# Roth Conversion and IRMAA: A Houston Retiree's Guide Source: https://integrityfinancialplan.com/insights/roth-conversion-and-irmaa Last updated: 2026-10-15 Considering a Roth conversion in Houston? Review Medicare premium effects and compare scenarios with a fee-only fiduciary before deciding. Topic: Retirement. Published 2026-10-15. ## Key takeaways - A Roth conversion generally adds the untaxed part of the converted IRA amount to your income for that year. - IRMAA, Medicare's income-related premium adjustment, applies to Part B and prescription drug (Part D) premiums. It generally uses your tax return from two years earlier, so a 2026 conversion could affect 2028 premiums. - Medicare's income measure for IRMAA is adjusted gross income plus tax-exempt interest. It is not the same as the taxable income that sets your tax bracket. - A conversion made on or after January 1, 2018 cannot be undone (recharacterized), so compare scenarios before you convert. Roth conversion and IRMAA decisions belong in the same conversation. A conversion's taxable amount counts as income, and Medicare uses income to set some premiums, usually looking back two years ([IRS](https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras), [Social Security](https://www.ssa.gov/benefits/medicare/medicare-premiums.html)). That does not make a conversion a bad idea. It means the choice deserves more than a glance at your tax bracket. This guide explains how the two connect, which year is affected, and what to ask before you pick an amount. *Rules reviewed October 15, 2026.* ## How do Roth conversion and IRMAA interact? A Roth conversion generally adds the untaxed part of the converted IRA amount to your income for that year. That income can raise the figure Medicare uses for its income-related premium adjustment, called IRMAA. The link matters when you compare conversion amounts. It does not mean every conversion causes a surcharge, or that avoiding one is always the right goal. The IRS puts it plainly: "A conversion to a Roth IRA results in taxation of any untaxed amounts in the traditional IRA" ([IRS](https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras)). IRMAA is a separate cost. If your income is above certain levels, you pay more for Medicare Part B and prescription drug coverage ([Social Security](https://www.ssa.gov/benefits/medicare/medicare-premiums.html)). So a conversion can have two price tags: income tax now, and possibly higher Medicare premiums later. Both belong in the comparison. ## Which year's Medicare premiums could a conversion affect? Social Security generally sets IRMAA using your tax return from two years earlier. For example, 2026 premiums are usually based on tax year 2024 ([Social Security](https://www.ssa.gov/benefits/medicare/medicare-premiums.html)). Under that usual timing, a taxable conversion in 2026 could affect your 2028 premiums. Treat this as a planning link, not a forecast of future thresholds or your actual bill. "Generally" matters here. Social Security uses the most recent return the IRS provides. Sometimes that is the return from three years earlier ([Social Security](https://www.ssa.gov/benefits/medicare/medicare-premiums.html)). Schwab describes the usual case as income "reported in your tax return two years ago" ([Schwab](https://www.schwab.com/learn/story/how-higher-income-can-affect-medicare-premiums)). ## Is Medicare's income measure the same as taxable income? No. For IRMAA, Social Security uses modified adjusted gross income (MAGI), defined as "your total adjusted gross income and tax-exempt interest income" ([Social Security](https://www.ssa.gov/benefits/medicare/medicare-premiums.html)). That is not the taxable income figure that sets your federal tax bracket. Ask your tax preparer to confirm the right number before comparing a conversion with Medicare's premium levels. Two things follow from that definition: - **Deductions work differently.** AGI is figured before your standard or itemized deduction ([IRS](https://www.irs.gov/e-file-providers/definition-of-adjusted-gross-income)). So a conversion that fits within a tax bracket can still add its full taxable amount to IRMAA income. - **Tax-free interest still counts.** Municipal bond interest is added back in, even though it is not taxed federally ([Schwab](https://www.schwab.com/learn/story/how-higher-income-can-affect-medicare-premiums)). ## What could a conversion comparison look like? Take a hypothetical married couple with $140,000 of projected IRMAA income before a fully taxable $40,000 conversion in 2026. If nothing else changes, their IRMAA income becomes $180,000 ($140,000 + $40,000). This shows only the change in income. It does not calculate tax, place them in a premium tier, or show any savings. **Hypothetical, not a client result.