How Roth Conversions Affect Medicare IRMAA
- Jul 13
- 7 min read
Updated: 5 days ago
By Kenneth M. Ford, AWMA®, AIF®
Last Updated: July 2026
Estimated Reading Time: 7–8 minutes
Quick Answer
A Roth conversion can increase your Medicare premiums if it raises your income enough to trigger the Income-Related Monthly Adjustment Amount (IRMAA). Because the converted amount is generally included in your taxable income for the year, a large conversion may result in higher Medicare Part B and Part D premiums.
The increase is often temporary. Medicare generally uses your modified adjusted gross income (MAGI) from two years earlier when determining premiums. In many situations, paying a higher Medicare premium for a limited period may still make sense if the Roth conversion helps reduce future Required Minimum Distributions (RMDs), improve tax flexibility, or lower lifetime taxes. The key is evaluating Medicare costs as one part of a comprehensive retirement income strategy—not as the only factor driving the decision.
Why This Matters
Many retirees understand that a Roth conversion creates taxable income. What often comes as a surprise is that the additional income can affect more than just their tax return.
A Roth conversion may also influence:
Medicare Part B premiums
Medicare Part D surcharges
The taxation of Social Security benefits
Future Required Minimum Distributions
Retirement income flexibility
The tax burden on a surviving spouse or heirs
This is why Roth conversion planning should never be viewed in isolation. A successful Roth conversion strategy considers today's taxes alongside future retirement income, Medicare costs, and long-term financial goals.
How Roth Conversion IRMAA Can Affect Medicare Premiums
IRMAA stands for Income-Related Monthly Adjustment Amount. It is an additional premium that higher-income Medicare beneficiaries may pay on top of their standard Medicare Part B and Part D premiums.
Medicare Part B
Medicare Part B generally covers outpatient medical care, physician services, preventive care, and many other healthcare expenses. Most beneficiaries pay the standard monthly premium, while higher-income retirees may pay more because of IRMAA.
Medicare Part D
Medicare Part D helps cover prescription drug costs. While premiums vary by plan, IRMAA may add an additional surcharge based on your income.
How Medicare Measures Income
For IRMAA purposes, Medicare generally looks at your Modified Adjusted Gross Income (MAGI), which is generally your adjusted gross income plus tax-exempt interest income.
The Two-Year Lookback
One of the most misunderstood parts of IRMAA is the timing.
Medicare generally determines your current premiums using your tax return from two years earlier. For example, your 2026 Medicare premiums are generally based on your 2024 tax return.
That means a Roth conversion completed today may not affect your Medicare premiums until two years from now.
Current IRMAA Thresholds
Under current law, higher Medicare premiums begin once income exceeds annual IRMAA thresholds. These thresholds are adjusted periodically, so it is important to use the most current figures when planning a Roth conversion.
How a Roth Conversion Can Affect Medicare Premiums
A Roth conversion generally increases taxable income during the year of the conversion.
If the additional income pushes your MAGI above an IRMAA threshold, Medicare may charge higher Part B and Part D premiums when that tax year is reviewed two years later.
Whether a Roth conversion actually affects your Medicare premiums depends on
several factors, including:
The amount converted
Your other sources of income
Your filing status
How close your income already is to an IRMAA threshold
Whether you are enrolled in Medicare
The important point is that the increase is often temporary. Once the higher-income tax year falls outside Medicare's two-year lookback period, your premiums generally adjust based on your more recent income.
Why Many Advisors Plan Around IRMAA
Thoughtful Roth conversion planning rarely focuses on a single year.
Instead, advisors often evaluate multiple years of retirement income to determine how much can reasonably be converted while balancing taxes, Medicare premiums, and future Required Minimum Distributions.
Partial Roth Conversions
Rather than converting a large IRA balance all at once, many retirees complete smaller Roth conversions over several years.
This approach may help manage taxable income while reducing the likelihood of crossing multiple IRMAA thresholds in a single year.
Multi-Year Planning
The years between retirement and the start of Required Minimum Distributions often create one of the best planning opportunities. Employment income has frequently ended, but mandatory withdrawals have not yet begun. For many retirees, this period provides greater control over taxable income before Social Security and Required Minimum Distributions fully shape their retirement tax picture.
Employment income has frequently ended, but mandatory withdrawals have not yet begun. This may allow retirees to recognize additional taxable income through Roth conversions while maintaining greater control over their tax bracket.
Looking Beyond One Year's Medicare Premium
Good planning looks beyond next year's Medicare bill.
Advisors often evaluate:
Current tax brackets
Available room before the next IRMAA threshold
Future RMD projections
Social Security timing
The tax implications for a surviving spouse
Sometimes remaining below an IRMAA threshold is appropriate. In other cases, intentionally crossing that threshold may still produce a better long-term outcome.
When Paying Higher Medicare Premiums May Still Make Sense
A temporary increase in Medicare premiums does not automatically make a Roth conversion a poor decision.
