IRMAA Tiers and Roth Conversions: The Medicare Surcharge Trap
If you’re new to Roth conversions generally, start with Roth Conversions: The Complete Guide. This piece assumes you understand the basic mechanic and focuses specifically on the IRMAA interaction — one of the two biggest traps that derail conversion plans for people approaching Medicare.
What IRMAA actually is
IRMAA — Income-Related Monthly Adjustment Amount — is a surcharge added to your Medicare Part B and Part D premiums when your income exceeds certain thresholds. The Social Security Administration determines who pays IRMAA based on the income reported on your tax return from two years prior.
The standard Part B premium for 2026 is $202.90 per month. If IRMAA applies, that number goes up — in some cases to $689.90 per month, nearly three and a half times the base rate. Part D premiums are layered on top with their own surcharge scale.
The feature that makes IRMAA dangerous for conversion planning isn’t the surcharge amount. It’s the structure: IRMAA is a cliff, not a phase-in. If your MAGI is $217,999 as a married couple, you pay nothing extra. At $218,001, both spouses (if both are on Medicare) pay the full first-tier surcharge. One dollar of additional income triggers the full step.
This cliff structure is what distinguishes IRMAA from ordinary tax-bracket math. In the federal income tax system, pushing past a bracket threshold only affects the income above the threshold. With IRMAA, the entire surcharge applies retroactively to all 12 months of premium billing for the affected year.
The two-year lookback
Every year, the SSA looks at your most recently filed tax return and uses that MAGI to determine your current-year Medicare premiums. Because tax returns for a given year aren’t filed until the following April, there’s a built-in lag:
- 2026 Medicare premiums are based on 2024 MAGI (the most recent return filed by late 2025)
- 2027 Medicare premiums are based on 2025 MAGI
- 2028 Medicare premiums are based on 2026 MAGI
For conversion planning, this lookback cuts two ways. It’s a constraint — a conversion you do today affects premiums you’ll pay two years from now. It’s also a planning tool — if you know you’ll have a low-income year coming up, you can project exactly which future year benefits.
The practical implication: if you’re planning Medicare enrollment for 2028 (turning 65 that year), the conversion you execute in 2026 sets your first-year Medicare premium. A careless conversion in your last pre-Medicare year can saddle you with surcharges for your entire first Medicare year.
The 2026 IRMAA brackets
Here are the 2026 Medicare IRMAA tiers, based on 2024 MAGI for married filing jointly and single filers:
| 2024 MAGI (MFJ) | 2024 MAGI (Single) | Monthly Surcharge Per Person (B+D) | Annual Cost Per Couple |
|---|---|---|---|
| ≤ $218,000 | ≤ $109,000 | $0 | $0 |
| $218,001–$274,000 | $109,001–$137,000 | $95.70 | $2,297 |
| $274,001–$342,000 | $137,001–$171,000 | $240.40 | $5,770 |
| $342,001–$410,000 | $171,001–$205,000 | $385.00 | $9,240 |
| $410,001–$749,999 | $205,001–$499,999 | $529.60 | $12,710 |
| ≥ $750,000 | ≥ $500,000 | $578.00 | $13,872 |
A few features worth noting. The per-person surcharge applies to both spouses when both are on Medicare — the per-couple cost is double the per-person figure. The first four tiers are indexed for inflation annually; the highest tier is currently frozen and won’t be adjusted for inflation until 2028. And the thresholds for single filers are exactly half the MFJ thresholds — there’s no joint-filing benefit on IRMAA, which makes the surcharge particularly painful for higher-income couples.
How conversions interact with IRMAA
The connection is simple: conversion income counts toward MAGI for IRMAA purposes. When you convert $100,000 from a traditional IRA to a Roth, that $100,000 gets added to your AGI. The IRMAA calculation uses AGI plus tax-exempt interest (municipal bond income, tax-exempt dividends, certain U.S. savings bond interest used for education). A conversion that on its face stays within the federal 22% or 24% bracket can still cross an IRMAA threshold, because IRMAA uses gross MAGI rather than taxable income.
A concrete example. A married couple in 2026, both 63, pre-Medicare. Their non-conversion income:
- Pension: $40,000
- Qualified dividends: $20,000
- Tax-exempt municipal bond interest: $5,000
- Total MAGI before conversion: $65,000
They’re well under the first IRMAA threshold and have substantial headroom. The math on how much they can convert without crossing the tier 1 cliff ($218,000 MFJ):
$218,000 − $65,000 = $153,000 of conversion room before hitting tier 1.
A $150,000 conversion keeps them $3,000 under the threshold. Premium impact for 2028: zero IRMAA.
