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Roth Conversions and IRMAA: Sizing Around the Cliffs

Last updated · Sources: CMS, SSA, BLS

Every dollar you convert from a traditional IRA to a Roth IRA is added to your AGI for that year, and therefore to your IRMAA MAGI. Because of the two-year lookback, a 2025 conversion affects 2027 premiums, and a 2026 conversion affects 2028 premiums.

IRMAA thresholds are cliffs

Crossing a threshold by $1 costs the full increase for the year. In 2026 terms, moving from no IRMAA to tier 1 adds $95.70 per month (Part B $81.20 + Part D $14.50), or $1,148.40 per person per year. Moving from tier 1 to tier 2 adds another $144.70/month ($1,736.40/year).

A simple sizing process

  1. Estimate your MAGI for the year before any conversion (wages, RMDs, taxable Social Security, dividends, gains, tax-exempt interest).
  2. Find the next threshold using the calculator: it shows exactly how much more income moves you up a tier.
  3. Leave a cushion — year-end dividends and capital-gain distributions often arrive in December.
  4. Decide whether to stop below the cliff, or deliberately go well past it if the tax savings justify the surcharge.

For 2026 conversions (2028 premiums)

2028 thresholds will be indexed by CPI-U through August 2027, and 2028 is also the first year the $500,000 / $750,000 top tier begins to be indexed. Until then, using the 2027 projected thresholds is a reasonable but conservative approximation.

Not tax advice. Conversions also affect income tax brackets, the taxation of Social Security, and other income-tested items.

Questions

Does a Roth conversion count for IRMAA?

Yes. The converted amount is taxable income, so it increases AGI and IRMAA MAGI in the conversion year, affecting premiums two years later.

Is it ever worth crossing an IRMAA threshold?

Sometimes. IRMAA is a one-year cost per threshold crossed, while tax savings from a conversion can last decades. Compare the extra annual surcharge with the long-term tax benefit.