Can a Roth Conversion Raise Your Medicare Premiums?

Yes, a Roth conversion can raise your Medicare premiums, and most people do not realize it until two years after the fact.

Key Takeaways

• Medicare calculates premium surcharges using your tax return from two years prior, not your current year's income.

• The surcharge mechanism is called IRMAA (Income-Related Monthly Adjustment Amount), and it applies once your modified adjusted gross income (MAGI) crosses specific thresholds.

• For married couples filing jointly in 2026, a Roth conversion that pushes MAGI past $218,000 triggers an immediate premium increase of more than $81 per person per month.

How Medicare Determines Your Premium

Most people assume Medicare premiums are fixed. They are not. Medicare uses a two-year lookback rule: your 2026 tax return determines your 2028 premiums. This delay is the reason Roth conversions create an unexpected Medicare problem so frequently. The income event happens in one year, and the financial consequence does not arrive until two years later.

The mechanism that raises premiums is IRMAA, short for Income-Related Monthly Adjustment Amount. IRMAA is Medicare's system for charging higher earners an additional surcharge on top of the standard Part B premium.

2026 Medicare Part B IRMAA Brackets (Married Filing Jointly)

MAGI Threshold (Married Filing Jointly): Up to $218,000, $218,001 to $274,000, $274,001 and above

Monthly Part B Premium (Per Person): $202.90, $284.10, $405.80

Monthly Increase vs. Standard: None, +$81.20 per person, +$202.90 per person

Source: Medicare.gov / Centers for Medicare and Medicaid Services (CMS), 2026 IRMAA Brackets.

Because each bracket applies per person, a married couple who crosses the $274,000 threshold could face more than $400 in additional combined monthly premiums. That is more than $4,800 per year in costs that were not part of the original conversion plan.

Why Roth Conversions Trigger IRMAA

A Roth conversion adds directly to your modified adjusted gross income for the year of conversion. MAGI is the exact figure Medicare uses to determine which IRMAA bracket applies two years later. The conversion amount does not receive any special treatment or carve-out. It counts the same as wages, pension income, or investment gains.

The question we need to answer before converting isn't just, 'What's my tax bracket?' It's, 'How close are we to the next IRMAA threshold?'" -- [Warren Burger, Luminary Financial Advisors]

This reframing matters because the income tax cost of a conversion and the Medicare premium cost of a conversion are two separate calculations. A household that is well within a favorable income tax bracket may still be close enough to an IRMAA cliff that a full conversion creates a disproportionate penalty.

Note: The examples presented here are hypothetical and intended for illustration purposes only. Individual results will vary based on specific circumstances.

How to Plan a Roth Conversion Around IRMAA

Avoiding an unplanned IRMAA surcharge does not always mean avoiding a Roth conversion. It means sizing the conversion deliberately.

1. Identify your current MAGI: Start with your most recent tax return and add back any income that could affect your MAGI this year, including projected investment income, required minimum distributions, and any other planned income events.

2. Map your distance to the next IRMAA bracket: Compare your projected MAGI against the 2026 IRMAA thresholds for your filing status. The gap between your projected income and the next bracket boundary defines the maximum conversion amount that avoids a surcharge.

3. Run the two-year projection: Because the lookback is two years, model what your income will look like in the year the premiums actually apply. A conversion done at age 63 affects premiums at 65, when Medicare enrollment typically begins.

4. Compare the long-term value: In some scenarios, the long-term benefit of tax-free Roth growth outweighs the near-term IRMAA cost. In others, a smaller, bracket-aware conversion delivers a better net result. A quantitative comparison of both paths determines which outcome applies to a specific household.

5. Account for both spouses: IRMAA brackets for married couples filing jointly are set at a combined MAGI level, but the premium surcharge is assessed per person. Both spouses' premiums increase when the household crosses a threshold, which effectively doubles the cost of breaching the bracket.