A couple in their early 60s sits down in December to move $100,000 from a traditional IRA into a Roth. The logic feels airtight: they are retired, their taxable income is lower than usual, and rates could climb later. What they may not realize is that the conversion can set their Medicare Part B and Part D premiums two years from now, with the bill landing just as Medicare becomes part of the household budget.
Only about 8% of Medicare Part B beneficiaries pay an income-related surcharge, and the first 2026 IRMAA tier starts when MAGI exceeds $218,000 for joint filers or $109,000 for single filers. A modest Roth conversion may not matter for households well below those numbers. But for people approaching Medicare whose income already sits near a bracket, a December conversion can create a premium surprise two years later.
The Two-Year Lookback Nobody Warns You About
The Social Security Administration generally sets Medicare premiums each year using tax information from two years earlier. Your 2026 premium generally reflects your 2024 income. Your 2028 premium generally reflects your 2026 income. A Roth conversion completed in the tax year you turn 64 can show up on your Medicare bill at 66, and the surcharge can repeat if conversions or other income spikes continue across more than one calendar year.
MAGI for IRMAA purposes is adjusted gross income from Form 1040 line 11, plus tax-exempt interest from line 2a. Municipal bond income counts even though it feels tax-free. So does the taxable portion of a Roth conversion, layered on top of Social Security, pensions, dividends, and any wages.
What the Surcharge Actually Costs
Assume that joint-filing couple normally reports $180,000 of MAGI. A taxable $100,000 conversion pushes them to $280,000, landing in the second IRMAA tier for 2026: joint MAGI above $274,000 and up to $342,000. Here is what that costs, per person, on top of the $202.90 standard Part B premium:
| Joint MAGI (2026 rules) | Part B surcharge (per person, monthly) | Part D surcharge (per person, monthly) |
|---|---|---|
| ≤ $218,000 | $0.00 | $0.00 |
| $218,001 to $274,000 | $81.20 | $14.50 |
| $274,001 to $342,000 | $202.90 | $37.50 |
| $342,001 to $410,000 | $324.60 | $60.40 |
| $410,001 to $750,000 | $446.30 | $83.30 |
| $750,001 or more | $487.00 | $91.00 |
At the tier the $100,000 conversion triggers, each spouse pays $202.90 extra for Part B and $37.50 extra for Part D every month. For the household, that is $5,769.60 of extra Medicare premiums, on top of the federal tax on the conversion itself. Had they capped the taxable conversion at less than $94,000 to stay at or below $274,000 of MAGI, they would have paid only the first-tier surcharge, or about $2,296.80. A single filer in the comparable second IRMAA tier, above $137,000 and up to $171,000, would pay about $2,884.80 for the year.
Stack that on top of the federal tax. The couple’s ordinary bracket for 2026 taxable income above $211,400 and up to $403,550 is 24%, so the last dollars of the conversion may be taxed at 24 cents on the dollar federally, plus any state tax and Medicare surcharge. A conversion can also cause more Social Security to become taxable if provisional income has not already pushed benefits to the maximum taxable amount. The effective marginal cost can climb well above the statutory tax bracket.
Do Not Count on SSA-44 to Fix It
Form SSA-44 lets you request an IRMAA reduction when a qualifying life-changing event reduces household income. The listed events include marriage, divorce or annulment, death of a spouse, work stoppage, work reduction, loss of income-producing property, loss of pension income, and an employer settlement payment. A voluntary Roth conversion is not on that list, so the conversion alone generally will not support an SSA-44 reduction.
One more trap: the survivor bracket. Joint thresholds are roughly double the single thresholds at the lower IRMAA tiers. If one spouse dies, the survivor may eventually be measured against the single-filer IRMAA table on similar portfolio income, and a household that stayed under the joint threshold can land in a surcharge tier as a single filer.
What To Do Before December 31
- Pull your projected MAGI for the current tax year, including the tax-exempt interest add-back, and compare it with the 2026 IRMAA thresholds: $218,000 for joint filers or $109,000 for single filers before the first surcharge begins. Size any conversion to stop short of the next cliff if avoiding a higher Medicare tier is part of the plan.
- Split a large conversion across two or three tax years if that keeps each year in a lower combined tax and IRMAA range. The 2026 top ordinary rate stays at 37% above $768,700 of taxable income for joint filers, so there is no automatic federal rate cliff forcing a retiree to convert everything at once.
- If household MAGI is within $20,000 of a bracket in a year when you plan to convert, sell appreciated property, or take a large retirement-account distribution, run the numbers across federal tax, Social Security taxation, and IRMAA together. The Medicare surcharge is not a tax bracket, but it can function like one when one extra dollar of MAGI pushes a full year of premiums higher.
Source: CMS 2026 Medicare Parts A & B Premiums and Deductibles fact sheet; SSA Form SSA-44; SSA POMS guidance on IRMAA MAGI; IRS tax year 2026 inflation-adjustment guidance, including Revenue Procedure 2025-32. Article uses 2026 plan-year rules.
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