do roth conversions increase medicare premium amounts
I had a meeting with a client today that told me during a call with social security, she was told that roth conversions do not count as income with respect to medicare premiums. This is the first time I’ve heard this, as all my other retired clients had increased medicare premiums after they converted large amounts to a roth.
Does anyone know if roth conversions count as income in the medicare premium calculation?
Permalink Submitted by Alan - IRA critic on Fri, 2023-02-17 15:45
Conversions are included in MAGI for purposes of the IRMAA surcharges. Since IRMAA tiers are cllff thresholds, a conversion amount might be chosen to result in MAGI falling in the top portion of a tier with a margin for error to prevent moving into the next tier. The additional premiums for IRMAA could be incorporated into a marginal tax rate for the conversion amount selected to compare with future projected tax rates had the conversion not been done. Finally, note that a conversion now may trigger IRMAA, but will also reduce future RMDs that could trigger IRMAA in the future.