📰 Why this matters right now

Every fall I have some version of the same conversation: should I convert some of my IRA to a Roth before the year ends? Most people assume this is purely a tax bracket question. It isn’t. There’s a Medicare wrinkle buried in the timing that catches even financially sharp people off guard — a two-year lookback that can cost real money if nobody’s watching for it.

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😟 Where this usually shows up

Take someone like Beverly — 67, recently divorced, decades of disciplined saving behind her. She’s got a traditional IRA, a brokerage account, a small Roth, a rental property, and a pension. By most measures, she’s done everything right.

But two things are working against her quietly, in the background. Her traditional IRA is large enough that future RMDs will push her into a bracket she’s never lived in — not even during her working years. And her beneficiary forms still haven’t been updated since the divorce.

None of this is visible yet. It shows up later, all at once, when the RMDs start and Medicare premiums climb right alongside them.

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📖 Why when you convert matters as much as whether you do

Quick definition first: a Roth conversion moves money from a pre-tax account into a Roth IRA. You pay ordinary income tax on the amount converted, now, in exchange for tax-free growth and tax-free withdrawals later — and no RMDs on the Roth itself.

The real question was never whether to convert. It’s which years to do it in.

Two things make that timing matter more than people expect:

The IRMAA lookback. Medicare premiums for Part B and Part D get adjusted upward for higher earners — that’s IRMAA, the Income-Related Monthly Adjustment Amount. Here’s the part that trips people up: it’s based on your tax return from two years prior. Convert too much at 63, and you’ll feel it in your Medicare premium at 65. It’s also a cliff, not a slope. Go a dollar over a threshold and the higher tier applies to the whole amount, not just the overage.

RMDs don’t ask permission. Once you hit RMD age, the IRS sets the distribution schedule — not you. And you can’t convert in the same year you’re taking that year’s RMD. So every year before RMDs kick in is a year you’re actually in control of your taxable income. Every year after, you’re not.

That’s really the whole strategy in one sentence: the stretch between retirement and RMD age — ideally before Medicare enrollment locks in that lookback — is usually the best shot most people get at controlling this.

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🔍 What actually turns up when you run the numbers

Run a multi-year projection on a situation like Beverly’s and a few things tend to surface that a single tax return would never show:

Left alone, her IRA generates RMDs well beyond what her actual spending requires — forced income she didn’t ask for and can’t turn down. She also has several genuinely low-income years before Social Security and RMDs begin, which is exactly the gap window where conversions cost less. Her rental property adds a wrinkle too: a year with a big repair bill or a vacancy often ends up being a better conversion year, since the deductions temporarily pull her income down. And separately — not a tax issue, just a real risk — her ex-husband is still listed as beneficiary on more than one account.

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🛠️ The tips I find myself repeating

Convert before Medicare, or plan around the lookback. If Medicare at 65 is on the horizon, your biggest conversion years should probably happen well before 63. Already on Medicare? Keep future conversions small enough that you don’t trip a tier two years out.

Use the low-income years while you have them. The stretch between retirement and when Social Security and RMDs start is often the cheapest tax environment you’ll ever see in retirement. Don’t waste it.

Fill the bracket — don’t blow past it. The goal isn’t converting everything in one shot. It’s converting up to the edge of a target bracket, year after year, so you’re spreading the cost instead of taking one enormous hit.

Model IRMAA and income tax together, not separately. A conversion can look perfectly reasonable on the income tax side and still knock you into a higher Medicare tier. You have to check both.

QCDs are underused. Once you’re eligible, a Qualified Charitable Distribution sends IRA money straight to charity and counts toward your RMD — without ever touching your taxable income. If you’re charitably inclined, this is close to a free lunch.

Fix the beneficiary forms now. This one has nothing to do with tax strategy and everything to do with risk. It’s usually the cheapest, fastest fix in the entire plan — so there’s no reason to let it sit.

Think about who inherits this, not just who owns it. Most non-spouse heirs now have to empty an inherited IRA within 10 years — often while they’re at the peak of their own careers, in their own highest bracket. Paying the tax now, at your rate, is often cheaper than handing that bill to your kids later at theirs. And if a trust is in the picture as beneficiary, it has to be built correctly, or it can actually accelerate the payout timeline instead of protecting it.

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✅ What actually changes with a plan like this

Instead of one massive, reactive tax bill showing up whenever the RMDs land, the cost gets spread across several years you actually chose — timed around Medicare, rental income swings, and bracket lines. RMDs come in smaller. IRMAA gets avoided instead of absorbed. And the accounts finally go where they were supposed to go all along.

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These stories are based on real-life scenarios. Names and details have been changed. This content is for educational purposes only and does not constitute financial, tax, or legal advice.

If you’ve recently found yourself as the sole decision-maker for a financial life you didn’t build, whether through loss, divorce, or simply circumstance, you don’t have to sort it out alone. I’d welcome a conversation. You can reach me directly at Randa@RadiantWealthPlanning.com.

These stories are based on real-life scenarios. Names and details have been changed. This content is for educational purposes only and does not constitute financial, tax, or legal advice.