Retirement Tax Mistakes: IRMAA Triggers, Roth Conversions, and Income Planning | Eligry

Most people think of retirement taxes as simple: you withdraw money, you pay taxes on it, end of story. But retirement income taxation is nothing like earning a paycheck. The rules are layered, the interactions are hidden, and small decisions — made in the wrong year, in the wrong order, or in the wrong amount — can cost you tens of thousands of dollars over a 25-year retirement.

The biggest surprise for most retirees isn’t the tax rate. It’s that the same dollar of income can trigger three separate consequences at once: federal income tax, Social Security benefit taxation, and Medicare premium surcharges (IRMAA). When those three interact, the effective marginal rate on a single withdrawal can be far higher than the bracket number suggests.

This page covers the five most expensive retirement tax mistakes I see in my Medicare practice — and how each one connects to the premiums you’ll pay for healthcare coverage.

Mistake #1: Missing the Roth Conversion Window

This is the single most valuable tax planning opportunity most retirees will ever have — and the one most often missed entirely.

What the window looks like

The years between retirement and age 70 — before Social Security kicks in and before required minimum distributions (RMDs) start at age 73 — are typically your lowest-income years. During this window, your taxable income may consist of little more than interest, dividends, or small withdrawals from taxable accounts.

That means you have unused capacity in the lower federal tax brackets. In 2026, a married couple filing jointly pays 10% on the first $24,800 of taxable income, 12% on income up to $100,800, and 22% on income up to $211,400 — all after a standard deduction of $32,200 (or $35,500 if both spouses are 65 or older, and potentially up to $48,300 with the new temporary senior deduction under the OBBBA).

A Roth conversion moves money from a traditional IRA to a Roth IRA. You pay income tax on the converted amount now, but the money grows tax-free forever afterward and is never subject to RMDs. Roth withdrawals don’t count toward IRMAA, don’t increase Social Security taxation, and don’t push you into a higher tax bracket in retirement.

What happens if you skip it

Without conversions, your traditional IRA balance keeps growing. When RMDs begin at 73, the required withdrawals are based on the full account value. A $1.2 million IRA at age 73 produces an RMD of roughly $54,000. Add that to $48,000 in Social Security benefits and suddenly you have $102,000+ in taxable income — firmly in the 22% bracket, with 85% of your Social Security benefits taxable, and possibly crossing an IRMAA threshold that adds $1,148 per person per year in Medicare surcharges.

The retiree who converted $85,000 to $100,000 per year during the gap years — paying 12% to 22% on each dollar — avoided all of that. Their RMDs are smaller, their Social Security taxation is lower, and their Medicare premiums stay at the standard rate.

Mistake #2: Triggering an IRMAA Cliff Without Realizing It

IRMAA — the Income-Related Monthly Adjustment Amount — is a surcharge on Medicare Part B and Part D premiums for higher-income beneficiaries. It operates on cliff thresholds, not gradual scales. Exceeding a threshold by even one dollar triggers the full surcharge for that tier for an entire year.

There are also Part D surcharges on top of these. And the penalties are per person — so a married couple both on Medicare can pay double.

The two-year look-back that catches people

IRMAA uses your modified adjusted gross income from two years prior. Your 2024 income determines your 2026 Medicare premiums. This means a Roth conversion, a home sale, a one-time capital gain, or even a large RMD in the wrong year can push you into a higher tier — and you won’t feel the Medicare premium increase until two years later.

The SSA-44 life-changing event appeal

If your income was high two years ago but has since dropped due to retirement, the death of a spouse, or another qualifying life-changing event, you can file Form SSA-44 with Social Security to request a reduction or elimination of IRMAA based on your current-year income. This appeal applies to specific qualifying events — not just general income reduction. If you’ve recently retired or experienced a major life change, this form is worth knowing about.

Mistake #3: Not Understanding How Social Security Is Taxed

Many retirees assume Social Security benefits are either fully taxable or fully tax-free. Neither is correct. The IRS uses a formula called “combined income” (also known as provisional income) to determine how much of your Social Security is subject to federal income tax.

Combined income = adjusted gross income + nontaxable interest + half of Social Security benefits.

These thresholds have never been adjusted for inflation since they were established in 1983 and 1993. They were originally designed to affect only high-income retirees. Today, a married couple with $30,000 in Social Security benefits and a $20,000 IRA withdrawal already has combined income of $35,000 — enough to start paying tax on their benefits.

