Worked example · updated 2026-08-03

A Roth Conversion That Crossed an IRMAA Threshold

A hypothetical single retiree converts $6,000 from a traditional IRA in a year their other income is $104,000. The conversion is modest, the tax on it is manageable, and it carries their income a short way past an IRMAA edge. The Medicare bill for that arrives two Januarys later.

Illustrative worked example. The household is hypothetical; every figure is computed by the same verified engines and rule packs the calculators use.

The situation

A hypothetical single retiree, already on Medicare, expects income of $104,000 this year: a pension, some Social Security, and interest. Their advisor raises a Roth conversion, and they settle on $6,000 as an amount whose income tax they can absorb comfortably in this year's bracket. Nobody in the conversation mentions Medicare, because Medicare premiums are not usually part of a conversion conversation. The figures below are what the published bracket table does with that decision.

What goes in

Income before the conversion: $104,000
Amount converted: $6,000
Filing status: Single
People in the household on Medicare: One

What comes out

Added to their Medicare cost, two years later

$1,148

for one year, on a single conversion

Income for the year after converting: $110,000
Past the threshold bythe edge sits at $109,000: $1,000
What that overshoot costthe whole step, not a slice of it: $1,148
Conversion that would have stayed under the edgea fact about the table, not a recommendation: $5,000
Medicare surcharge per dollar convertedthe income tax on the conversion is separate, and larger: $0.19

Verified 2026-08-02 against CMS fact sheet, "2026 Medicare Parts A & B Premiums and Deductibles / 2026 Medicare Part D Income-Related Monthly Adjustment Amounts" (November 14, 2025); the same tables appear in CMS-8091-N, 90 FR 52063 (November 19, 2025) and on Form SSA-44 (12-2025) (effective 2026-01-01)

The conversion is small, and the tax on it is not the problem

Everything about the conversion looks proportionate. The amount is a fraction of the account, the income tax lands inside a bracket they were already in, and the money moves to an account that will never be taxed again. Judged as a tax decision in isolation — which is how conversions are usually judged — this is an unremarkable one. The difficulty is that a conversion is not only a tax decision. Every dollar converted is ordinary income in the year it moves, and ordinary income is the input to a second, slower system that nobody has raised.

Medicare is looking at this year, and will act on it in two years

Medicare sets each year's premium from the tax return filed two years earlier. That single design choice is why a conversion made now produces no visible consequence for two full Januarys, by which time the decision is closed, the conversation is forgotten, and the premium increase looks like it arrived from nowhere. It also means the reverse is true and more useful: while this year is still open, the income that will set that premium is still something the household can see and, within limits, still something it can change.

The surcharge is a cliff, so the last dollars carry the whole cost

Almost everyone assumes the income-related surcharge works like an income tax bracket, where only the amount above the line is charged at the higher rate. It does not. Crossing a threshold by any margin at all moves the entire premium into the next tier, on Part B and Part D both, for twelve months. That is why the figure worth looking at is not the total conversion but the distance past the edge. In this example the conversion carries them a short way past an edge, and the charge that triggers is larger than the overshoot itself, which is the whole shape of the problem.

What the household could have known, and what it could not

The room available before the next threshold is knowable today: it is arithmetic on a table CMS publishes. What is not knowable is the table that will actually govern the premium year, because CMS will not publish it for another two autumns. Since the thresholds are indexed to inflation, the real edges will sit a little higher than the current ones, so an estimate built on today's table understates the room rather than overstating it. Wrong in a stated direction is usable. It is also the only honest thing available.

Why Form SSA-44 does not undo this one

There is a route to having a surcharge reconsidered, and it does not reach this case. Social Security will use a more recent year's income after one of eight life-changing events: marriage, divorce, the death of a spouse, work stopping, work reducing, the loss of income-producing property, the loss of pension income, or an employer settlement. A conversion the household chose to make is not on that list and was never meant to be. The remedy exists for income that fell without being asked to, which is precisely the opposite situation.

What this example is good for

The cost of a conversion is not only the tax on it. There is a second bill, set by a table published years apart from the decision, and it arrives after the point at which anything can be done about it. Looking at the distance to the next threshold while the year is still open is the entire lever — and it costs nothing to look.

Run this with your own numbers — Roth Conversion → IRMAA

A Roth conversion counts as income, and Medicare sets your premium from the return you filed two years earlier. So a conversion made this autumn surfaces as a surcharge two Januarys later. Enter your income and the amount you are weighing to see which thresholds it crosses and what each step costs.

Calculators behind this example

Roth Conversion → IRMAA

IRMAA Calculator

IRMAA is the income-related surcharge added to your Medicare Part B and Part D premiums when the tax return you filed two years ago showed income above a threshold. Enter that income and your filing status to estimate your tier, the monthly and yearly surcharge, and exactly how many dollars sit between you and the next cliff.

SSA-44 Walkthrough

Form SSA-44 is how you ask Social Security to base your Medicare surcharge on this year's income instead of the two-year-old tax return that triggered it. Here are the eight life-changing events that qualify, the evidence Social Security accepts for each one, and how the form is filed. Filing it is free.

Estimate only — not financial, tax, legal, or insurance advice. Only CMS can determine your actual amounts.

Official source: CMS — 2026 Medicare Parts A & B premiums and deductibles ↗

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