TAXES
IRMAA and Roth Conversions: What Medicare Recipients Should Understand
From the Book
Two-Comma Wealth: Investment, Tax, and Estate Strategies to Consider When Your Net Worth Exceeds a Million Dollars
By George Stefanou, CFP®, CPWA®, CEPA®
Chapter: Chapter 6: Advanced Tax Strategies for Optimizing Wealth
Section: Watch Out for IRMAA (for Medicare Recipients)
Excerpted from Two-Comma Wealth: Investment, Tax, and Estate Strategies to Consider When Your Net Worth Exceeds a Million Dollars, published April 15, 2025.
The planning principles discussed here are intended to be enduring, but tax laws, retirement rules, Medicare thresholds, estate and business laws, investment conditions, and other regulations can change over time. Any specific thresholds, limits, ages, tax brackets, or regulatory references should be understood in the context of the book’s publication date and verified against current rules before being applied. Ellipses indicate where portions of the original text have been omitted for length, relevance, or durability. This material is for educational purposes and is not individualized investment, tax, legal, insurance, Medicare, valuation, or transaction advice.
“When using strategies like Roth conversions, be mindful of IRMAA (income-related monthly adjustment amount), which applies to Medicare recipients.
[...]
In some cases, it may make sense to be aggressive with Roth conversions in the early years of retirement, even if this means temporarily landing in a higher IRMAA bracket. [...] This kind of strategy highlights the importance of sitting down with an advisor to forecast different scenarios and evaluate your options. We all have a tax tolerance, and understanding yours before implementing strategies—not two years too late—is critical to staying in control of both your tax and health-care costs.
While topping off tax brackets can still be a smart way to manage taxes, even when entering IRMAA brackets, carefully considering these factors ensures that your Roth conversion strategy aligns with your broader financial and retirement goals.”
Current rules: For current IRMAA income thresholds and Medicare Part B and prescription drug premium adjustments, see the Social Security Administration’s “Medicare Premiums — Rules for Higher-Income Beneficiaries” page.
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About George Stefanou, CFP®, CPWA®, CEPA®
George Stefanou is the author of Two-Comma Wealth and founder of Stefanou Wealth Management. A financial advisor since 2009, he helps families navigate investment strategy, retirement income, tax considerations, and estate and legacy planning. Through his writing, George helps readers make more informed decisions about preserving, using, and transferring the wealth they have worked hard to build.