How does a Roth conversion affect my Medicare IRMAA premium?

A Roth conversion increases your Modified Adjusted Gross Income (MAGI) in the year you convert, which can trigger higher Medicare Part B and Part D premiums through the Income-Related Monthly Adjustment Amount (IRMAA). This is one of the most overlooked costs of Roth conversions.

How IRMAA works: Medicare uses your tax return from two years prior to determine your premiums. So a Roth conversion in 2024 would affect your Medicare premiums in 2026. For 2024, the standard Part B premium is $174.70/month, but IRMAA surcharges can push it as high as $594.00/month for the highest income bracket.

The IRMAA income thresholds for 2024 (based on 2022 MAGI):

• Single filers: Surcharges begin at $103,000 MAGI
• Married filing jointly: Surcharges begin at $206,000 MAGI
• Each bracket increases premiums by roughly $70–$420/month per person

Strategic considerations:

• Convert before age 63: Since IRMAA uses a 2-year lookback, conversions done before Medicare enrollment (age 65) avoid IRMAA entirely if you convert at 63 or earlier.
• Stay below bracket thresholds: If a $50,000 conversion pushes you from $200,000 to $250,000 MAGI (married), you'll jump an IRMAA bracket. Consider converting $44,000 instead to stay under the threshold.
• Life-changing event exception: If you experienced a qualifying life event (retirement, divorce, death of spouse), you can file Form SSA-44 to request that Social Security use a more recent year's income instead.

The long-term tax savings from a Roth conversion often outweigh the temporary IRMAA increase, but you need to model the numbers carefully.