medicare Part B (for doctor visits and outpatient services) and Part D premiums (for prescription drug coverage) will jump — two years later.

That's because Medicare bases IRMAA on the modified adjusted gross income (MAGI) that you reported on your tax return two years ago. Surcharges start at $109,000 for individuals and $218,000 for joint filers in 2026.

Being pushed into a higher income tier could mean paying hundreds more each month. For example, in 2026, the standard Part B premium costs $202.90 per month. But if you trigger the surcharge, it can range from $284 to $690 a month.

While Part D prescription drug plans are provided by private health insurance companies — and vary widely — your IRMAA charge will be added to your monthly premium costs.

Selling your home is one way to push yourself into a much higher income tier — even if it's a one-time income boost.