How a Roth Conversion Affects Your Social Security Tax and Medicare Premium

One of our advisors sat down with a couple last year who had done everything right. They'd maxed out their 401(k)s for decades. They'd retired at 64. They had about $2 million in traditional IRAs and a solid plan to start Social Security at 67.

Their CPA suggested a Roth conversion of $150,000 to get money into a tax-free account before required distributions kicked in. Smart move. They paid the income tax and felt good about it.

Then, two years later, they opened their Medicare premium notice. Their Part B premium had jumped from $202.90 per person to $405.80 per person. That's an extra $4,869.60 for the year, between the two of them, in Medicare surcharges alone.

"Nobody told us this would happen," the wife said. "We thought we were being smart."

They were being smart. They just didn't see the full picture. And that's the part most people miss: a Roth conversion doesn't just affect your tax bill this year. It can also change how much of your Social Security gets taxed and what you'll pay for Medicare premiums two years down the road.

Three Dominoes, One Decision

When you convert traditional IRA dollars to a Roth, the IRS treats the converted amount as ordinary income for that year. That single event sets off a chain reaction across three different parts of your financial life. Understanding all three is the difference between a strategic Roth conversion and an expensive surprise.

Here's how the dominoes fall.

Domino 1: Your Current-Year Tax Bill

This is the one everybody knows about. Convert $100,000 from a traditional IRA to a Roth, and you've added $100,000 to your taxable income for the year. If you're in the 22% bracket, that's roughly $22,000 in federal income tax on the conversion. The whole point is that you're paying tax now, at today's rate, so the money grows and comes out tax-free later.

But that's not the whole story.

Domino 2: Social Security Becomes More Taxable

If you're already collecting Social Security, a Roth conversion can push more of your benefit into the taxable zone. The IRS uses a formula called "provisional income" to decide how much of your Social Security gets taxed. It works like this:

Provisional income = Adjusted Gross Income + tax-exempt interest + half of your Social Security benefit

Here's the key: a Roth conversion counts as income for this calculation. So does Roth conversion count as income for Social Security taxation? Yes. The converted amount flows into your AGI, which flows directly into provisional income.

For married couples filing jointly, if provisional income exceeds $32,000, up to 50% of Social Security becomes taxable. Above $44,000, up to 85% becomes taxable. Those thresholds haven't been adjusted since 1993, which means most retirees with any meaningful income are already above them.

A large Roth conversion can push you from 50% taxable all the way to 85%. On a $30,000 annual Social Security benefit, that's roughly $10,500 more in taxable income, all because of the conversion. The full formula is in IRS Publication 915.

Now here's where it gets interesting.

Domino 3: IRMAA Hits Your Medicare Premium Two Years Later

IRMAA (Income-Related Monthly Adjustment Amount) is Medicare's surcharge for higher-income beneficiaries. If your modified adjusted gross income crosses certain thresholds, you pay more for Part B and Part D. The catch? It's based on a two-year look-back. Your 2024 income determines your 2026 Medicare premiums.

So does a Roth conversion affect IRMAA? Absolutely. The converted amount adds to your MAGI, and if that pushes you over an IRMAA threshold, you'll pay higher Medicare premiums starting two years later.

For 2026, the standard Part B premium is $202.90 per month. But if your 2024 MAGI crossed $218,000 as a married couple (or $109,000 as a single filer), you're in the first IRMAA tier at $284.10 per month. Cross $274,000 jointly and it jumps to $405.80. The surcharges go all the way up to $689.90 per month at the highest tier.

Here are the 2026 IRMAA brackets for married couples filing jointly:

Source: CMS.gov 2026 Medicare Parts A & B Premiums and Deductibles

For the couple in our example, their $150,000 Roth conversion pushed their joint income from $200,000 to $350,000. That landed them in the third IRMAA tier at $527.50 per person per month, more than double the standard premium. And they didn't find out until two years after the conversion.

Think about that for a minute.

What the Advisor Actually Did

When this couple came back to our office, the advisor didn't just explain why the surcharges happened. He pulled up their full income picture and showed them what a better approach would look like going forward.

Instead of one large $150,000 conversion, the advisor mapped out a multi-year Roth conversion strategy sized to stay below the IRMAA thresholds. Here's the approach:

1. Know your IRMAA ceiling. For a married couple, the first IRMAA tier starts at $218,000 in MAGI. If your base income (pensions, Social Security, investment income) totals $150,000, you have roughly $68,000 of room before you'd trigger any surcharge. That's your maximum conversion amount for that year if you want to avoid IRMAA entirely.
2. Factor in provisional income. If you're collecting Social Security, run the provisional income calculation too. You might already be at 85% taxable, in which case the conversion won't make Social Security worse. But if you're near the 50%/85% boundary, a smaller conversion might keep you on the lower side.
3. Spread it across years. Converting $50,000 per year for three years keeps you below IRMAA thresholds the entire time. You end up with the same $150,000 in a Roth, but without a single dollar in Medicare surcharges. The tax cost is similar. The IRMAA cost drops to zero.
4. Time it before Social Security and RMDs. The best conversion window is often between retirement and age 67 (or whenever you start Social Security). Your income is lower, your tax bracket is lower, and you have more room under the IRMAA ceiling. Once Social Security starts and RMDs kick in at 73, the math gets tighter every year.

One of our advisors has a phrase he uses with clients: "Two years from the time you pull that money out, the Pied Piper comes to collect their due." That two-year lag is what makes IRMAA planning so tricky. You have to think about what your income looks like today and what it's going to cost you 24 months from now.

