He Converted $120,000 to a Roth at 63 to Get Ahead of the RMDs. Medicare Later Read It as Income and Charged Him $2,400 More in Year One.
A perfectly legal Roth conversion strategy that his CPA approved left one retiree blindsided when Medicare priced his premiums two years later, and the form designed to fix exactly this kind of situation turned out to be completely off limits.
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A retiree we’ll call Bob turned 63 in 2024. He decided now was a good time to run the numbers on his traditional IRA and found the smart move was to convert $120,000 to a Roth before required minimum distributions (RMDs) came knocking. Bob’s CPA blessed his plan. The ax bill that April was steep but manageable. Then his first Medicare bill arrived in January 2026, hundreds of dollars a month higher than his neighbor’s.
The mechanic doing the damage is IRMAA, the Income-Related Monthly Adjustment Amount. Medicare prices Part B and Part D on a two-year lookback: the 2024 return sets the 2026 premium. Bob’s Roth conversion counted as ordinary income in the year he converted, and Social Security read it that way when it priced his coverage at 65.
Sticker Shock
As of 2026, the standard Part B premium is $202.90 a month for anyone whose modified adjusted gross income (MAGI) sits at or below $109,000 single or $218,000 joint. Above those thresholds, IRMAA layers on a surcharge that climbs through five higher tiers.
Bob’s 2024 MAGI was $40,000 of pension, interest and part-time consulting income, plus the $120,000 conversion. That lands at $160,000, inside the band above $137,000 and at or below $171,000, which is the second surcharge tier. His 2026 Part B premium: a month, and his Part D IRMAA adds $37.50 a month on top of whatever his plan charges. Across a full year, the Part B gap alone runs about $2,435, with roughly $450 more in Part D. Close to $2,900 in surcharges, all from one line on a return filed two years earlier.
No SSA-44 Lifeline
The instinct is to appeal. Bob asks about Form SSA-44, the “Life-Changing Event” request that lets Social Security recalculate on more recent income. It won’t work here. SSA-44 applies only when income fell because of a qualifying event: marriage, divorce or annulment, death of a spouse, work stoppage, work reduction, loss of income-producing property, loss of pension income, or an employer settlement. Voluntary Roth conversions, home sales and large capital gains fall outside that list. The form exists to reflect income that dropped, not to unwind income the beneficiary chose to recognize.
MAGI for IRMAA is Form 1040 line 11 plus tax-exempt interest from line 2a. Municipal bond income that felt tax-free on the brokerage statement still counts. So does the taxable portion of the conversion, which for a fully pretax IRA means the whole of it. If the account holds nondeductible basis, part of the conversion comes out untaxed and stays out of MAGI.
Couples and Widows Cliff
The one-year hit is finite. Bob’s 2025 return should land back under the threshold, resetting his 2027 premium to standard, assuming CMS keeps a similar structure. Social Security’s 2027 COLA is tracking toward 3.6%, and IRMAA brackets index slowly. The top thresholds of $500,000 single and $750,000 joint are frozen through 2027 and become eligible for indexing in 2028.
The survivor trap is the version that catches couples off guard. When one spouse dies, the survivor files single, and the single bands sit at half the joint ones. A household at $200,000 joint pays the standard premium. That same $200,000 for a widow filing single lands above $171,000, in the third surcharge tier, without a dollar of new income.
Look Before You Leap
If you’re planning a conversion now, here are several steps to take first:
- Model the conversion against the IRMAA bands before signing. The right size usually fills your current federal bracket without punching through the next IRMAA threshold. The first surcharge tier runs roughly $974 a year in Part B, the second about $2,435, the third about $3,895.
- Spread conversions across years. Two smaller conversions in consecutive years can keep MAGI under the first threshold where one large conversion cannot.
- File SSA-44 only for qualifying events. If you stopped or reduced work, or lost pension income, in the year Medicare is pricing against, submit the form with documentation of the trigger. A business sale qualifies only where it reflects genuine work stoppage or reduction, not simply because an asset changed hands. Note that the familiar 60-day clock applies to appealing an IRMAA determination, not to filing SSA-44 itself. Filing to contest a voluntary conversion invites a denial and leaves the surcharge in place.
The Roth-versus-RMD math still works for most people. Under current rules Bob’s own RMDs don’t begin until 75, which is exactly why the conversion window looked so appealing. It just carries a Medicare invoice that arrives on a two-year delay, and the invoice is bigger than most CPAs mention at the planning meeting. (IRMAA is one of several premium traps we mapped in a free guide to Medicare’s hidden bills.)
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Gerelyn Terzo is the author of dividend investing handbook "Dividend Investing Strategies: How to Have Your Cake & Eat It Too." A veteran financial journalist, she covers agri-finance for outlets like Global AgInvesting and the broader stock market and personal finance for 24/7 Wall Street. She began at CNBC and later helped launch Fox Business in New York. Gerelyn currently resides in Woodland Park, Colorado and dabbles in nature photography as a hobby.
