Will a Roth Conversion Spike My Medicare (IRMAA) Premiums? What Higher-Income Retirees Need to Know Before Converting

You are 63, still working, and you have finally decided to start moving some of that large traditional IRA into a Roth before you retire. The logic is sound: convert while you can still control the timing, pay the tax now, and shrink the balance that will otherwise turn into oversized required distributions later. Then a friend at dinner says something about Medicare premiums going up because of a conversion, and you realize you have never heard of the thing they are describing. That thing is IRMAA, and the link between a Roth conversion and IRMAA is exactly the part most people find out about two years too late.

So let me answer the question you came here with directly, and then walk through the mechanics that decide how much it costs you.

Does IRMAA even apply to me?

If your income is high enough to make large Roth conversions attractive, then yes — IRMAA is built for exactly you. It only touches higher-income people. Roughly 8% of Medicare beneficiaries pay it. Everyone else pays the standard premium and never thinks about it.

IRMAA stands for Income-Related Monthly Adjustment Amount. It is a surcharge added on top of the standard Medicare Part B and Part D premiums once your income crosses a threshold. For 2026, that first threshold is $109,000 of modified adjusted gross income for a single filer and $218,000 for a married couple filing jointly. Below the line, no surcharge. Above it, you pay more — and a Roth conversion is one of the cleanest ways to push yourself above it without meaning to. The statute behind it is the Social Security Act, codified at 42 U.S.C. § 1395r(i) for Part B and 42 U.S.C. § 1395w-113(a)(7) for Part D.

Your instinct that high earners “should know” about this is half right. They know their income is high. What they usually do not know is that this specific surcharge exists, that a one-time conversion feeds it, and that the bill shows up two years after the conversion. That delay is what turns a reasonable plan into a surprise.

How does a Roth conversion trigger IRMAA?

A Roth conversion is ordinary income in the year you do it. When you move money from a traditional IRA to a Roth, the converted amount is treated as a taxable distribution and lands in your gross income under IRC § 408A(d)(3). It flows straight onto line 11 of your Form 1040 as part of your adjusted gross income, and you report it on Form 8606.

IRMAA is measured off a modified adjusted gross income figure that starts with that same AGI. For IRMAA purposes, MAGI is your AGI plus any tax-exempt interest — the municipal bond interest on line 2a that you think of as “tax-free.” That is the whole definition. Note one thing that trips people up: unlike the MAGI used for ACA marketplace subsidies, the IRMAA version does not add back the untaxed portion of your Social Security. But it does count every dollar you convert, because the conversion is already sitting in your AGI. Convert $80,000 and your IRMAA income goes up by $80,000.

Why does my conversion at 63 set my premium at 65?

Because Medicare looks back two years. The premium you pay in a given year is based on the tax return from two years earlier. Your 2026 premiums are set by your 2024 return; your 2028 premiums will be set by your 2026 return. The rule is in the regulations at 20 CFR § 418.1135.

For someone converting in the runway to Medicare, this is the trap. A conversion you do this year, at 63, does not hit your premiums this year. It hits them when you are 65 — the very first year you enroll and start paying Part B. People convert aggressively at 63 and 64 precisely because their work income is winding down and the bracket looks open, not realizing they are setting the Medicare premium for the year they actually sign up. Then the enrollment letter arrives with a surcharge attached, and they have no idea where it came from.

The flip side is the genuine opportunity here: conversions you do before age 63 generally fall outside the two-year window that touches your first Medicare premiums. The years before that lookback begins are often the best conversion years you will ever get.

Why does $1 over a threshold matter so much?

Because IRMAA is a cliff, not a slope. Your income tax brackets are marginal — cross into the 24% bracket and only the dollars above the line are taxed at 24%. IRMAA does not work that way. Cross a threshold by a single dollar and your entire premium jumps to the next tier for the whole year. There is no easing in.

Here are the 2026 numbers, straight from the CMS release. The standard Part B premium is $202.90 per month. Each tier above it adds a fixed Part B surcharge and a separate Part D surcharge, and the income shown is your MAGI from two years prior.