The Sweet Spot: How to Size a Roth Conversion

For Roth conversion IRMAA planning, the process our advisors use comes down to three numbers:

1. Your projected MAGI without the conversion. Start with your expected income for the year: pension, Social Security, investment gains, rental income, any part-time work.
2. The IRMAA threshold you want to stay under. For most couples, the goal is to stay at or below $218,000 (joint). For single filers, $109,000.
3. The gap between the two. That gap is your "conversion budget" for the year. Convert up to that amount and you'll stay in the standard Medicare premium tier.

Some clients decide that tripping into the first IRMAA tier ($284.10/month, an extra $81.20 over the standard premium) is worth it if the conversion saves them significantly more in future taxes. That's a legitimate trade-off. The key is making the decision with eyes open, not finding out when the premium notice arrives.

If you have a life-changing event (like retiring or losing a spouse), you can appeal your IRMAA determination using SSA Form SSA-44 (search for "SSA-44 Life-Changing Event" on SSA.gov). But a planned Roth conversion doesn't qualify as a life-changing event, so there's no appeal if the surcharge was triggered by a conversion you chose to make.

What To Do Before Your Next Roth Conversion

1. Pull your last two years of tax returns. Look at your MAGI. That's the number Medicare will use. Your 2024 return determines your 2026 premiums. Your 2025 return determines 2027.
2. Calculate your IRMAA headroom. How much room do you have between your base income and the first IRMAA threshold? That's your conversion budget.
3. Run the provisional income math. If you're collecting Social Security, check whether the conversion would push more of your benefit into the taxable zone. Your advisor or CPA can model this in about ten minutes.
4. Model multiple years. Don't just look at this year. Map out conversions across three to five years. The goal is to get money into the Roth at the lowest total cost (tax plus IRMAA plus Social Security impact).
5. Coordinate with your tax advisor. Roth conversions, income planning, and Medicare costs aren't three separate things in retirement. They're one thing. Your financial advisor and CPA need to be looking at the same numbers.

We cover the full IRMAA bracket tables, planning strategies, and appeal process in our IRMAA Trap guide, which is worth bookmarking if you're doing any kind of income planning in retirement.

At American Retirement Advisors, this is exactly the kind of planning we do with clients every day. We look at Roth conversions, Social Security timing, IRMAA brackets, and tax brackets together, because they're all connected. If you're thinking about a Roth conversion (or you've already done one and want to make sure the next one is sized right), give us a call. No pressure, no pitch. Just a conversation about how to avoid the surprises and keep more of what you've built.

Frequently Asked Questions

Does a Roth conversion affect IRMAA?

Yes. A Roth conversion adds to your modified adjusted gross income (MAGI) for the year you convert. If that pushes your MAGI above the IRMAA threshold ($109,000 single or $218,000 married filing jointly for 2026), you'll pay higher Medicare Part B and Part D premiums starting two years later. Your 2024 conversion affects your 2026 premiums.

Does a Roth conversion count as income for Social Security?

A Roth conversion does not count as earned income for Social Security benefit calculations. However, the converted amount does increase your adjusted gross income, which flows into the "provisional income" formula that determines how much of your Social Security benefit is taxable. A large conversion can push up to 85% of your benefit into taxable territory.

How does a Roth conversion affect Medicare premiums?

Medicare uses a two-year look-back to determine IRMAA surcharges. A Roth conversion increases your MAGI in the conversion year. If your MAGI exceeds the IRMAA thresholds, you'll pay higher Part B premiums (ranging from $284.10 to $689.90/month for 2026, compared to the standard $202.90) and Part D surcharges ($14.50 to $91.00/month). The surcharge applies per person, so a married couple both on Medicare pays double.

How do I avoid IRMAA with a Roth conversion?

Size your conversion to keep your total MAGI below the first IRMAA threshold. For married couples filing jointly, that means staying under $218,000 in total MAGI (for single filers, under $109,000). If your base income is $150,000, you could convert up to roughly $68,000 without triggering any IRMAA surcharge. Spreading a larger conversion across multiple years is the most common approach.

Can I appeal IRMAA if it was caused by a Roth conversion?

No. IRMAA appeals using SSA Form SSA-44 are only available for qualifying life-changing events such as retirement, death of a spouse, marriage, divorce, or loss of income-producing property. A voluntary Roth conversion is not a qualifying event. The surcharge will apply for the full year and cannot be appealed based on a planned conversion.

Easy Eddie's Take

Here's what I tell folks. A Roth conversion is one of the best tools in the retirement toolbox. But it's got a ripple effect that catches people off guard.

You convert a chunk of your IRA to a Roth. That's income this year, so your tax bill goes up. If you're collecting Social Security, more of your benefit becomes taxable too. And then, two years later, your Medicare premium jumps because Medicare looks at what you earned 24 months ago.

Three hits from one decision.

The fix is simple: size your conversion to fit. Figure out how much room you have before you'd cross the IRMAA line, and convert only up to that amount each year. Spread it out. Same destination, smoother ride. Our IRMAA Trap guide breaks down every bracket and threshold, and I wrote about this whole topic in Medicare Made 123Easy (on Amazon) if you want the full picture.

This article is for educational purposes only and should not be considered tax, legal, or investment advice. Roth conversion decisions depend on your individual tax situation, income, and retirement goals. Consult your tax advisor and financial professional before making conversion decisions. IRMAA thresholds and Medicare premiums are set annually by CMS and SSA. The 2026 figures cited are from the CMS November 2025 announcement. Social Security taxation thresholds are set by federal law (26 U.S.C. Section 86) and have not been adjusted since 1993.

Disclaimer: The information in this article is for educational purposes only and does not constitute tax, legal, or investment advice. Tax laws change frequently, and individual circumstances vary. American Retirement Advisors does not provide tax or legal services. Before making any tax-related decisions, consult a qualified CPA, tax attorney, or financial planner who can evaluate your specific situation.