A $160,000 conversion (the kind of number a planner might recommend just to “fill the 24% bracket”) pushes them to $225,000 MAGI — $7,000 over the threshold. Premium impact for 2028: $2,297 in IRMAA surcharges when they start Medicare, just for being $7,000 over a line.
The cost-benefit math:
- Extra conversion amount: $10,000
- Federal tax on the extra $10,000 at 24%: $2,400
- IRMAA cost: $2,297
They paid $2,400 in tax plus $2,297 in IRMAA to convert an extra $10,000. The blended marginal cost on those last dollars is 47% — essentially double what the stated federal bracket suggested.
Meanwhile, the first $150,000 of the conversion cost them about $27,000 in federal tax at blended rates. No IRMAA impact. Marginal cost: 18%.
The last $10,000 was nearly three times more expensive than the first $150,000, strictly because of the cliff.
The pre-Medicare planning windows
When IRMAA matters depends on your age and Medicare enrollment timeline:
Before age 63: IRMAA has no effect on your current or near-term planning. A conversion you do at 60 affects your 2-year-old tax return when you eventually enroll in Medicare at 65, but only if you’re looking at the wrong lookback year. Conversions executed in your late 50s and early 60s are generally free of IRMAA constraints. This is the aggressive conversion window.
At age 63: This is the critical inflection year. Conversions done in 2026 at age 63 affect 2028 Medicare premiums — your first year of Medicare eligibility. If you haven’t planned carefully, you can start your Medicare life at a higher premium tier and pay that surcharge for the full year before any correction.
At age 64: Conversions affect your second year of Medicare premiums. You’re already enrolled and experiencing the baseline costs, but a large conversion still creates a future surcharge year.
Age 65 and beyond: Every conversion affects premiums exactly two years later. This is when IRMAA becomes an ongoing annual consideration rather than a one-time concern.
The practical consequence: the “aggressive conversion” strategy used by FIRE practitioners in their 50s needs to downshift at 63. Between 63 and 65, conversions should be sized with an IRMAA tier forecast two years forward, not just a federal bracket fit.
Avoiding the cliff
The cleanest strategy is simple: run your projected MAGI calculation with IRMAA thresholds in mind, then size the conversion to stay just below the relevant tier.
Some tactical additions that can help:
Spread conversions over multiple years. A $300,000 conversion in one year creates a massive MAGI spike and likely pushes you several tiers up. The same $300,000 spread over three years of $100,000 each may keep you entirely out of IRMAA territory. The spread also tends to give you better federal bracket positioning.
Time around Medicare enrollment. If you’re turning 65 in 2027, the conversion that matters for your first Medicare year is 2025’s. By 2026 (age 64), the 2028 premium year is already locked in — focus on 2026 conversions for the 2029 Medicare year instead.
Keep tax-exempt interest modest. Because IRMAA MAGI adds back tax-exempt interest, loading up on munis for their federal tax advantage can push you across an IRMAA line. For retirees near the threshold, taxable interest in a ladder of short-duration Treasuries may produce less IRMAA exposure than tax-exempt munis with the same after-tax yield.
Use QCDs after 70½. Qualified Charitable Distributions direct from your IRA to a charity don’t count toward AGI. If you have charitable intent and you’re past 70½, a QCD reduces both your RMD-driven income and your IRMAA exposure simultaneously.
Accept the tier if the math justifies it. Not every IRMAA surcharge is a mistake. A couple converting $500,000 over two years at an average 22% rate, intentionally accepting one year of tier-1 surcharges, may still come out well ahead of the alternative of waiting and paying 32% on forced RMDs. IRMAA is a cost to model, not a rule to never violate.
The appeal mechanism
IRMAA has a specific appeal process for qualifying life-changing events. The form is SSA-44 — Medicare Income-Related Monthly Adjustment Amount Life-Changing Event Request — and the qualifying events are:
- Marriage
- Divorce or annulment
- Death of a spouse
- Work reduction or stoppage
- Loss of income-producing property
- Loss or reduction of certain pension income
- Employer settlement payment
Retirement itself qualifies. If you retired in 2024 but your 2024 tax return reflects a full year of employment income, your 2026 premiums are calculated on income you no longer earn. Filing SSA-44 with 2025 or 2026 income documentation lets the SSA use current income instead of the two-year-old tax return. This is one of the most underutilized IRMAA planning tools.
A Roth conversion does not qualify as a life-changing event. Voluntary income increases don’t give you appeal grounds. This is by design — the SSA’s position is that if you chose to recognize more income, you should pay the resulting surcharge.
