Medicare Part B premiums are $202.90 per month in 2026 for most, but not all, seniors who are covered by this popular government insurance program. However, some seniors pay more — potentially much more.
If there’s a chance you could be one of those seniors facing a bigger bill, you should be aware of a Roth conversion move that could potentially slash your Medicare premiums for the rest of your life.
Here’s why this move might be a good one, along with some insight into why some retirees get stuck paying higher Medicare premiums than others.
Why do some Medicare retirees pay higher premiums than others?
Medicare is supposed to provide affordable insurance coverage for seniors, but the rules require that certain retirees using this healthcare coverage pay more costs. Specifically, this happens because of the Medicare Income-Related Monthly Adjustment Amount (IRMAA). Since 2007, IRMAA has impacted high-earning retirees and left them with higher costs for Medicare Part B, while IRMAA surcharges for Medicare Part D were put in place in 2011.
Under the rules governing the Medicare Income-Related Monthly Adjustment Amount, once your income exceeds a certain amount, you no longer pay the standard premium — you pay a higher one. The specific amount of the surcharge varies depending on just how high your income is.
For example, if your income goes above $109,000 in 2026 and you are a single tax filer, then you start to incur additional costs. There’s an $81.20 surcharge for single filers with incomes between $109,000 and $137,000 in 2026. Married joint filers have a higher income limit and won’t be hit with a surcharge until their combined income is $218,000 — but they still pay more.
The surcharge only grows as your income does, and it can be very substantial. If you have an income of $500,000 or higher as a single tax filer or an income of at least $750,000 as a married joint filer, then you will have a $487.00 surcharge and must pay Medicare Part B premiums totaling $689.90 instead of $202.90 in 2026.
Income from two years prior is the income that’s used to determine if you pay higher premiums, so when your income fluctuates, this can be a huge problem.
How does a Roth conversion help you avoid a big increase in your Medicare premiums?
Converting to a Roth account if you have traditional retirement accounts may help you avoid getting stuck with extra Medicare premiums because Roth distributions are treated differently under the law.
When you withdraw money from a Roth IRA, it doesn’t count in the income that’s used to determine if you owe a Medicare surcharge (provided you follow withdrawal rules). You also typically don’t have to pay federal taxes on your Roth distributions, either. So, your conversion can sometimes result in very significant savings in your later years.
However, you should be aware of the fact that a Roth conversion is a taxable event. Money you convert can be treated as income and could push you into a higher tax bracket and leave you with a huge tax bill when you make the conversion. If you are over 63, this could also affect your Medicare premiums two years into the future since your income from two years back determines what premiums you’ll have to pay for Medicare.
The best way to minimize the financial impact of a Roth conversion is to complete your conversion at an optimum time based on your tax strategy. This could mean doing it in a year when your income is relatively low, or when your tax rate is relatively low.
If you make the conversion, you can avoid having to take Required Minimum Distributions, which gives you more flexibility in withdrawals. You can also make sure you aren’t sticking yourself with a lot of taxable income that puts you over the edge in terms of how much your Medicare premiums will cost. A financial advisor can help you to decide if a Roth conversion is right for you and, if so, can help you be strategic in your timing so you can keep your Medicare premiums and tax costs down.
Top Gaining Stocks
Top Losing Stocks