Roth Conversions and Medicare: Timing to Avoid IRMAA Surprises

Why timing matters

Roth conversions are an effective tax planning tool because you pay tax now on converted dollars so withdrawals later are tax‑free. But Medicare’s Income‑Related Monthly Adjustment Amount (IRMAA) is calculated from your modified adjusted gross income (MAGI) reported to the Social Security Administration (SSA) — generally using your tax return from two years earlier. A large conversion in Year 1 can therefore increase your Medicare Part B and Part D premiums in Year 3.

This two‑year lookback is the key friction point. Many retirees convert aggressively early in retirement to reduce future Required Minimum Distributions (RMDs) and estate tax exposure. Without planning around IRMAA, those conversions can lead to surprise premium increases for up to two benefit years.

Authoritative sources: CMS and Medicare explain that IRMAA is based on prior tax-year income (see Medicare.gov), and the IRS provides guidance on Roth conversions and taxation (see IRS.gov/roth-iras).

How IRMAA is determined (high-level)

• The SSA uses tax information (MAGI) provided by the IRS to place beneficiaries into IRMAA brackets.
• MAGI for IRMAA is your adjusted gross income (AGI) plus tax‑exempt interest — not a separate “Medicare MAGI” definition.
• If your MAGI exceeds the threshold for your filing status in the lookback year, you pay higher Part B and Part D premiums for the applicable benefit year.

Because thresholds and surcharge amounts change annually, always check the current tables on Medicare.gov before executing a conversion strategy.

Typical timing consequences (illustrative example)

These are hypothetical examples to show the mechanics — check current IRMAA tables before making decisions.

• If you convert $100,000 in 2025 and your household otherwise has modest income that year, your 2025 tax return (filed in 2026) will be used by SSA to determine IRMAA for 2028. That could increase Part B/Part D premiums in 2028 and 2029.
• If instead you spread the $100,000 over four years ($25,000 per year), each year’s smaller bump to MAGI may keep you below an IRMAA threshold in the lookback year and avoid higher premiums.

In my practice, clients who stagger conversions often save more on Medicare premiums than the incremental tax cost of a slightly higher marginal bracket in a single year — but every case is unique.

Planning strategies to reduce IRMAA exposure

1. Project MAGI and IRMAA outcomes before converting

• Run a multi‑year projection of taxable income, including Social Security, RMDs, pensions and planned conversions. Use current IRMAA brackets as an input to spot problem years.

1. Stagger conversions (income smoothing)

• Spread conversions across multiple years to avoid a single large income spike. This is the most common, practical mitigation.

1. Convert in years when other income is low

• Target conversions in low‑income years (e.g., before Social Security begins, after a job ends, or a year with lower capital gains).

1. Coordinate with Social Security decisions

• Since Social Security benefits can raise MAGI, timing when you claim benefits relative to conversions matters. Sometimes delaying Social Security until after you’ve completed conversions can reduce IRMAA risk.

1. Use tax‑loss harvesting and timing deductions

• Offset conversion income with deductible expenses or capital losses in the same year when feasible. Keep in mind standard vs. itemized deduction implications.

1. Consider partial Roth conversions and recharacterization (where available)

• Recharacterizations were eliminated for Roth conversions made after 2017, so plan carefully; recharacterization is no longer an option. Instead, use partial conversions and pause if a conversion unexpectedly pushes you into IRMAA.

1. Explore charitable strategies

• If you are subject to Required Minimum Distributions (RMDs), Qualified Charitable Distributions (QCDs) can satisfy RMDs without increasing MAGI.

1. If IRMAA is triggered by a one‑time life event, appeal

• The SSA allows you to request reconsideration if your income has changed due to certain life‑changing events (marriage, divorce, death of a spouse, work reduction). Use Form SSA‑44 (https://www.ssa.gov/forms/ssa-44.pdf) to request an IRMAA reconsideration and provide supporting documentation.

