Could a bigger income year cost you later?
Medicare premiums aren't flat — earn too much two years before you're on Medicare, and you'll pay a surcharge called IRMAA on top of your normal premium. A large Roth conversion or a big withdrawal can trigger it without you realizing until the bill arrives.
Your Estimate
Test A Hypothetical Income Increase
The IRMAA Ladder
What This Costs You
A one-time income spike, like a single Roth conversion, usually only affects one year of Medicare premiums — IRMAA is recalculated fresh each year from that one prior year's income, so it reverts automatically once that year rolls out of the lookback window. For many people, $143/mo ($1,718/year) in extra Medicare premiums for that one year is small next to the potential lifetime tax savings of paying tax on a conversion now, at a known rate, instead of later — on a larger balance, at a rate you don't control, potentially pushed higher by RMDs and taxes on Social Security. Whether that trade-off is worth it for you depends on your own tax situation, which is exactly what a complimentary planning conversation can help you work through.
The Widow(er) IRMAA Cliff
If either of you passed away, the survivor would file as single starting the very next tax year — and this same $225,000 MAGI would land in a higher single-filer IRMAA tier. Instead of today's $95/mo, the survivor could owe $524/mo — $430/mo more ($5,156/year) — often arriving in the same year as losing a Social Security check and possibly a pension.
This assumes the same total household MAGI would carry over to the survivor's own return, which won't be exactly right for every couple — it depends on whose income (pensions, RMDs, joint investment accounts) it actually was. It's meant to show the shape of the risk, not a precise prediction for your household.
The Two-Year Lookback
Your Medicare premium this year is based on your tax return from two years ago — so a Roth conversion or large withdrawal today won't raise your premiums right away. It shows up two years later, which is exactly why it's easy to miss until the bill arrives.
Each year's IRMAA is determined independently, using only that one prior year's MAGI — it isn't a running average and it doesn't compound. So a single one-off event, like one large Roth conversion in one year, typically raises your premium for one premium year only. Once that income year rolls out of the two-year lookback window, your premium automatically reverts to whatever your other years' income supports — no appeal needed. (If your income stays elevated for multiple years, of course, the surcharge would apply each of those years too.)
Since IRMAA looks at income from two years ago, it can overcharge people whose income has since dropped. If you've had a "life-changing event" — retirement, a reduction in work hours, marriage, divorce, the death of a spouse, or the loss of a pension — you can file Form SSA-44 with Social Security to have your premium recalculated using more recent income instead.
Medicare Supplement (Medigap)
A Medigap policy pays some or all of what Original Medicare doesn't — but premiums vary widely by carrier, plan letter, and location, so enter a quote you've already received to see the full annual picture.
Plan G covers nearly everything Original Medicare doesn't — your main remaining exposure is the annual Part B deductible, paid once per year.
Medicare Advantage
Medicare Advantage plans often have low or $0 premiums, but you pay copays and coinsurance for care up to your plan's annual out-of-pocket maximum — after that, covered care is 100% paid.
Your estimated care costs stay under your plan's out-of-pocket maximum of $9,500.
Part D Drug Plan
Since 2025, Part D has a hard annual cap on what you pay out-of-pocket for covered drugs — after you hit it, your covered medications are $0 for the rest of the year.
Your estimated drug costs stay under the $2,100 annual cap.
Dental & Vision
Cleanings, glasses, contacts, and hearing aids are typically not covered by Original Medicare at all. Some Medicare Advantage plans bundle in an allowance for these, and standalone dental/vision plans are also available — enter your numbers below for a quick total.
Late Enrollment Penalties
Unlike the IRMAA surcharge above, which can change if your income changes, a late enrollment penalty is added to your premium for life once you incur it. Missing your enrollment window is one of the most costly and avoidable Medicare mistakes.
You don't owe a late enrollment penalty for delaying Part B or Part D while you (or your spouse) had creditable coverage through current employment — your own job or your spouse's, not COBRA or retiree coverage. You just need to enroll within your 8-month Special Enrollment Period after that employer coverage or the job itself ends. The estimates below assume a gap with no creditable coverage at all; if employer insurance covered you the whole time, enter 0 months for both fields.
It's tempting to plan a Roth conversion or a big withdrawal around this year's tax bracket alone. But because Medicare looks back two years, that decision can quietly raise your premiums well after the tax return is filed and forgotten. The total monthly surcharge above is the number worth checking before, not after, a large one-time income event — especially in the years leading up to and just after your Medicare enrollment.
Roth conversions, Social Security timing, and Medicare premiums are all connected. Talk it through with our team before you make a move.