Medicare Premiums after roth conversion

Submitted by Jim Frye on Mon, 2022-11-07 15:48

In 2021, I have a client who converted approximately $200,000 from my traditional IRA to a Roth IRA. This will substantially increase the monthly charge for medicare premiums. Is there any way I can appeal this or talk to Social Security and get a reprieve, since this is a onetime event and not likely to reoccur?



Submitted by Alan - IRA critic on Mon, 2022-11-07 16:51

  • SSA does not consider the execution of a conversion or the lower income following a large conversion year to be a life changing event. Even if the client did the conversion the year following retirement, the conversion year will be a year later than the loss of wage income. If client retired in 2020 and income dropped in 2021, they could appeal the 2022 surcharge, but if the client converted in 2021, driving the 2023 IRMAA surcharge, appealing the 2023 surcharge would likely be a waste of time.
  • Due to conversion driven IRMAA surcharges, it is recommended that the surcharge be factored into the decision on how much to convert, in addition to the marginal tax rate due. IRMAA therefore contributes to the comparison of the conversion cost with future tax rates on IRA distributions if a conversion was not done to reduce the IRA balance.


Submitted by john matros on Mon, 2022-11-07 21:38

I converted my IRA to Roth and had to pay extra to medicare 2yrs later. That is now over, what I want to know is when I withdraw from the Roth will this now still be counted toward my medicare ParTs B&D.?



Submitted by Alan - IRA critic on Mon, 2022-11-07 21:45

None of your tax free Roth IRA distributions will affect your Medicare Premiums (IRMAA). However, it is possible that some of these Roth IRAs are not yet qualified (held 5 years plus age 59.5), and if the distribution is large enough to include non qualified gains, those gains would be included in AGI for IRMAA purpose. If you want to avoid this, limit your non qualified Roth distributions to your Roth IRA. That means if your only Roth contributions were conversions, limit your Roth IRA distributions to the amount you converted until your Roth IRA becomes qualified. 



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