Suze Orman Has Been Pounding the Table on This Roth Rule for Years and Most Retirees Still Do Not Understand Why Medicare Cares

Suze Orman has been pounding the table on Roth accounts for years, and her case is sharper than the tax argument most people hear. In her “Suze School: Revisiting The Five Year Rule For Roth Retirement Accounts” episode and companion segments, she keeps circling back to a mechanic that catches retirees by surprise: every dollar you pull from a traditional 401(k) or IRA counts as income for Medicare purposes. Every dollar from a qualified Roth does not.

She said on the show: “income from a retirement account counts towards taxable income towards your Social Security. Also your Medicare premium amount. So you’re better off with a Roth ira. Always.”

The stakes are concrete. A 67-year-old couple who pulls an extra $50,000 from a traditional IRA to replace a roof can trigger a Medicare premium surcharge that follows them around for a full year, starting two years later. If the same couple had pulled from a Roth, Medicare would never have seen the withdrawal.

The verdict: she is right, and the math is unforgiving

IRMAA, the Income-Related Monthly Adjustment Amount, is the surcharge tacked onto Medicare Part B and Part D premiums when your modified adjusted gross income crosses a threshold. Suze flagged the part most people miss: IRMAA looks at your MAGI from two years prior. A spike in 2026 hits your 2028 premium.

The base Part B premium in 2026 sits in the $185 range per person per month. Suze mentioned she and KT pay around $526 a month out of their Social Security checks because of where their income lands. At the top IRMAA tier, the surcharge can roughly triple the base premium, per person.

Run the scenario. A married couple, both 70, lives on Social Security plus $40,000 a year from a traditional IRA. Their MAGI sits around $90,000, well below the first IRMAA cliff (around $212,000 for joint filers in recent brackets). One year they pull an extra $60,000 from the traditional IRA for a roof and a used car. MAGI jumps to roughly $150,000. Still under the first cliff. No IRMAA hit.

Now run the same scenario with a couple whose baseline MAGI is already $190,000 because of pensions, dividends, and larger RMDs. The same $60,000 traditional withdrawal pushes them past the first cliff and into the second. Each spouse picks up an IRMAA surcharge for 12 months. At recent bracket levels, that can run an extra $70 to $280 per person per month, depending on tier. Couple total: anywhere from roughly $1,700 to $6,700 in extra premiums for that single year, all caused by one withdrawal.

Pull the same $60,000 from a Roth and the MAGI line never moves. No surcharge.

The variable that decides whether Roth saves you anything

The factor that determines whether Suze’s advice changes your life or barely matters is how close your baseline retirement MAGI sits to the next IRMAA cliff.

If you live comfortably below the first threshold and your RMDs are modest, a Roth balance is mostly insurance against a future cliff you may never hit. The tax-free withdrawals are nice; the IRMAA argument is mild.

If your baseline is within $30,000 to $50,000 of a cliff, every traditional dollar is dangerous. RMDs that kick in at 73 from traditional accounts will keep adding fuel for the rest of your life. There is no RMD from a Roth. That is the pressure release valve Suze keeps pointing to.

What to do this week

1. Pull your most recent tax return, find your AGI, and look up the current IRMAA brackets on Medicare.gov. Mark how many dollars of cushion you have before the next cliff.
2. If you had a one-time income event from a property sale or large withdrawal, file Form SSA-44 for a life-changing event to ask Social Security to adjust your IRMAA based on current income.
3. If you are in your 60s and pre-RMD, model a partial Roth conversion ladder. Convert just enough each year to fill out your current tax bracket without crossing an IRMAA cliff two years out.
4. Mind the Roth five-year rule. Each conversion starts its own five-year clock, and qualified tax-free, penalty-free withdrawals require both age 59½ and a five-year-old Roth.

Suze’s real point is about decoupling your retirement income from the IRMAA cliff for the rest of your life, and the only account that does that cleanly is a Roth.