** Assumptions as of October 15, 2026: - Married filing jointly; both spouses on Medicare by the premium year. - The whole $40,000 is pretax, with no after-tax basis in the IRA. - Tax on the conversion is paid from savings outside the IRA. - No other changes to income, deductions or how Social Security benefits are taxed. - No investment returns, premium amounts or future thresholds are modeled. We deliberately do not compare this example to an IRMAA threshold. The figures that will apply to 2028 premiums are not yet published, and today's figures are for 2026 premiums only. A real comparison would test several amounts, including no conversion, against the official numbers once they are available. ## What should you ask before choosing a conversion amount? Ask for a side-by-side comparison of no conversion and a few conversion amounts. It should state its assumptions about household income, how the tax will be paid, and which Medicare premium year is affected. Then check what changes if your income estimate is off. The goal is an informed decision, not a promise that converting more, less or nothing will turn out better. Useful questions: - How much does each option add to this year's tax, in dollars? - Which premium year could each option affect, and what income does it assume? - Where will the money to pay the tax come from? - How does the plan change if a bonus, capital gain or required minimum distribution raises income? - Has my tax preparer reviewed the income figures? To prepare, gather recent account statements, last year's tax return, an estimate of this year's income, and any current Medicare premium notices. We coordinate with your tax preparer. We do not prepare tax returns. For background on how taxes shape retirement income, see [understanding the impact of taxes on your retirement](/insights/understanding-the-impact-of-taxes-on-your-retirement). ## Why discuss this during Medicare open enrollment? Medicare open enrollment runs October 15 through December 7, and changes take effect January 1 of the next year ([Medicare.gov](https://www.medicare.gov/health-drug-plans/open-enrollment)). That makes fall a good time to review healthcare costs and retirement income together. It is not a special Roth conversion deadline, and choosing a health plan is a separate decision from converting IRA money. For 2026, that means changes made by December 7, 2026 take effect January 1, 2027. If you are still working while on Medicare, our article on [how working in retirement affects Medicare and Social Security](/insights/how-can-working-in-retirement-impact-medicare-and-social-security-benefits) covers related questions. ## How we can help Personal financial planning, including retirement income questions like this one, is included in our investment management fee. For clients with assets under management under $500,000, the Advisor reserves the right to charge an hourly fee for financial planning. Integrity Financial Planning is a fee-only fiduciary in Houston, paid by clients rather than commissions. See [our fees](/fees). If you are nearing retirement with substantial IRA savings, ask whether a conversion recommendation accounts for Medicare premiums as well as income tax. We are glad to talk through whether our approach fits your needs. [Schedule an introductory meeting](/schedule) with Todd Smurl, CFA. We work with [retirees and pre-retirees](/who-we-serve/retirees-and-pre-retirees) in Houston and across the country. *This article is for educational purposes only and is not individualized investment, tax, or legal advice. Decisions should reflect your circumstances and be reviewed with your tax and other professional advisers. Investing involves risk, including possible loss of principal. The hypothetical illustration is not a client result and does not predict taxes, Medicare premiums, or investment outcomes. Medicare and tax rules can change.* ## Frequently asked questions ### Will a Roth conversion always raise my Medicare premiums? No. The effect depends on the taxable amount converted, your other income, which tax return Social Security uses, and the premium rules in effect for that year. The useful question is how a proposed conversion changes your household's projected income. Do not assume every conversion triggers IRMAA, or that the same dollar amount affects every household the same way. ### Can I undo a Roth conversion if I don't like the result? No. Under rules in effect since January 1, 2018, a conversion from a traditional IRA, SEP or SIMPLE IRA to a Roth IRA cannot be recharacterized back to a traditional IRA, according to the IRS. That is different from correcting certain regular IRA contributions. Review the estimated consequences before you complete a conversion. ### Does municipal bond interest count for IRMAA? It can. Social Security's income measure for IRMAA is your adjusted gross income plus tax-exempt interest income. A household that looks only at taxable income could miss part of the calculation. Ask your tax preparer to confirm the relevant figures from your return before treating a conversion amount as safely below any premium threshold. ### Do I need the exact future premium brackets before I start? No. You can start by gathering income estimates and comparing conversion amounts. Under the usual two-year lookback, 2026 income could affect 2028 premiums, and those future thresholds are not published yet. Keep future figures separate from current ones, and update the comparison when the official amounts are released. ### Is retirement planning included in Integrity Financial Planning's fee? Yes. Personal financial planning, including retirement income questions like this one, is included in our investment management fee. For clients with assets under management under $500,000, the Advisor reserves the right to charge an hourly fee for financial planning. See [our fees](/fees) for details.