Every dollar moved from a traditional IRA into a Roth counts as ordinary income on the federal return for that year. For anyone within two years of Medicare eligibility, that income spike can trigger a surcharge adding $1,148 to $6,936 per person in annual costs. Roth conversion transactions surged 41% in the first quarter of 2026 compared with the prior year, according to Fidelity’s retirement analysis, meaning a growing number of pre-retirees may be headed toward that hit.The surcharge is called IRMAA, the Income-Related Monthly Adjustment Amount, and it arrives two full years after the conversion year. Every dollar of a Roth conversion counts as ordinary taxable income in the year it occurs, IRS Publication 590-A confirmed. How a Roth conversion inflates your Medicare premiumsA traditional individual retirement account holder who leaves funds in the account avoids IRMAA risk on that balance entirely, because no conversion triggers taxable income. Crossing a threshold by a single dollar triggers the full surcharge for that tier across every month of the year, Donna LeValley reported at Kiplinger.The surcharge also applies per person on Medicare, so both spouses pay it individually if both are enrolled in the program. “For large conversions, factor in an additional $2,000 to $8,000 or more in annual Medicare costs,” tax advisory firm SDO CPA explained.The 2026 IRMAA thresholds pre-retirees need to trackThe standard 2026 Medicare Part B premium is $202.90 per month, and IRMAA surcharges stack on top of that baseline, the Centers for Medicare & Medicaid Services (CMS) confirmed in its November 2025 announcement. The first cliff begins at a lower income level than many people approaching retirement expect, particularly for single filers.For married couples filing jointly, 2026 IRMAA surcharges begin when modified adjusted income exceeds $218,000, triggering additional Medicare costs. Couples earning $218,000 or less pay no surcharge, with the standard Part B premium set at $202.90 monthly.Related: How does Medicare IRMAA work?Income from $218,001 to $274,000 adds $81.20 monthly for Part B and $14.50 for Part D per person. Single filers face the first IRMAA tier at $109,000 of modified adjusted gross income, up from $106,000 in 2025, a 2.8% inflation adjustment, according to the CMS 2026 fact sheet.Pre-retirees who convert at 63 or 64 face a timing trap because the two-year lookback places conversion income at the point they first enroll in Medicare, Income Lab reported.The right annual amount “is the one that fits your tax bracket and your IRMAA comfort level,” certified financial planner James Brewer wrote in Forbes.Traditional IRA holders face a slower version of the same trapSomeone who keeps $500,000 in a traditional IRA and begins required minimum distributions at 73 sees taxable income grow at a measured, predictable pace, IRS Publication 590-B showed. A required minimum distribution alone rarely triggers IRMAA, but Social Security, pension income, and part-time earnings can push total Modified Adjusted Gross Income (MAGI) past the $109,000 single-filer cliff by the late 70s.Andy Barton, a certified financial planner at Boldin Advisors, explained in a Boldin Q&A session that pre-retirees often misunderstand when the IRMAA lookback period begins applying to their income decisions.More Medicare/Medicaid:Medicaid’s 5-year rule catches families off guardMedicare goes after the hospital markup you’ve paid for yearsMedicare’s new $50 GLP-1 deal has a catch most overlook”The thing to remember about IRMAA is that it’s not based on your current year of income. It has a 2-year income look-back in it,” Barton said. “So, if you’re on Medicare today, in 2026, they’re actually looking at income from 2024 in order to determine today’s IRMAA amount.”The key difference is control: a Roth converter chooses the year and the amount, making IRMAA exposure more predictable. A traditional IRA holder who defers that decision hands the timing to the RMD schedule, where the annual taxable amount is mandatory and grows whether markets cooperate or not.How to size each year’s conversion around the IRMAA cliffThe fill-the-bracket approach that many planners use for Roth conversions can backfire when the IRMAA threshold sits below the top of your tax bracket. For a married couple with $170,000 in base income, the 24% bracket extends to $403,550, but the first IRMAA cliff arrives at $218,000, based on CMS data.Converting $48,000 fills the gap between base income and the IRMAA line without triggering any surcharges on either spouse’s premiums. A $150,000 conversion would push the couple’s MAGI to $320,000, landing them in the $274,001–$342,000 IRMAA tier at roughly $5,770 per year in additional Medicare surcharges.Roth conversion planning requires annual recalibration rather than a one-time calculation, certified financial planner Chris Reddick of Chris Reddick Financial Planning explained. Reddick’s framework treats each annual conversion amount as constrained by two ceilings, the federal tax bracket and the next IRMAA tier, with the lower of the two setting the conversion ceiling.
The 2026 IRMAA thresholds could raise Medicare costs sharply, making retirement income and Roth conversion timing critical for pre-retirees.PeopleImages / Getty Images
The surcharge is a variable, not an afterthought Reddick noted that the math behind a Roth conversion changes from age 63 to age 66, as Medicare premiums and required minimum distributions alter your income each year. A single year of first-tier surcharges can still net out positive against decades of distribution-year taxes, a trade-off that Brewer’s Forbes IRMAA framework treats as the comparison retirees should make explicit.Reddick’s and Brewer’s analyses converge on one point: the IRMAA surcharge belongs inside the conversion model itself, not as a post-conversion surprise.Related: IRMAA hits retirees two years after property sale