Roth conversions get pitched as a clean trade. Pay tax now at a rate you know. Skip tax later at a rate you do not. For a lot of people that math holds up fine.
What the pitch leaves out is the bill that shows up two years down the road. It does not come from the IRS. It comes from Medicare.
What a conversion actually does
A Roth conversion moves money from a pre-tax account into a Roth account. That could be a traditional IRA or an old 401(k). The amount you convert gets added to your taxable income for that year.
That last part is the whole story. A $60,000 conversion is not a transfer on paper. As far as your tax return is concerned, you earned an extra $60,000 this year.
Most people see the tax hit coming. Fewer see what that bigger income number touches next.
The two year lookback
Medicare Part B and Part D premiums are not the same for everyone. Higher earners pay a surcharge on top of the standard premium. The formal name is the income related monthly adjustment amount. Most people just call it IRMAA.
Here is the timing problem. The surcharge runs off your income from two years back, not the return you filed last spring. Your 2026 premium is set by your tax year 2024 return. So a conversion you do this year can raise your premiums two years out, long after you stopped thinking about it.
The Social Security Administration explains how Medicare premiums work for higher income beneficiaries. That page also covers how to ask for a new decision after a life event like retiring.
Why the brackets behave like cliffs
IRMAA does not phase in. It steps. Cross a line by one dollar and you sit in the next tier for the whole year.
The first tier adds $81.20 a month to the Part B premium and $14.50 to a Part D plan. That is $95.70 a month, or roughly $1,148 for the year, per person. A married couple both on Medicare pays it twice.
For 2026, the first tier starts above $109,000 in modified adjusted gross income for single filers. For joint filers it starts above $218,000. A conversion that pushes you $500 over one of those lines costs the same as one that pushes you $9,000 over.
That is what turns conversion sizing into real work rather than a round number decision. Firms that handle this well, Capital Choice Arizona among them, run the numbers against the bracket edges first. The amount comes second. Convert to the line, not past it.
Timing is most of the game
The best window for a conversion is usually a low income year. Think of the gap between the year someone stops working and the year required minimum distributions begin.
In that window, income is low. The tax cost of converting is low. And there is room under the thresholds. Once Social Security starts and required distributions kick in, that room shrinks fast.
People who convert well tend to map the sequence years ahead of the first conversion. It is a multi-year plan, not a single move.
Who should be paying attention
This matters most if you are in your late 50s or 60s. It matters more if you hold a large balance in pre-tax accounts and expect Medicare in your near future. It matters much less if you are 35 with a modest IRA.
It also matters if your income swings. One big year from a home sale, a severance package, or a business exit can stack on top of a conversion. That combination puts people somewhere they never meant to land.
None of this makes conversions a bad idea. Plenty of people should do one. It just means the number you convert deserves more thought than the decision to convert at all.