A worked example: the same conversion, two different sizes

This example is entirely hypothetical. The couple, the amounts, and the income figures are invented for illustration only. This is not a client story, not a real household, and not a result anyone achieved. It uses 2026 federal tax brackets and the 2026 Medicare premium table, both cited at the end of this section, so you can see exactly where the numbers come from.

Picture a married couple, both 73, filing jointly. Between Social Security, pensions, investment income, and their required minimum distributions, their modified adjusted gross income is $165,000 before any conversion. After the standard deduction, their taxable income is roughly $133,000. They are considering converting part of their traditional IRA to a Roth IRA.

Option one: a conversion sized to the bracket. They convert $50,000. Their taxable income rises to about $183,000, still inside the 22 percent bracket, which for joint filers in 2026 runs up to $211,400. The whole conversion is taxed at 22 percent, a federal tax bill of about $11,000 on the converted amount. Their modified adjusted gross income rises to $215,000, which stays under $218,000, the first Medicare IRMAA threshold for joint filers. Two years later, their Medicare premiums stay at the standard rate.

Option two: one oversized conversion. They convert $150,000 in a single year instead. Their taxable income rises to about $283,000. The slice of the conversion that lands above $211,400, roughly $71,000 of it, is taxed at 24 percent instead of 22 percent. That bracket creep alone adds roughly $1,400 of extra tax compared with taxing the whole amount at 22 percent, on top of a much larger bill due all at once. The quieter cost arrives later. Their modified adjusted gross income of $315,000 lands in the second IRMAA tier for joint filers, the band from $274,001 to $342,000 in the 2026 table. When Medicare looks back two years, each spouse’s monthly Part B premium is $405.80 instead of the standard $202.90. That is an extra $202.90 per person per month, about $4,870 over a year for the couple, plus an added surcharge on any Part D drug plan premium. One December decision, one premium bill two years later.

The alternative hiding in plain sight: converting the same $150,000 over three years, at $50,000 a year, could keep each year’s conversion inside the 22 percent bracket and under the first IRMAA threshold, assuming their other income stays similar. Nothing about the strategy changed. Only the sizing did.

Two cautions before anyone runs these numbers at home. First, the tax brackets and IRMAA thresholds are adjusted over time, and the year your own premium bill arrives will use that year’s table, not the 2026 table shown here. Second, this example ignores state taxes and every other individual detail. It shows the shape of the trade-off, not your answer.

References for this section

• The amount converted from a traditional IRA to a Roth IRA is included in gross income in the year of the conversion, to the extent it would have been taxable as a distribution. See Internal Revenue Service, Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs), and IRS Topic No. 309, Roth IRA Contributions: https://www.irs.gov/taxtopics/tc309
• Required minimum distributions from traditional IRAs begin at age 73 for individuals born in 1951 through 1959, and at age 75 for those born in 1960 or later, under the SECURE 2.0 Act. Roth IRAs are not subject to required minimum distributions during the original owner’s lifetime. See Internal Revenue Service, Retirement Topics: Required Minimum Distributions (RMDs): https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-required-minimum-distributions-rmds and IRS Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs): https://www.irs.gov/publications/p590b
• 2026 federal income tax brackets, married filing jointly: the 22 percent bracket covers taxable income from $100,800 to $211,400, and the 24 percent bracket covers $211,400 to $403,550. Internal Revenue Service, Rev. Proc. 2025-32 (tax year 2026 inflation adjustments).
• 2026 Medicare Part B premiums and IRMAA tiers: the standard monthly Part B premium is $202.90. For joint filers, the first surcharge tier begins above $218,000 of modified adjusted gross income, and the second tier, $274,001 to $342,000, carries a total monthly Part B premium of $405.80. Premiums are based on modified adjusted gross income from two years earlier. Centers for Medicare & Medicaid Services, “2026 Medicare Parts A & B Premiums and Deductibles,” fact sheet, November 14, 2025: https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles

Educational information, not individualized advice.