Roth Conversions
Convert tax-deferred assets to Roth strategically to reduce lifetime taxes and future RMDs
Conversion Parameters
Recommended Annual Conversion
$18,400
fills bracket to 24% ceiling
Total Tax Cost Now
$40,480
over 10-year conversion window
Est. Tax Savings by Age 85
$94,200
vs. no conversion strategy
Bracket Filling Visualization
Current Taxable Income
$123,600
Conversion Amount
$18,400
24% Bracket Ceiling
$191,950
| Year | Age | Conversion Amount | Tax Cost | Trad. IRA After | Roth IRA After | Future RMD Reduction | IRMAA Impact |
|---|---|---|---|---|---|---|---|
| 2026 | 65 | $18,400 | $4,048 | $326,344 | $19,504 | $712 | None |
| 2027 | 66 | $18,400 | $4,048 | $327,697 | $40,178 | $1,456 | None |
| 2028 | 67 | $18,400 | $4,048 | $329,097 | $61,989 | $2,234 | Monitor |
| 2029 | 68 | $18,400 | $4,048 | $330,543 | $85,028 | $3,048 | None |
| 2030 | 69 | $18,400 | $4,048 | $332,036 | $109,370 | $3,900 | None |
| 2031 | 70 | $18,400 | $4,048 | $333,576 | $135,096 | $4,793 | Monitor |
| 2032 | 71 | $18,400 | $4,048 | $316,870 | $161,342 | $5,728 | None |
| 2033 | 72 | $18,400 | $4,048 | $299,568 | $189,178 | $6,708 | None |
| 2034 | 73 | $18,400 | $4,048 | $281,625 | $218,673 | $7,736 | None |
| 2035 | 74 | $18,400 | $4,048 | $262,994 | $249,900 | $8,814 | None |
IRMAA Impact of Roth Conversions — Short Term vs. Long Term
Roth conversions raise your MAGI, which Medicare uses (with a 2-year lookback) to set your Part B & D premiums. A conversion that triggers IRMAA costs more now but reduces future RMDs and taxes.
Section A — Short-Term IRMAA Cost (2-Year Lookback)
| Year | Conversion Amount | MAGI w/ Conversion | IRMAA Tier | Extra Premium / yr | 2-Yr Premium Hit |
|---|---|---|---|---|---|
| 2026 | $18,400 | $160,400 | Tier 1 | — | — |
| 2027 | $20,200 | $162,600 | Tier 1 | — | — |
| 2028 | $22,200 | $165,100 | Tier 1 | — | — |
| 2029 | $24,400 | $167,700 | Tier 1 | — | — |
| 2030Caution | $26,800 | $215,200 | Tier 2 | +$732 | +$1,464 |
Your 2030 conversion of $26,800 pushes projected MAGI to $215,200, crossing the Tier 2 threshold of $214,000. This triggers an extra $732/yr in Medicare premiums for 2032–2033 (the two-year lookback years). Consider capping your 2030 conversion at $23,200 to stay safely below Tier 2.
Section B — Long-Term IRMAA Benefit (Lower RMDs = Lower MAGI in Retirement)
| Age | RMD Without Conversions | RMD With Conversions | RMD Reduction | MAGI Impact | Est. IRMAA Savings |
|---|---|---|---|---|---|
| 73 | $16,800 | $11,200 | −$5,600 | ↓ Tier 2→1 | +$732 |
| 74 | $18,400 | $12,300 | −$6,100 | ↓ Tier 2→1 | +$732 |
| 75 | $20,200 | $13,500 | −$6,700 | Tier 1 | — |
| 76 | $22,100 | $14,800 | −$7,300 | Tier 1 | — |
| 77 | $24,300 | $16,200 | −$8,100 | Tier 1 | — |
| Total Est. IRMAA Savings (ages 73–77) | $1,464 | ||||
Section C — Net Cost / Benefit Summary
Short-Term IRMAA Cost
+$1,464
Extra premiums 2032–2033
Long-Term IRMAA Savings
−$1,464
Avoided premiums ages 73–74
Net IRMAA Impact
$0
Breaks even on premiums alone
The 2030 conversion briefly crosses the Tier 2 IRMAA threshold, costing an extra $1,464 in Medicare premiums over 2032–2033. However, converting now reduces your Traditional IRA balance, which lowers RMDs starting at age 73 — dropping your MAGI back below Tier 2 and saving an estimated $1,464 in avoided premiums at ages 73–74. The net IRMAA impact is roughly neutral, while the income tax savings from conversion (estimated $41,200) remain intact.
Recommended Action
Proceed with conversions through 2029 as planned. For 2030, cap your conversion at $23,200 to stay below the Tier 2 threshold ($214,000 MAGI). This avoids the $1,464 short-term premium hit while preserving approximately $38,900 in long-term tax savings.
All projections are illustrative and for educational purposes only. Conversion amounts, tax costs, and savings estimates are based on current federal tax brackets and do not account for state taxes, deductions, future law changes, or individual circumstances. This is not personalized financial, tax, or legal advice. Consult a qualified advisor before executing any Roth conversion strategy.