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 at $202.90…
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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 signing 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 lands two years later.
Converting a chunk of a traditional IRA to a Roth in your 60s means the entire converted amount counts as ordinary income for that tax year. Medicare then uses your modified adjusted gross income (MAGI) from two years prior to set your Part B and Part D premiums. By the time the higher bill arrives, the conversion feels like ancient history.
Orman is right, and the math is brutal
IRMAA, the Income-Related Monthly Adjustment Amount, operates as a cliff system. Cross a threshold by one dollar and your Medicare premium jumps for the full year, with no phase-in and no proration. That cliff mechanic is precisely what makes a Roth conversion so dangerous when it is sized without checking the IRMAA tiers first.
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. That single-dollar crossing adds $81.20 per month per person in Part B costs, which for a couple on Medicare totals roughly $1,949 more per year in Part B surcharges alone. Part D surcharges layer on top at $14.50 per person per month for that first tier, pushing the combined annual hit past $2,200. The 2026 IRMAA brackets are based on your 2024 tax return, because Medicare’s two-year lookback rule means today’s income decisions reach into future premiums.
The damage scales quickly from there. The second IRMAA tier for joint filers begins above $274,000 in MAGI and pushes Part B to $405.80 per person per month, with Part D adding $37.50. A couple converting $200,000 in a single year on top of $80,000 of other taxable income can land in those higher tiers, and their combined Part B and Part D surcharges for that year can run several thousand dollars above what a couple just under the first threshold pays. That bill arrives alongside 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”, placing 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 there is no path back. The IRS eliminated Roth recharacterizations in 2018, so no do-over exists.
One escape hatch does exist: SSA Form SSA-44 lets you request an IRMAA adjustment after a qualifying 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 regardless of how it arose.
Looking ahead, CMS applies an annual inflation adjustment to the first four IRMAA brackets each fall, and retirees building multi-year conversion plans should track those updates each November when the following year’s figures are released.
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 meaningful IRMAA surcharge to convert $100,000 is likely a bad trade. The combined effective rate paid today could easily exceed the rate you would have faced by waiting.
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 planning wrinkle deserves attention here: the One Big Beautiful Bill Act, signed on July 4, 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 phaseout begins at $75,000 MAGI for single filers and $150,000 for couples filing jointly, disappearing entirely above $175,000 and $250,000, respectively. Because Roth conversion income counts toward MAGI, retirees doing large conversions will typically exceed those phaseout ranges and should factor how much of that deduction, if any, actually survives into any tax-rate projection.
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 multiple tiers at once and makes the math very difficult to recover.
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 sized without checking the next two years of Medicare premiums can cost more than it saves. The conversion itself is the straightforward part. The surcharge is the part nobody mentions until it shows up in the mail.
Editor’s note: This pass added the second IRMAA tier figures for joint filers ($405.80 Part B and $37.50 Part D per person per month above $274,000 MAGI), specified the One Big Beautiful Bill Act signing date as July 4, 2025, and noted that Roth conversion income counts toward MAGI for purposes of the new senior deduction phaseout, which begins to reduce the benefit above $150,000 for joint filers and eliminates it entirely above $250,000.
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