The 5-Year Tax Window: Roth Conversions, RMDs, and Medicare IRMAA

Authored by: Jeff Judge

Most people assume retirement tax planning is something you do when you retire. The truth is, the most valuable window opens five to ten years before retirement — and once you’re in it, every income decision carries consequences that ripple into your Medicare costs.

Here’s the tension that catches clients off guard: the strategies that build tax-free income (Roth conversions) and the rules that force taxable income (RMDs) both feed into the same calculation that determines your Medicare premiums. Understanding how they interact is where real planning happens.

What IRMAA Actually Is — and Why It Surprises People

IRMAA stands for Income-Related Monthly Adjustment Amount. It’s a surcharge added to your Medicare Part B and Part D premiums if your income exceeds certain thresholds. For 2026, the standard Part B premium is $202.90 per month. Cross the first IRMAA threshold, and that jumps to $284.10. Keep climbing, and you can land at $689.90 per month — more than three times the base rate.

The mechanic that trips people up: IRMAA is based on your MAGI from two years prior. That means your 2026 Medicare premiums are calculated from your 2024 income. If you had a large Roth conversion, a capital gain event, or a higher-than-expected RMD in 2024, you’re paying for it now — and there’s little you can do about it after the fact.

According to Medicare.gov, IRMAA affects roughly 8% of Medicare beneficiaries. That number sounds small until you realize it disproportionately captures the exactly the people who saved well: business owners, executives, and diligent savers who built substantial retirement accounts.

RMDs: The Mandatory Income Problem

Required Minimum Distributions begin at age 73. The IRS requires you to withdraw a calculated percentage of your traditional IRA and 401(k) balances each year, and those withdrawals count as ordinary income. For accounts that have grown for 30+ years, RMDs can push a couple well into IRMAA territory without any other income changes.

Jeff Judge has seen this scenario play out repeatedly with clients who arrived at 73 with $1.5 million or more in pre-tax accounts. The RMDs alone — often $60,000 to $90,000 annually — can trigger IRMAA surcharges that cost $5,000 to $10,000 in additional Medicare premiums per year, per person. Multiplied over a 20-year retirement, that’s real money.

Where Roth Conversions Come In

The case for Roth conversions in the years before RMDs begin is straightforward: pay tax now at a predictable rate to shrink the pre-tax balance that will generate mandatory distributions later.

The strategy works best in the gap between retirement and age 73 — when earned income has stopped, Social Security may not yet have started, and the traditional accounts haven’t begun forcing distributions. Income can be lower in this window than at almost any other point in your financial life. Converting strategically, up to the top of a lower tax bracket, reduces future RMDs and can meaningfully lower lifetime IRMAA exposure.

The timing requires precision, though. Convert too aggressively and the conversion income itself triggers IRMAA two years later. According to IRS.gov publication resources on Roth conversion treatment, converted amounts are included in gross income in the year of conversion, which feeds directly into MAGI — and IRMAA calculations.

The Planning Framework That Works

The most effective approach treats these three variables together, not in isolation. That means modeling:

Current-year Roth conversion amounts against the next two years of projected Medicare premiums. A conversion that saves $15,000 in taxes over a decade may cost $8,000 in IRMAA surcharges if it crosses a bracket threshold.

RMD projections starting at 73 to understand what “do nothing” actually costs. Many clients are surprised to see their forced income at 75 or 78, especially in accounts that continue to grow.

Income stacking — the compounding effect of Social Security income, RMDs, investment distributions, and conversion income arriving in the same year. Each source is manageable alone; together they can push MAGI significantly higher than expected.

The five-year window before Medicare eligibility is the right time to stress-test these projections. At that point, there’s still enough time to convert meaningful amounts at favorable rates without triggering multi-year IRMAA consequences.

This kind of planning isn’t complicated — but it has to be done intentionally. Without a roadmap, the default is to let the tax code make the decisions for you.

Author Bio:

Jeff Judge, CFP®, AEP®, ChFC®, CLU® is the founder of Chesapeake Financial Planners, a fee-based financial planning firm serving professionals and pre-retirees in the Baltimore-Washington area. He writes on tax-efficient retirement strategies, income planning, and the decisions that matter most in the decade before retirement.