Will a $100k Roth Conversion Raise My Medicare Premiums?

Core Insights - Converting funds from a tax-deferred retirement account to a Roth IRA can significantly increase Medicare premiums for Part B and Part D due to income bracket adjustments [2] - Strategies exist to mitigate potential premium increases, such as converting funds at least two years prior to Medicare enrollment and employing methods to lower reported income [3] Medicare Premium Structure - Most Medicare recipients pay a standard premium for Part B, which is adjusted annually based on healthcare spending projections [4] - Premiums are increased for individuals with Modified Adjusted Gross Income (MAGI) above certain thresholds, using the Income-Related Monthly Adjustment Amount (IRMAA) [4][5] MAGI and Premiums - MAGI includes total gross income, including Roth conversions, tax-exempt interest, and some non-taxable Social Security benefits, with applicable deductions added back [5] - For 2024, the standard premium for Part B is $174.70 for individuals with MAGI of $106,000 or less, with higher premiums for increased MAGI levels [6] Premium Breakdown - The breakdown of Part B premiums based on MAGI is as follows: - $106,000 or less (Single) / $212,000 or less (Joint): $185 - $106,000 to $133,000 (Single) / $212,001 to $266,000 (Joint): $259 - $133,001 to $164,000 (Single) / $266,001 to $330,000 (Joint): $364.30 - $164,001 to $500,000 (Single) / $330,001 to $750,000 (Joint): $469.60 - $500,001+ (Single) / $750,001+ (Joint): $628.90 [6] - The difference in premiums between couples earning $206,000 and $760,000 can exceed $10,000 annually per insured [6]