Roth conversions before open enrollment: bracket-filling without triggering IRMAA
August is the month to tighten your Roth conversion plan before Medicare open enrollment and the year-end rush. Markets, dividends, and freelance income can all shift your Modified Adjusted Gross Income (MAGI) during the year. A proactive review now lets you fill the right tax bracket to the dollar, avoid unwanted Medicare surcharges, and set up a clean October to December top-up.
At Formula Wealth, we use aRothmetic to pinpoint low-income valleys, coordinate Social Security timing and capital gains, and sequence partial conversions so you have room to adjust. The goal is simple but powerful: convert enough in 2026 to reduce lifetime taxes without crossing avoidable cliffs today.
Below is a practical playbook you can use now, plus answers to the most common questions we hear.
Why late summer matters
Open enrollment starts in October. By then, your pay, distributions, and most dividends are visible, and you still have time to act. Running aRothmetic scenarios in August gives you:
A precise bracket target based on year-to-date data and projected deductions
An IRMAA check using Medicare’s two-year lookback
A plan to coordinate any fall capital gains and charitable moves without blowing past your thresholds
We typically set a conversion range for the year in January to March, execute partial tranches April to September, then finalize the top-up in October to early December once the numbers are clearer.
How aRothmetic fills brackets, not guesses
aRothmetic models multi-year taxes to find valleys when your taxable income is naturally lower, such as the gap between retirement and Required Minimum Distributions (RMDs) or the period before filing for Social Security. It then:
Chooses a primary bracket target (for example, the top of the 24 percent bracket) and fills to a specific dollar amount
Incorporates MAGI drivers like conversions, capital gains, IRA withdrawals, and Social Security
Tests future RMD pressure and widow or widower tax brackets so you are not deferring a bigger problem
Flags IRMAA exposure and evaluates whether a small reduction in conversion size can preserve a lower Medicare premium tier
Choosing and sticking to a canonical bracket target keeps language, expectations, and execution consistent across meetings.
IRMAA tiers at a glance and how to stay below them
Medicare’s Income-Related Monthly Adjustment Amount (IRMAA) is based on MAGI from two years prior. Crossing a tier adds a monthly surcharge to Medicare Part B and Part D. Thresholds are cliffs, not slopes, so even a small overage can trigger a full-year surcharge.
Visualize your IRMAA tiers as shelves. Your objective is to stand comfortably on one shelf, not teeter on the edge. aRothmetic overlays your projected MAGI on these shelves, then right-sizes conversions and any capital gains. We also leave a safety buffer for late-year dividends or realized gains so you do not clip a threshold by accident.
If your income has dropped because of a qualifying life-changing event, you can request an IRMAA reduction using Social Security Form SSA-44. Common qualifying events include work stoppage or reduction, marriage or divorce, death of a spouse, or loss of certain income-producing property. You will need documentation and an estimate of current-year income. Appeals are most effective when the income change is clear and ongoing.
Tranches April to September, then a clean fall top-up
You do not need to convert all at once. Tranche-based execution gives flexibility and reduces regret:
Spring and summer: Convert partial amounts in April to September while monitoring income drift and market levels. This creates room to pause if income surprises show up or markets spike.
October to early December: Recalculate with updated 1099 projections and year-to-date gains, then top up to the exact dollar of your chosen bracket or IRMAA shelf.
Late December: Final check and confirmations.
This cadence also aligns with Medicare and open enrollment decisions, tax withholding choices, and charitable planning.
Coordinating Social Security and capital gains
Delaying Social Security often creates a low-income valley that can be filled with Roth conversions at favorable rates. aRothmetic compares the tax cost of converting today with the future impact of larger RMDs and higher benefits. We also coordinate capital gains:
If you plan to harvest gains, we model them alongside conversions so total MAGI stays under your chosen IRMAA tier.
For charitably inclined clients age 70½ and older, Qualified Charitable Distributions (QCDs) can reduce Adjusted Gross Income (AGI) and help manage RMDs, freeing conversion room.
Portfolio support: location, rebalancing, and liquidity for taxes
Investment management should quietly enable tax moves, not fight them. Three levers matter:
Asset location: Prefer higher-expected-return and tax-inefficient assets in Roth for tax-free growth, while placing income-heavy holdings in pre-tax accounts and tax-efficient index funds in taxable accounts.
Rebalancing: Use conversions as natural rebalancing points. When moving assets from traditional to Roth, rebalance to target risk so your allocation stays intact.
Liquidity for taxes: Hold a cash or short-term buffer in taxable accounts to pay the conversion tax without selling Roth assets or tilting your risk.
Our investment management services integrate these steps with your tax plan so conversions fit your long-term allocation.
Is a Roth conversion worth it in your late 50s or 60s?
Often, yes, if you can fill a lower bracket now than you expect later, or if you want to reduce future RMDs and build a tax-free bucket for flexible withdrawals and heirs. It can also help manage future widow or widower brackets. But it depends on your projected income path, state taxes, charitable plans, and IRMAA exposure. A multi-year tax map brings clarity before you act. For background on mechanics and timing, see our guide to an IRA Roth conversion.
SSA-44 basics for IRMAA appeals
SSA-44 is used when a qualifying life-changing event reduces your income relative to the two-year lookback. Key points:
Qualifying events include work stoppage or reduction, marriage, divorce, death of a spouse, and loss of certain pensions or property.
Provide documentation and a reasonable estimate of current-year MAGI.
Appeals are event-driven; voluntary actions like discretionary Roth conversions typically do not qualify.
If your circumstance fits, an appeal can lower the surcharge prospectively once approved.
Quick FAQ
Are Roth conversions worth it in my late 50s or 60s? They can be, especially during low-income valleys before RMDs or before starting Social Security. Model multiple years to confirm the bracket you are filling is lower than your future bracket.
How do I avoid crossing IRMAA thresholds when converting? Track MAGI year-to-date, model the two-year lookback, include dividends and gains, and leave a buffer under your chosen tier. Use tranches and finalize in October to early December.
Should I convert in one lump or in tranches? Tranches from April to September, then a precise fall top-up, provide control and reduce the risk of overshooting a bracket or IRMAA tier.
How do investment location and rebalancing support conversions? Place growth-oriented assets in Roth, maintain target risk with timely rebalancing, and keep taxable liquidity for taxes so you are not forced to sell at the wrong time.
When do SSA-44 appeals make sense? When a qualifying life-changing event reduces income compared to the two-year lookback. Discretionary conversions do not qualify.
Put it together with a multi-year map
The best outcomes come from planning across several tax years. aRothmetic builds your multi-year tax map, tests different Social Security start dates, simulates RMDs, and coordinates conversions with capital gains, QCDs, and IRMAA shelves. If you want help translating strategy into action, consider working with a fiduciary financial advisor.
Next step
Request a multi-year tax map and a personalized conversion range tailored to your IRMAA tier and bracket target. We will review your year-to-date income, project MAGI, set tranche sizes for August and September, and prepare a clean October to December top-up so you head into open enrollment with confidence.
