Medicare

Medicare, IRMAA, and Roth Conversion Timing

The short answer

Higher-income retirees pay a Medicare surcharge called IRMAA, based on their tax return from two years earlier. That lookback is why a large Roth conversion can raise your Medicare premiums later — and why timing matters.

How the two-year lookback works

Your Medicare Part B and Part D premiums for a given year are generally based on your income from two years prior. So income you create at 63 — for example, from a Roth conversion — can affect your Medicare premiums at 65.

Why timing is everything

This doesn’t mean conversions are bad. It means the timing and size of a conversion should account for Medicare, not just income taxes. Sometimes converting earlier — before Medicare — is preferable; sometimes smaller conversions spread over years work better.

Related: Use the Roth Conversion Tool and see official details at medicare.gov. Confirm with a qualified tax professional.

Have questions about your own situation? Tracy is glad to talk it through with you — clearly and without pressure.

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Not tax advice. Educational only. Not affiliated with or endorsed by Medicare. Consult a qualified tax professional before deciding. Services offered only where Tracy is properly licensed.