Common implementation patterns and pitfalls

• Converting large sums in a single calendar year is the fastest way to trigger IRMAA. Many retirees underestimate the two‑year lag and how long higher premiums last.
• Forgetting future tax changes: law changes can shift RMDs, deduction limits and thresholds. Build flexibility into your plan.
• Counting on recharacterization: recharacterizations are no longer available for conversions, so you cannot unwind a Roth conversion simply because it created an IRMAA problem.
• Ignoring state taxes: Roth conversions may also create state income tax liability. Run federal and state projections.

Step‑by‑step checklist before a conversion

1. Assemble a two‑year and five‑year cash flow projection including all income sources.
2. Run a MAGI projection for each potential conversion year and map that to current IRMAA brackets.
3. Compare the incremental tax cost of converting now vs expected Medicare premium increases.
4. Decide on conversion amount and timing: full, partial, or laddered approach. (See our guide to the Roth Conversion Ladder for how to ladder conversions safely.)
5. Document assumptions and contingency triggers (for example: If MAGI in baseline year exceeds X, stop conversions).
6. If a life‑event reduces income, gather documentation and file Form SSA‑44 to request reconsideration.

Related internal resources: read our glossary entry on Roth conversions for conversion mechanics and tax rules (Roth Conversion). For laddering strategies that help spread income, see Roth Conversion Ladder. For how Part B premiums are structured, see Medicare Part B (Medical Insurance).

• Roth Conversion: https://finhelp.io/glossary/roth-conversion/
• Roth Conversion Ladder: https://finhelp.io/glossary/roth-conversion-ladder/
• Medicare Part B (Medical Insurance): https://finhelp.io/glossary/medicare-part-b-medical-insurance/

Example scenarios (illustrative)

Scenario A — Single filer, cautious approach

• Base income: $50,000 (pension + Social Security taxable portion)
• Conversion plan: $20,000 per year for five years
  Outcome: Each additional $20,000 keeps MAGI within a lower bracket and avoids IRMAA in most years; total tax paid may be similar or slightly higher than converting all at once because of marginal tax bracket effects, but the retiree avoids a two‑year Medicare premium surcharge.

Scenario B — Lump‑sum conversion

• Base income: $60,000
• One‑year conversion: $150,000
  Outcome: MAGI spikes and likely triggers IRMAA for two benefit years, offsetting some of the tax benefits of converting early.

These examples are simplified to illustrate tradeoffs. Use a tax‑aware retirement model to test your situation.

Appeals and life‑changing events

If your income drops substantially after the tax year used for IRMAA determination — for example, loss of a pension, death of a spouse, or reduction in work — you can appeal the IRMAA determination with SSA using Form SSA‑44 and submit documentation. Appeals are reviewed and, if granted, SSA will adjust IRMAA for the benefit year. See the SSA form and instructions here: https://www.ssa.gov/forms/ssa-44.pdf.

When converting still makes sense despite IRMAA

There are circumstances where paying a short‑term IRMAA premium is worth it:

• You expect tax rates (or your tax brackets) to rise in the future.
• You want to reduce future RMDs that would otherwise produce larger, recurring IRMAA hits.
• Estate and legacy planning objectives favor Roth assets (no future income tax for heirs on withdrawals).

In my experience, the decision turns on whether the present value of tax savings and estate benefits outweighs the present value of added Medicare premiums — run the numbers.

Actionable next steps

1. Pull recent tax returns and project MAGI for the next 3–5 years.
2. Use current IRMAA tables on Medicare.gov to identify vulnerable years.
3. Simulate staggered conversion paths and compute both tax and Medicare premium impacts.
4. Discuss the plan with a tax advisor or certified financial planner to test edge cases (state tax, unexpected income, market swings).

Final takeaways

• Roth conversions can be valuable, but they increase taxable income in the conversion year and can trigger IRMAA‑related Medicare premium surcharges two years later.
• Plan ahead, run projections, and use staggered conversions or low‑income years to minimize IRMAA exposure.
• If income changes due to a life event, file Form SSA‑44 to request reconsideration.

Disclaimer: This article is educational and does not constitute personalized tax, legal or financial advice. Consult your tax advisor, financial planner or the SSA/Medicare resources for guidance tailored to your specific circumstances. See Medicare.gov for IRMAA details and IRS guidance on Roth IRAs at https://www.irs.gov/retirement-plans/roth-iras.