How Roth Conversions Can Trigger Medicare Surcharges, and How Retirees Time Them Around IRMAA

Why the Years Before Age 73 Matter

For many retirees, there is a quiet window of opportunity between the day they stop working and the day required minimum distributions (RMDs) begin. During these years, taxable income often dips. Wages have stopped, Social Security may not have started yet, and mandatory withdrawals from traditional retirement accounts have not kicked in.

Under the SECURE 2.0 Act, RMDs generally begin at age 73. That change pushed back the starting point for forced withdrawals and, in doing so, widened the planning window for people in their early to mid-sixties. Because taxable income is frequently lower during these years, some retirees use the time to convert money from a traditional IRA or 401(k) into a Roth account. A Roth conversion means paying income tax on the amount converted now, in exchange for tax-free growth and tax-free withdrawals later, and no future RMDs on the Roth balance.

The strategy can be sound. But there is a catch that trips up many people who focus only on the income tax math: Medicare.

How a Roth Conversion Affects Medicare Premiums

When you convert money to a Roth, the converted amount counts as taxable income for that year. That single fact ripples outward in ways that are easy to overlook.

Medicare uses a figure called modified adjusted gross income, or MAGI, to decide how much you pay for Part B (which covers doctor visits and outpatient care) and Part D (prescription drug coverage). Most people pay the standard premium. But higher earners pay an extra amount called the Income-Related Monthly Adjustment Amount, known by its acronym IRMAA.

A Roth conversion inflates your MAGI for the year you make it. If that higher income crosses an IRMAA threshold, your Medicare premiums rise. And because a conversion that looks efficient on the income tax side can quietly add hundreds of dollars a year in Medicare costs, the surcharge deserves attention before you convert, not after.

The Two-Year Lookback

One feature of IRMAA surprises almost everyone the first time they encounter it: the surcharge is based on your income from two years earlier.

Medicare determines your 2026 premiums using the tax return you filed for the 2024 tax year. This two-year lookback means a large Roth conversion done today does not raise your premiums today. It raises them two years from now. A conversion in 2026, for example, would affect your Medicare premiums in 2028.

That delay makes the surcharge easy to forget in the moment and unpleasant to discover later. Planning ahead means thinking not just about this year's tax bill but about the Medicare bill that arrives two years down the road.

The 2026 Numbers

The Centers for Medicare & Medicaid Services (CMS) sets the standard Part B premium at $202.90 per month for 2026. Retirees whose income stays below the first IRMAA threshold pay that standard amount.

The first IRMAA bracket for 2026 begins at $109,000 of modified adjusted gross income for single filers, and $218,000 for married couples filing jointly. Cross that line by even a single dollar, and the surcharge applies for the full year. There is no gradual phase-in within a bracket. The thresholds work like a series of steps rather than a smooth ramp, which is why crossing one matters so much.

A conversion that pushes a single filer from $105,000 to $112,000 of MAGI, for instance, moves them past the $109,000 threshold and into surcharge territory. The tax savings from the conversion might still be worthwhile, but the added Medicare cost changes the calculation.

Why Retirees Often Spread Conversions Over Several Years

Because IRMAA thresholds create sharp cliffs, doing one enormous conversion in a single year can be an expensive way to shift money into a Roth. A large lump sum is more likely to leap over one or more brackets, triggering higher premiums and pushing income into higher tax rates at the same time.

Instead, many retirees convert smaller amounts over multiple years. The goal is to fill up income "room" beneath a chosen threshold each year without spilling over it. Converting, say, $30,000 a year for five years may keep each year's income under an IRMAA line, whereas converting $150,000 all at once almost certainly would not.

This is where the pre-RMD window becomes so useful. The years between retirement and age 73 offer a stretch of time to spread conversions out, one measured slice at a time, before RMDs begin adding their own mandatory income to the picture.

Putting the Pieces Together

A Roth conversion is not simply a tax decision. It touches your income tax bracket, your Medicare premiums two years later, and, potentially, the taxation of your Social Security benefits. The 2026 figures, a $202.90 standard Part B premium and IRMAA thresholds of $109,000 for singles and $218,000 for couples, give retirees concrete lines to plan around.

Sizing conversions carefully, watching the two-year lookback, and using the pre-73 window deliberately are what separate a conversion that quietly works from one that quietly costs more than expected.