Roth Conversion Before RMDs at 73: Does It Pay After IRMAA?
Quick answer
Usually yes, if you stay under the IRMAA line. In 2026 the first Medicare surcharge tier begins above $109,000 of MAGI single / $218,000 joint and raises 2028 Part B premiums by roughly $1,000 to $1,100 per person. A single 66-year-old with $80,000 of income can convert $29,000 with no surcharge; converting $41,800 to fill the 22% bracket earns only $853 more after-tax edge but triggers the surcharge, so the smaller conversion wins.
The window: retirement to age 73 (or 75)
SECURE 2.0 (P.L. 117-328) set the RMD start age at 73 for anyone born 1951 through 1959 and 75 for anyone born in 1960 or later. The years between your last paycheck and that first RMD are the only years in which taxable income is entirely under your control: no salary, no forced withdrawal, Social Security deferrable to 70.
The RMD is the reason to act. At 73 the Uniform Lifetime Table divisor is 26.5, so the first RMD is 3.77% of the prior December 31 balance, rising to 4.07% at 75 and 4.95% at 80. A $900,000 IRA growing at 6% becomes $1,353,000 by 73 and produces a $51,067 RMD in year one. Add a pension and Social Security and a retiree who spent a decade in the 12% bracket lands permanently in 22% or 24% and above the IRMAA line. The window is the chance to pay 22% by choice, not 24% by mandate.
How IRMAA actually charges you
IRMAA (Income-Related Monthly Adjustment Amount, 42 U.S.C. 1395r(i)) is a surcharge on Medicare Part B and D premiums, set by SSA from the return filed two years earlier. Three features make it unlike a tax bracket:
- It is a cliff. One dollar over the threshold triggers the full tier surcharge for the whole year; there is no phase-in.
- It has a two-year lookback. 2026 MAGI sets the 2028 premium. A conversion at 63 affects your first Medicare year at 65, which is why the calculator starts checking at 63.
- It counts MAGI, not taxable income. Deductions do not help; MAGI is AGI plus tax-exempt interest, so a conversion adds to it dollar for dollar.
The 2026 standard Part B premium is $202.90 per month. The first surcharge tier, for MAGI above $109,000 single / $218,000 joint, adds roughly $1,000 to $1,100 a year for Part B plus a smaller Part D add-on; higher tiers scale up. For a couple both on Medicare every figure doubles, since each spouse pays on the same joint MAGI.
SSA lets you appeal an IRMAA determination (Form SSA-44) for a life-changing event such as retirement, a spouse's death, or divorce. A Roth conversion is not one; the surcharge from a conversion year cannot be appealed away.
Worked example: single, 66, $80,000 of income, $900,000 IRA
Ruth is 66, single, retired, with $80,000 of other income (pension plus taxable Social Security), $900,000 in a traditional IRA, 4% state tax, 6% expected returns, a 24% expected federal rate on RMDs, and a 10-year horizon.
- Taxable income before converting: $80,000 - $16,100 = $63,900, in the 22% bracket.
- Room to the top of 22%: $105,700 - $63,900 = $41,800.
- Room under the IRMAA line: $109,000 - $80,000 = $29,000.
Those ceilings are $12,800 apart, and that gap decides the year.
| Conversion | Federal tax | State tax | Total tax | Effective rate | Edge at 10 years | IRMAA in 2028? |
|---|---|---|---|---|---|---|
| $29,000 (stay under IRMAA) | $6,380 | $1,160 | $7,540 | 26.0% | +$1,933 | No |
| $41,800 (fill the 22% bracket) | $9,196 | $1,672 | $10,868 | 26.0% | +$2,786 | Yes |
Both conversions are taxed at exactly 22% federal. The extra $12,800 adds $853 of after-tax edge at year 10 (Roth value minus what the traditional money plus the kept tax would be worth after tax), but pushes 2026 MAGI to $121,800 and buys a 2028 Part B surcharge of roughly $1,000 to $1,100. Net: negative by $150 to $250, which is why the calculator's Lever Board ranks "stay under the IRMAA line ($29,000)" first. To test your own ceilings, run your own numbers in the Roth conversion calculator with your age set to 63 or older so the IRMAA check runs.
The seven-year plan: what $29,000 a year does to the RMD
Ruth has seven conversion years before her first RMD. Repeating each year (income and brackets held constant):
| No conversions | $29,000 per year for 7 years | $41,800 per year for 7 years | |
|---|---|---|---|
| Total converted | $0 | $203,000 | $292,600 |
| Total conversion tax paid | $0 | $52,780 | $76,076 |
| IRMAA surcharge years | 0 | 0 | 7 (about $7,000 to $7,700) |
| IRA balance at 73 (6% growth) | $1,353,000 | $1,110,000 | $1,002,000 |
| First RMD at 73 (divisor 26.5) | $51,067 | $41,881 | $37,827 |
| Income at 73 (pension + RMD) | $131,067 | $121,881 | $117,827 |
The uncomfortable finding: even the aggressive plan does not get Ruth under the IRMAA line at 73. Pension plus RMD exceeds $109,000 in every column, so she pays the surcharge from 75 onward regardless. What the conversions do is shrink the RMD by $9,200 to $13,200 a year for life, move $200,000 to $290,000 into an account with no RMD and no tax for heirs, and keep her near tier 1 instead of drifting into tier 2 as the balance compounds.
