Retirees Doing Big Roth Conversions Are Being Warned About This IRMAA Surcharge That Cannot Be Reversed Even With Form SSA 44
The income spike from a Roth conversion can blow past Medicare’s income thresholds and trigger an IRMAA surcharge that most people never see coming until the bill arrives two years later. With the 2026 standard Part B premium now at…
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On her September 15, 2022 Women & Money episode, Suze Orman dropped a line every retiree planning a Roth conversion should hear before they sign the paperwork: “we have a new IRMAA in our life.” The income spike from a Roth conversion can blow past Medicare’s income thresholds and trigger a surcharge that most people never see coming until the bill arrives two years later.
Convert a chunk of a traditional IRA to a Roth in your 60s and the entire converted amount counts as ordinary income for that year. That income lands on your tax return, and Medicare uses your modified adjusted gross income from two years prior to set your Part B and Part D premiums. The penalty surfaces long after the conversion feels like a closed decision.
Orman is right, and the math is brutal
IRMAA, the Income-Related Monthly Adjustment Amount, works as a cliff. Cross a threshold by one dollar and your Medicare premium jumps for the entire year, with no phase-in and no proration.
Here is how the trap snaps shut. The standard 2026 Part B premium is $202.90 per month per person, up from $185.00 in 2025. A married couple filing jointly with MAGI at or below $218,000 pays that base rate. Push joint MAGI one dollar above that line and both spouses move into the first IRMAA tier, where Part B climbs to $284.10 per person each month, plus a Part D surcharge on top. That single-dollar crossing costs a couple on Medicare roughly $2,297 more per year before Part D surcharges are even counted. The 2026 IRMAA brackets are based on your 2024 tax return, because Medicare’s two-year lookback rule means today’s income decisions reach forward into future premiums.
The damage scales fast. A couple converting $200,000 in one year, on top of $80,000 of other taxable income, can land in the higher IRMAA tiers. Their combined Part B and Part D surcharges for that single year can run several thousand dollars above what a couple just under the threshold pays. That bill arrives on top of the federal income tax owed on the conversion itself, which under 2026 brackets puts joint taxable income above $211,400 at a 24% marginal rate.
Orman pays it herself. On that same episode she said “I think we pay 526 a month KT out of our Social Security check for Medicare Part B”, which places her household in one of the upper IRMAA tiers. For 2026, total monthly Part B premiums for IRMAA-affected beneficiaries range from $284.10 to $689.90, with Part D surcharges adding another $14.50 to $91.00 per month on top.
The two-year lookback is what catches people
A conversion completed in 2026 sets your 2028 Medicare premiums. By the time the higher bill arrives, the money is already in the Roth and you cannot reverse it. The IRS eliminated Roth recharacterizations in 2018, so there is no do-over.
One escape hatch exists. SSA Form SSA-44 lets you request an IRMAA adjustment after a life-changing event such as retirement, the death of a spouse, or divorce. A one-time Roth conversion does not qualify. Selling a rental property does not qualify either. The surcharge sticks for the full year.
The variable that flips the answer
The factor that decides whether a Roth conversion is worth the IRMAA hit is your expected future tax rate. If you sit in the 24% federal bracket today and expect to drop to 12% in your 70s once required minimum distributions calm down, paying tax now plus a $5,000 IRMAA surcharge to convert $100,000 is a bad trade. You paid roughly 29% effective to avoid a 12% bill later.
Flip the scenario. If you expect higher rates later because RMDs will be enormous or because federal rates rise, paying IRMAA once on a well-sized conversion can save six figures over a 20-year retirement. One additional wrinkle worth noting: the One Big Beautiful Bill Act, signed in July 2025, made the TCJA income tax structure permanent and created a temporary senior deduction for taxpayers aged 65 and older. The deduction runs $6,000 per qualifying spouse (up to $12,000 for a married couple where both spouses are 65 or older) and applies to tax years 2025 through 2028. The catch is that the benefit phases out starting at $75,000 MAGI for single filers and $150,000 for couples filing jointly, disappearing entirely above $175,000 and $250,000, respectively. Retirees doing large conversions will often exceed those phaseout ranges, so any tax-rate projection should account for how much of that deduction, if any, actually survives.
The lever is conversion size. Converting $40,000 a year for five years often keeps you under the next IRMAA tier each year. Converting $200,000 in one shot blows through three tiers at once.
What to actually do
- Pull last year’s tax return, find your MAGI, and add your planned conversion. Check where the total lands against current IRMAA brackets at Medicare.gov before you pull the trigger.
- Build a multi-year conversion ladder. Most planning software solves for the largest conversion that keeps you below the next IRMAA cliff.
- Track the five-year rule on each conversion. Orman covers this in her Women & Money app masterclass on the five-year rule and Roth conversions; each converted amount has its own five-year clock before earnings come out penalty-free.
- If a qualifying life event hits, file SSA-44 the year the higher premium kicks in. The form is free and the appeal is routine.
Orman’s IRMAA warning is a reminder that a Roth conversion run without checking the next two years of Medicare premiums can cost more than it saves. The conversion is the easy part. The surcharge is the part nobody mentions until it shows up in the mail.
Editor’s note: This pass corrected the One Big Beautiful Bill Act senior deduction phaseout figures: for married couples filing jointly, the phaseout begins at $150,000 MAGI (not $75,000), and a qualifying couple can claim up to $12,000 total (not $6,000), with the benefit expiring after the 2028 tax year. The article also adds the estimated annual cost of crossing the first IRMAA tier, approximately $2,297 per year for a couple, based on confirmed 2026 Part B premium data from CMS.
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