IRMAA hit during ROTH Conversion

Submitted by Ram Iyer on Mon, 2022-08-22 19:35

Hello:
During ROTH Conversion, I am sure I am going to take a hit in IRMAA. It will spike. After conversion, it will settle down. Is there a way to avoid this? If not, once it settles down, is there a way to make sure IRMAA reflects the new income?

Thanks



Submitted by Alan - IRA critic on Mon, 2022-08-22 20:22

IRMAA will reflect the additional MAGI for the conversion in the second year after the conversion. If MAGI then returns to prior levels following the year of conversion IRMAA will also return to the inflation adjusted tier for the year following the conversion. This is automatic, but you might target your conversion for an amount that does not trigger IRMAA or at least does not slightly penetrate the next higher tier. You will have some leeway due to inflation increases in the IRMAA tiers, but the amount of head room you have is tough to pinpoint.



Submitted by Ram Iyer on Mon, 2022-08-22 22:22

It will be tricky.



Add new comment

Log in or register to post comments