That reframes the decision. If RMDs will put you over the IRMAA line permanently anyway, a surcharge in the conversion years is a cost you pay regardless, and filling the 22% bracket ($41,800) becomes reasonable: seven extra surcharge years cost about $7,000 to $7,700, and the extra $89,600 converted at 22% instead of 24% later saves two points, about $1,792, before tax-free compounding. If RMDs will keep you under the line, protect it. The RMD calculator projects the balance and RMD at 73 or 75, the input that resolves this.
The joint-filer case is easier, until it is not
A married couple has twice the IRMAA room ($218,000) and a 22% bracket running to $211,400 of taxable income. A couple both 66 with $120,000 of pension and Social Security has $87,800 of taxable income after the $32,200 standard deduction, still in the 12% bracket with $13,000 of room, and $98,000 of room under the IRMAA line. Converting $98,000 costs $20,260 federal plus $3,920 state ($24,180, 24.7% effective) with an edge of +$8,707 at 10 years against a 24% retirement rate, or +$22,747 if the money would face 32% later.
Why would a couple face 32%? Because one of them will eventually file single. The survivor keeps most of the income (the larger Social Security benefit, a survivor pension, all of the RMD) but gets the single bracket table and the $109,000 IRMAA line. A $1.8 million IRA at 73 produces a $68,089 RMD; a survivor with that RMD plus $100,000 of retained income has $152,000 of taxable income, deep in the 24% single bracket and $59,000 over the IRMAA threshold. Converting at 22% under the joint IRMAA line while both spouses are alive is the cheapest tax the survivor will ever see on that money. If that applies, enter 32% as the retirement rate when you run your own numbers in the Roth conversion calculator; the verdict and Lever Board change materially.
Order of operations for a conversion-window year
- Project the RMD first. Balance at 73 (or 75) at your expected return, divided by 26.5. This sets the retirement rate to enter.
- Compute two ceilings: bracket room (top of 22% or 24% minus taxable income) and IRMAA room (threshold minus MAGI). Convert to the lower one unless step 1 shows you will be over IRMAA permanently.
- Delay Social Security if possible. Each year deferred to 70 adds 8% to the benefit and keeps that income out of the conversion years.
- Convert in December, once the year's interest, dividends, and fund distributions are known; an overshoot cannot be recharacterized.
- Pay the tax from outside the IRA. The calculator's edge assumes this; paying from the conversion shrinks the Roth and, under 59.5, adds a 10% penalty.
- Check the 65+ deductions. The additional standard deduction ($2,050 single, $1,650 per spouse joint) and the OBBBA $6,000 senior deduction (2025 to 2028, phasing out above $75,000 single / $150,000 joint MAGI) widen bracket room but do not reduce MAGI, so they do not help with IRMAA.
FAQ
Q: Does a Roth conversion count toward IRMAA?
Yes. IRMAA uses MAGI (AGI plus tax-exempt interest), and a conversion is included in AGI in full. A $50,000 conversion by a single filer with $80,000 of other income produces $130,000 of MAGI, $21,000 over the 2026 threshold, and triggers the tier-1 surcharge two years later.
Q: How long does the IRMAA surcharge from a conversion last?
One year. SSA resets the determination annually from the return filed two years earlier, so a 2026 conversion affects only 2028 premiums. Seven conversion years produce seven surcharge years.
Q: At what age does IRMAA start to matter for a Roth conversion?
At 63, not 65. Because of the two-year lookback, income at 63 sets the premium at 65, the first Medicare year. Below 63 a conversion cannot reach a Medicare premium year, so the calculator runs the IRMAA check only from 63.
Q: Do Roth IRAs have RMDs?
No, not for the original owner at any age, and since 2024 (SECURE 2.0) Roth 401(k)s are exempt too. Every dollar converted before 73 leaves the balance the 26.5 divisor applies to, which is why conversions lower future RMDs.
Q: Is it worth converting if the RMD alone will push me over the IRMAA line?
Often yes, because the surcharge is then a cost you pay either way and the conversion still moves money from 24% to 22%. A single filer with a $1.35 million projected balance at 73 has a $51,067 RMD that, on top of $80,000 of pension, lands $22,000 over the line; converting $41,800 a year for seven years cuts the RMD to $37,827 and moves $292,600 into the Roth at 22%.
Q: What is the 2026 IRMAA threshold for married couples?
$218,000 of joint MAGI on the 2026 return, affecting 2028 premiums. Both spouses on Medicare pay the surcharge, so a couple crossing the line by $1 pays about $2,000 to $2,200 of extra Part B premiums that year.