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Conversion size vs the first IRMAA threshold — how close do you cut it?

This topic has 3 replies, 3 voices, and was last updated 1 week, 5 days ago by Tom Beckett.

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September 6, 2026 at 4:46 pm #42

Tom Beckett
Participant

Planning conversions in the gap years before RMDs. The bracket math says convert more; the IRMAA cliff says stop well short. Since the surcharge is based on income from two years prior, a mistake now shows up later when it is too late to fix. How much headroom do people leave?

September 7, 2026 at 6:46 pm #43

Priya Raman, CPA/PFS
Moderator

We typically leave a few thousand dollars of headroom below the threshold, and we do the final sizing in November or December once the year’s actual income is nearly known. Capital gain distributions from funds are the usual culprit for an unexpected overshoot — they are declared late in the year and can push you over after you thought you were done. General guidance rather than advice for your return.

September 8, 2026 at 9:46 am #44

J. Mwangi
Participant

Learned this one expensively. Converted to what I thought was the exact threshold in October, then a fund threw off a distribution in December and I crossed it by under $400. Cost the full surcharge for a year.

September 9, 2026 at 2:46 am #45

Tom Beckett
Participant

That is the scenario I am trying to avoid. December sizing it is.
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