What is IRMAA and How Does it Affect Roth Converting? | #shorts | Christy Capital Management

IRMAA stands for the income-related monthly adjustment amount. It's a fee you pay on top of your Medicare Part B or Part D premiums if you make a yearly income above annual thresholds.

The first threshold is just above the 22% bracket. So if you do Roth conversions or anything else that causes your income to go up into the 24% bracket and you’re on Medicare, it will cause your premiums to be higher.

If you turn on Medicare at age 65, the IRS looks at your most recent tax return, which is the tax return you did when you were 63. If your modified adjusted gross income was above the limits, you’ll be required to pay extra. So for Feds, you can stick with your federal healthcare and not turn on Medicare. Or you could turn on Medicare and just Roth convert to whatever tax bracket you want and be prepared to pay the extra amount. Whenever your income goes back to normal, meaning underneath those limits, you would quit paying the IRMAA.

The information provided is not intended as tax or legal advice. Figures shown are for illustrative purposes only furthermore, the information nor the illustrations provided may not be used to avoid any tax penalties. This content represents the general views of Christy Capital Management and should not be regarded as personalized investment advice Nothing herein is intended to be a recommendation. The opinions expressed are subject to change without notice. Retirement Benefits Institute, Inc., and a portion of its contents merged with Christy Capital Management Inc. Brandon Christy, former President of Retirement Benefits Institute, is also the current President of Christy Capital Management, Inc., a registered investment adviser.