The IRMAA two-year lookback, explained

IRMAA — the Income-Related Monthly Adjustment Amount — is the surcharge Medicare adds to your Part B and Part D premiums once your income crosses certain tiers. For someone planning a Roth conversion, it's usually the binding cliff. And it behaves in a way that trips up almost everyone: it works on a two-year delay.

The rule in one sentence

Your Medicare Part B and Part D premiums in year N are determined by your modified adjusted gross income (MAGI) in year N − 2.

So the conversion you do this year doesn't touch this year's Medicare bill, and it doesn't touch next year's either. It shows up two years later. A conversion in 2026 raises your premiums in 2028. This is why the calendar year you're looking at and the year the bill lands are never the same, and why "I'll just watch my income the year I'm on Medicare" is the wrong plan.

Why IRMAA is a cliff, not a slope

Federal income tax is a slope: cross into the next bracket and only the new dollars are taxed at the higher rate. IRMAA is a cliff. Each tier adds a fixed dollar amount to your monthly premium for the whole year, per person on Medicare. Go one dollar over a tier threshold and the entire surcharge for that tier applies — there's no gradual phase-in. That's what makes IRMAA the scariest line on a conversion worksheet: a trivial overage can cost hundreds to thousands of dollars for the year, and for a married couple both on Medicare, the surcharge applies to each spouse.

The tier thresholds and the surcharge amounts inflation-adjust every year and are announced by CMS each fall (typically October or November) for the following year. Any calculator that hardcodes last year's tiers will be wrong within twelve months — which is exactly why this tool sources current figures and flags the tax year in use. Always confirm the current tiers at Medicare.gov before acting.

The ages that matter most: 63 to 65

Because of the two-year lookback, the income that sets your first Medicare premium at age 65 is your income at age 63. So if you're doing Roth conversions in the run-up to Medicare, the conversions that count toward your age-65 IRMAA are the ones you do at 63 and 64 — before you're even enrolled.

This flips the usual planning instinct. Many people assume they can convert freely until they start Medicare and then "be careful." In fact the careful window opens two years earlier. If you're 63 and mapping conversions, model the IRMAA consequence of this year's income against your age-65 premium, not against a premium you're not paying yet.

What if my income drops after a one-time conversion?

IRMAA looks back at a specific tax year, so a single large conversion can create a one-year IRMAA spike two years later even if your income returns to normal. If the higher income was caused by a life-changing event on Medicare's list (for example, work stoppage or the loss of a spouse — a Roth conversion by itself is not on that list), you can ask the Social Security Administration to reconsider using Form SSA-44. A voluntary conversion generally won't qualify for relief, which is one more reason to plan the amount rather than appeal the surcharge.

How this fits into the conversion decision

For most retirees and pre-retirees, IRMAA is the lowest cliff in reach — meaning it binds before the next tax bracket does. The practical move is to find the largest conversion that stays under the next IRMAA tier (with a cushion so a small estimate error doesn't push you over), and only exceed it deliberately when the long-run tax savings clearly outweigh a year or two of surcharge. Our sibling site medicaresurcharge.com covers the IRMAA tiers in more depth.

Educational only, not tax or investment advice. IRMAA tiers change annually — verify against current CMS guidance. See our disclaimer.