For some retirees, paying somewhat higher premiums for one or two years may help achieve much larger long-term benefits.
Potential benefits include:
Lower future Required Minimum Distributions
Reduced lifetime taxable income
Greater flexibility when taking retirement withdrawals
More tax-efficient assets for heirs
Improved planning opportunities for a surviving spouse
The objective is not simply to avoid IRMAA. It is to determine whether accepting a temporary Medicare surcharge may improve your overall retirement plan.
Advisor Insight
One of the most common mistakes we see is focusing so much on avoiding an IRMAA surcharge that the broader retirement strategy gets overlooked.
A temporary increase in Medicare premiums may be worthwhile if it helps reduce future Required Minimum Distributions, creates more tax-free retirement income, or improves flexibility later in retirement. The best Roth conversion strategies are typically evaluated over many years rather than based on a single tax return.
Example
David and Karen are both 66 and recently retired. They expect to receive Social Security benefits, pension income, and investment income, but they have not yet begun Required Minimum Distributions.
Before completing a Roth conversion, their projected MAGI is approximately $180,000.
They are considering converting $75,000 from a traditional IRA into a Roth IRA.
If they complete the full conversion, their income could rise above an IRMAA threshold, potentially increasing their Medicare premiums two years later.
Rather than automatically abandoning the strategy, their advisor models several alternatives:
Convert the full amount and accept a temporary Medicare increase.
Convert a smaller amount and remain below a target IRMAA threshold.
Spread the conversion over multiple years.
Because David and Karen also have approximately $1.4 million in traditional IRA assets, their advisor looks beyond the temporary Medicare surcharge. Instead of focusing on one year's premium, the advisor evaluates which conversion strategy is most likely to reduce future RMDs, improve tax flexibility, and produce the strongest long-term retirement outcome.
Common Mistakes
Avoiding Roth Conversions Solely Because of IRMAA
A temporary Medicare surcharge does not automatically mean a Roth conversion is the wrong decision.
Converting Too Much in One Year
Large one-time conversions can create unnecessary taxes and Medicare costs when a multi-year strategy may have been more effective.
Forgetting the Two-Year Lookback
Many retirees expect Medicare premiums to change immediately, when the impact often appears two years later.
Ignoring Future RMDs
Avoiding IRMAA today may result in significantly larger Required Minimum Distributions later.
Looking Only at One Year's Costs
The goal should be improving your lifetime retirement income strategy—not simply minimizing next year's Medicare premium.
Frequently Asked Questions
Does a Roth conversion increase Medicare premiums?
It can. If the conversion increases your MAGI above an IRMAA threshold, Medicare Part B and Part D premiums may increase.
How long does the Medicare increase last?
In many cases, the increase is temporary. Once the higher-income year is no longer part of Medicare's two-year lookback period, premiums generally adjust based on your newer tax returns.
Does Medicare use this year's income?
Generally no. Medicare typically uses your tax return from two years earlier.
Can IRMAA be appealed?
Certain life-changing events may qualify for an IRMAA appeal. A Roth conversion
itself is generally something to plan around rather than appeal.
Should I avoid Roth conversions after age 65?
Not necessarily. Many retirees continue evaluating Roth conversions after Medicare begins. The decision should consider taxes, Medicare, future RMDs, and overall retirement goals.
Is paying higher Medicare premiums ever worth it?
Yes. In some situations, paying higher premiums temporarily may still produce meaningful long-term tax savings and greater retirement flexibility.
How do advisors plan around IRMAA?
Many advisors project income before year-end, estimate MAGI, review tax brackets, compare IRMAA thresholds, and evaluate whether partial Roth conversions over several years may produce a better long-term outcome.
Key Takeaways
A Roth conversion can temporarily increase Medicare premiums through IRMAA.
Medicare generally uses income from two years earlier when determining premiums.
Partial Roth conversions may help manage taxes and Medicare costs.
A temporary IRMAA surcharge may still make sense if it improves long-term retirement outcomes.
Roth conversions should be evaluated within the context of your overall retirement income strategy.
Continue Learning
Continue building your Roth conversion knowledge with these related articles:
Final Thoughts
For many retirees, IRMAA is an important planning consideration—but it should not become the only factor driving a Roth conversion decision.
For some retirees, a temporary increase in Medicare premiums may be a reasonable trade-off if it helps reduce future Required Minimum Distributions, create greater tax flexibility, or improve your long-term retirement income plan. The goal is not simply to minimize next year's Medicare premium. It is to coordinate taxes, Medicare, Social Security, and retirement income in a way that supports your financial goals over decades, not just one tax year.
Disclaimer
This article is for educational purposes only and should not be considered tax, legal, or investment advice. Roth conversions, Medicare premiums, IRMAA surcharges, and retirement income strategies should be evaluated based on your individual circumstances, including your income sources, tax situation, retirement goals, and broader financial plan. Tax laws, Medicare rules, premium amounts, and IRMAA thresholds can change over time. Consult qualified tax and financial professionals before making financial decisions.