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Avoid rising IRMAA surcharges and discover how volunteering and part-time work keep more of your Social Security benefits tax-free.
By
Kate Schubel
published
18 April 2026
in Features
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Signup + An account already exists for this email address, please log in. Subscribe to our newsletterIt's not uncommon for retirees to hit a wall of boredom. After you turn in your employee badge and log off the work computer for the last time, those first few "Well, what now?" mornings can feel surprisingly challenging.
But that void is actually an opportunity to have some fun. Studies show that retirees who stay actively engaged in physical or social activities tend to beat the retirement blues and may even live longer.
Plus, beyond the health benefits, an active lifestyle can actually lower your taxes on items like Social Security benefits and Medicare. With 2026 IRMAA surcharges reaching new highs and standard deductions for older adults shifting, your favorite activities could be the key to keeping your taxable income in check.
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Sign upHere's how retirees can leverage an active lifestyle to navigate the 2026 tax landscape and make their "fun" pay for itself.
Things to do in retirement: How to stop boredom
The U.S. Centers for Disease Control and Prevention (CDC) reports that staying physically active in retirement helps prevent or manage chronic conditions like heart disease, stroke, Type 2 diabetes, and certain cancers. Plus, regular physical activities like pickleball or swimming can help regulate sleep patterns and mental health.
Yet sports are only one way of reaping the health benefits of an active retirement:
- Volunteering and charitable activities: About one in four adults 65 and older volunteers each year, according to America's Health Rankings. Regular volunteering can be associated with a lower risk of cognitive decline and dementia, as well as a lower rate of depression.
- "Unretirement": According to a recent survey, approximately one in 8 older adults has rejoined the workforce (or plans to) in 2026. Going back to work can increase a sense of purpose and help maintain cognitive function in retirement.
- New ventures: Around 30% of working Americans in their 70s now run their own businesses, with many others using their "golden years" to master new skills or interests.
If you've heard enough about the health benefits of staying busy and are asking, "What's the real bottom line?" Look at your tax return. Beyond the physical and mental perks, staying engaged through work, volunteering, or interests can actually be a strategic tax move.
1. Lower 2026 IRMAA (Medicare premiums) and Social Security taxes
The income-related monthly adjustment amount (IRMAA) is a surcharge on Medicare Part B and D premiums. It's based on your modified adjusted gross income (MAGI) from two years prior. So, for 2026, the SSA sends IRMAA notices based on the 2024 tax return data.
An active retirement helps you dodge these (and other retirement taxes) in several ways:
- Reduce MAGI through part-time work. If you continue to consult or work part-time, you can often defer taking taxable withdrawals from traditional IRAs or 401(k)s. This may keep your income below the 2026 IRMAA thresholds (which start at $109,000 for individuals and $218,000 for couples).
- Minimize taxes on Social Security benefits. By earning a small paycheck instead of taking large retirement account distributions, you may even lower your Social Security benefit taxes to the 0% to 50% tax tiers, rather than the 85% tier (depending on your overall income, tax filing status, and age).
- Lower Medicare and insurance costs through wellness. Exercising regularly improves your health, which can lead to lower out-of-pocket medical expenses, thereby reducing the amount you need to withdraw from retirement accounts (and reducing your overall taxable income).
- Wellness benefits in Medigap. Many Medicare supplemental plans (Medigap, for instance) or Medicare Advantage plans offer free gym memberships or fitness discounts, which provide a tax-free benefit.
2. 2026 HSA preservation and utilization
A health savings account (HSA) can be a powerful tool for active retirees (especially those hitting the golf course or hiking trails). Because HSA funds are used tax-free for qualifying medical expenses, they can help "subsidize" an active lifestyle.
And unlike a 401(k), an HSA has no required minimum distributions (RMDs), allowing your "activity fund" to grow tax-free indefinitely.
Here are a few examples of HSA-eligible expenses for active retirees.
- Active vision and hearing. Prescription sports goggles for the court, contact lenses, or hearing aids to keep you engaged in your ballroom dancing class or bridge club.
- Exercise gear (with exception). Although general gym memberships aren't covered, if a doctor provides a letter of medical necessity (LMN) for a condition like hypertension or obesity, your HSA can often pay for fitness trackers or even specialized exercise equipment.
- Active recovery. Over-the-counter medications, like allergy meds for golfers, first-aid kits for hikers, and even sunscreens (SPF 15+), are all HSA-eligible without a prescription.
If you are 65 or older, the "penalty" for non-medical withdrawals disappears. While you'll pay ordinary federal income tax rates on the withdrawal (just like an IRA), you can use the funds for anything, from a new bike to a national park pass, penalty-free.
And though you can't contribute to an HSA once you're on Medicare, you can use existing funds to pay Medicare premiums (Parts B, C, and D) tax-free.
Note: You may also be eligible for the medical expense deduction on qualifying expenses, but you must itemize, have expenses exceed 7.5% of your AGI, and cannot "double-dip" those expenses with tax-free HSA withdrawals.
3. Active retirement living through volunteering in 2026
Another tax-smart way to stay active is through volunteerism. Beyond the benefit of staying connected with the community, your service can actually lower your taxable income, though only if you itemize your deductions.
What's potentially deductible?
You can't deduct the value of your time. But you may be eligible to deduct unreimbursed costs incurred during your volunteer time, like:
- Volunteer mileage. The IRS volunteer rate is $.14 per mile for 2026. Keep a simple log of your trips to the food bank, animal shelter, or community center for your tax paperwork, and you could be eligible for a deduction.
- Travel and lodging. If your volunteer work requires an overnight stay (such as a multi-day trail restoration project or a disaster relief trip), your lodging and 50% of your meals may be deductible. (Provided there is no significant element of "personal pleasure.")
- Uniforms and supplies. Specialized clothing (like a docent's vest or safety gear not suitable for everyday use) or supplies you buy for the organization (postage, stationery, or event decor) could be federally deductible.
However, starting in 2026, new charitable deduction rules stipulate a 0.5% floor for adjusted gross income (AGI) for qualified expenses. This means you must now clear that hurdle before you can deduct a portion of your charitable contributions under the new IRS rules.
For more information, check out Kiplinger's report, 3 Major Changes to the 2026 Charitable Deduction.
Read More
- 'I Play Pickleball in Retirement.' Is It HSA-Eligible?
- The Rubber Duck Rule of Retirement Tax Planning
- Retirement Tax Traps to Watch in 2026
Kate SchubelTax WriterKate Schubel, CPA, is a tax writer for Kiplinger.com. With a focus on retirement planning, state-level taxation, and affordable living, Kate specializes in translating complex tax codes into actionable strategies for retirees and their families. From "Cheapest Places to Live" to charitable giving, she bridges the gap between technical compliance and lifestyle finance.