2024 MAGI — Single	2024 MAGI — Married Filing Jointly	Total Part B / month	Part D surcharge / month
≤ $109,000	≤ $218,000	$202.90	$0.00
$109,001 – $137,000	$218,001 – $274,000	$284.10	$14.50
$137,001 – $171,000	$274,001 – $342,000	$405.80	$37.50
$171,001 – $205,000	$342,001 – $410,000	$527.50	$60.40
$205,001 – $499,999	$410,001 – $749,999	$649.20	$83.30
≥ $500,000	≥ $750,000	$689.90	$91.00

Put real numbers on the first cliff. A single filer whose 2024 MAGI was $108,900 pays the standard premium. Convert enough to land at $109,001 and the Part B premium climbs by $81.20 a month and Part D adds $14.50 — about $95.70 a month, or roughly $1,148 for the year, for going one hundred dollars over. For a married couple where both spouses are on Medicare, the surcharge applies to each of them, so crossing the $218,000 line costs the household closer to $2,297 for the year. That is the “hidden tax” on a conversion that nudged you across a line you could not see.

Use the calculator below to see which tier your conversion lands you in, and what the jump would cost.

Can I just appeal it?

Usually not for a conversion. Social Security does let you ask for a reduction when a “life-changing event” has dropped your income, using Form SSA-44. The regulations at 20 CFR § 418.1201 list the qualifying events, and there are eight of them: marriage, divorce or annulment, death of a spouse, work stoppage, work reduction, loss of income-producing property, loss of pension income, and an employer settlement payment.

Notice what is not on that list. A Roth conversion is not a life-changing event. It is a voluntary choice, so you cannot file an SSA-44 to undo the surcharge it caused. This matters in the very common case where someone retires and converts in the same year. The retirement itself is a work-stoppage event you can appeal — but when Social Security recalculates your premium on your new, lower expected income, the conversion dollars still have to be included in that estimate. You can appeal away the high salary you no longer earn. You cannot appeal away the conversion.

So should I stop converting?

No — and this is where the “will it spike my premiums” question needs a cooler head. IRMAA is a one-year surcharge, not a permanent penalty. It is recalculated every year off the return from two years prior. If your income spikes in one year and drops back the next, the surcharge rides up for a single year and then falls away. You are not branded for life.

That changes the math. The real question is not “does this conversion trigger IRMAA” but “is the one-year surcharge smaller than what I save.” If converting now shrinks a traditional balance that would otherwise drive much larger required minimum distributions — and even higher IRMAA tiers — every year of your 70s and 80s, paying one year of surcharge to defuse a decade of them can be a clear win. A small conversion done purely to nudge under an RMD, like the couple converting $15,000 who accidentally clear the first cliff, is the kind that usually is not worth it. A deliberate multi-year conversion plan that fills a tier on purpose often is.

The point is to convert with the surcharge priced in, not to let it ambush you. That is the same trade-off we work through when deciding whether to convert at all in Roth vs. Traditional IRA, and it is a cousin of the threshold problem early retirees face with the ACA subsidy cliff — same idea, different means-tested line.

One more cost worth naming: a conversion does not just risk IRMAA. By lifting your MAGI it can also drag other investment income across the line for the 3.8% net investment income tax (IRC § 1411). The conversion itself is not net investment income — it is specifically excluded under IRC § 1411(c)(5) — but the higher MAGI it creates can expose your dividends and capital gains to that surtax. It belongs in the “all-in cost” column alongside the income tax and the IRMAA surcharge.

Next steps

The mechanics are simple to state and expensive to get wrong: a Roth conversion is ordinary income, it counts toward the MAGI that sets your Medicare premiums, IRMAA is a cliff where one dollar over a threshold moves your whole premium up, and the bill arrives two years after you convert. You cannot appeal it, but you also are not stuck with it forever — it resets each year. The job is to size each year’s conversion against the brackets on purpose.

If you want someone to build the actual numbers — which tier you are in, how much room you have before the next cliff, and whether the one-year surcharge is worth what the conversion saves you in RMDs and future premiums — book a meeting with our office here. This is part of the broader work we do on Roth conversion and backdoor Roth tax planning, and it is a lot cheaper to model a conversion than to swallow a surcharge you never saw coming.

Disclaimer: This article is for educational purposes only and does not constitute investment, tax, or financial advice. Medicare and tax rules are fact-specific and change annually. Always consult a qualified professional about your specific situation.