The appeal isn’t automatic. You have to file the form, document the qualifying event, and wait for approval. But the approval rate for legitimate life-changing events is high, and it can eliminate one or two full years of IRMAA surcharges for retirees whose lookback year included significant W-2 income that no longer applies.
Try Scala
Model conversions with IRMAA thresholds built in
Scala tracks IRMAA tier proximity as it models each year of your conversion plan. When a conversion would push MAGI across a threshold, Scala flags the tier change, shows the cost of the surcharge in dollar terms, and suggests the revised conversion amount that stays just under the cliff. Pro tier includes per-year tier forecasting across the full planning horizon.
Open Scala →Frequently asked questions
Does the IRMAA two-year lookback mean I should stop converting at age 63?
Not necessarily — it means conversions at 63 and later need to be sized with IRMAA tiers in mind, not just federal brackets. If a conversion fits within the pre-tier MAGI room, it works the same as a conversion at 53. The change is that your margin for error shrinks and the cost of overshooting a tier is no longer just federal tax.
If my income is high one year and low the next, do I pay IRMAA both years?
You pay IRMAA based on the lookback year that determines each premium year. A high-income year creates high premiums for the premium year it affects — two years later — and then drops back. It's a single-year surcharge, not a running penalty, but it's a single year of elevated costs you can't reverse once that tax year's return is filed.
Can my spouse and I each have different IRMAA tiers?
If you file jointly, you're both in the same tier based on the joint MAGI. If you file separately, you're each in a tier based on your individual return, but married-filing-separately thresholds are much narrower — usually making MFS a worse option for IRMAA purposes than MFJ. The MFS thresholds start at just $109,001.
Does Social Security income count toward IRMAA MAGI?
The taxable portion of Social Security is included in AGI, which is part of IRMAA MAGI. For most retirees with meaningful retirement income, up to 85% of Social Security ends up taxable and therefore counted. This is one of the ways conversions create cascading effects — a conversion that pushes provisional income higher also makes more of your Social Security taxable, which further increases MAGI.
What exactly counts as MAGI for IRMAA purposes?
IRMAA MAGI equals your AGI (Form 1040, Line 11) plus tax-exempt interest (Form 1040, Line 2a). Tax-exempt interest includes municipal bond income, tax-exempt dividends, and U.S. Savings Bond interest used for qualified higher education expenses. The tax-exempt interest add-back often surprises people because they assume 'tax-exempt' means 'doesn't count' — for IRMAA, it does.
Is the IRMAA surcharge tax-deductible?
No. IRMAA is a Medicare premium, not a tax, and Medicare premiums in general are deductible only as itemized medical expenses above 7.5% of AGI — a threshold most retirees don't reach. Even for people who do itemize medical expenses, the IRMAA portion is typically not separately valuable relative to the base Part B and D premiums.
Can I file SSA-44 to appeal a high-income year caused by Roth conversions?
No. Roth conversions don't qualify as a life-changing event under SSA's rules. The qualifying events are marriage, divorce, death of spouse, work reduction, loss of income-producing property, pension loss, and employer settlements. Voluntary income recognition isn't on the list.
How do I actually know what my MAGI will be before year-end?
You estimate. Project your AGI based on realized income through the current year plus expected income through year-end, add your tax-exempt interest, and add any planned conversions. Most conversion planning uses a tax projection spreadsheet or a tool that tracks MAGI in real time. Scala is built for this use case — it projects MAGI per year as you model conversion scenarios.
What if I convert right before Medicare enrollment and then the surcharge hits in year one?
That's the most common IRMAA mistake for Roth conversion planning. The surcharge applies to the full Medicare year affected by the lookback. If you enroll in Medicare on January 1 of the affected year, you pay the higher premium for all 12 months. There's no partial-year proration for being newly enrolled.
Do Roth conversions I do after age 65 still affect future premiums?
Yes. Every year's MAGI determines premiums two years later, regardless of age. A conversion at 70 affects premiums at 72; a conversion at 80 affects premiums at 82. There's no point where IRMAA stops applying during your lifetime on Medicare.
Sources
Chris Gammill is the founder of Ignis Tools and writes about tax-aware retirement planning. Research and drafting assisted by AI tools; all figures and claims verified by the author against primary sources.
- Centers for Medicare & Medicaid Services — 2026 Medicare Parts A & B Premiums and Deductibles — retrieved 2026-04-20
- Kiplinger — 2026 IRMAA brackets and surcharges for Parts B and D — retrieved 2026-04-20
- Social Security Administration — Form SSA-44, Life-Changing Event Request — retrieved 2026-04-20
- IRS Revenue Procedure 2025-32 — 2026 inflation adjustments — retrieved 2026-04-20