How this interacts with everything else

Every additional dollar of traditional IRA withdrawal, RMD, or pension income doesn’t just add to your tax bill directly — it can also push more of your Social Security benefits into the taxable column. In the phase-in range between 50% and 85% taxation, the effective marginal tax rate on an additional dollar of income can reach 46% or more for someone in the 22% bracket, because the extra income triggers taxation of Social Security at the same time.

This is another reason Roth conversions done before Social Security begins are so powerful. Roth withdrawals don’t count in the combined income formula. Every dollar converted before you claim Social Security is a dollar that will never push your benefits into the 85% taxable tier.

Mistake #4: Ignoring Qualified Charitable Distributions (QCDs)

If you’re 70½ or older and make charitable donations, a qualified charitable distribution from your traditional IRA is one of the most tax-efficient strategies available — and one of the most underused.

How QCDs work

A QCD allows you to transfer up to $111,000 per person (in 2026) directly from your traditional IRA to a qualifying charity. The distribution counts toward your RMD but is excluded from your taxable income entirely. It never hits your tax return, never increases your combined income for Social Security taxation purposes, and never counts toward the IRMAA calculation.

The mistake people make

The common approach: take the RMD, pay taxes on it, then make a separate cash donation and claim the charitable deduction on Schedule A. Even if the net tax result looks similar, the QCD approach produces lower MAGI — which is what IRMAA measures and what determines Social Security taxation.

For someone near an IRMAA cliff or in the Social Security taxation phase-in range, the difference between these two approaches can be $1,000 to $3,000+ per year in avoided surcharges and taxes — on the exact same charitable intent.

Mistake #5: Not Planning for the Widow’s Tax Penalty

This is the retirement tax mistake that causes the most financial damage — and the one that’s almost never discussed until it’s too late.

What happens when a spouse dies

When one spouse dies, the surviving spouse can file jointly for that final tax year. After that, they file as a single filer. The consequences are immediate and severe:

The survivor keeps the larger of the two Social Security checks but loses the smaller one entirely. So income drops — but not by as much as the tax thresholds drop. The result is higher taxes on lower income.

What to do about it while both spouses are alive

Roth conversions done while both spouses are alive are the strongest defense against the widow’s tax penalty. Every dollar moved from a traditional IRA to a Roth is a dollar that won’t count toward MAGI, won’t trigger IRMAA, and won’t push Social Security benefits into the 85% taxable tier when the surviving spouse files as a single filer.

The higher earner’s Social Security claiming strategy also plays a direct role here. Delaying to age 70 means a larger survivor benefit — which helps offset the income loss, but also means the surviving spouse needs their other income sources to be as tax-efficient as possible to avoid the bracket compression and IRMAA exposure that comes with single-filer status.

The 2026 Tax Bracket Reference

For planning Roth conversions and managing IRMAA, here are the key 2026 federal income tax brackets:

Standard deduction (2026): $16,100 (single) / $32,200 (married filing jointly). Additional $2,050 per qualifying person age 65+ (single) or $1,650 per qualifying spouse (joint). New temporary senior deduction: $6,000 (single) / $12,000 (joint) for taxpayers 65+, phasing out at 6% of MAGI above $75,000/$150,000.

The 22% bracket boundary is the most important planning threshold for most retirees. It’s where most Roth conversion strategies target — filling through the top of the 22% bracket without crossing into 24%. And because the first IRMAA cliff sits at $109,000 (single) or $218,000 (married) of MAGI — which is above the 22% bracket boundary for most people — you can often fill the 22% bracket with conversions and still avoid IRMAA, if you plan it carefully.

Where This All Connects

Every mistake on this page has a direct connection to what you pay for healthcare in retirement. IRMAA isn’t just a tax concept — it shows up as a line item on your Medicare premium bill every month. Roth conversions aren’t just about taxes — they’re about keeping your income below the cliffs that trigger $1,000+ per year in Medicare surcharges. Social Security timing isn’t just about benefit size — it’s about how that benefit interacts with your RMDs, your tax bracket, and your Medicare premiums at 65, 70, and beyond.

I’m not a financial planner, CPA, or tax advisor. But I am the person who sees the downstream Medicare consequences of these decisions every single day. People come to me paying $545.20 per month for Part B instead of $202.90 because nobody warned them about a Roth conversion that pushed their MAGI past a cliff two years ago. Widows come to me paying IRMAA surcharges they never expected because nobody planned for the single-filer threshold drop.

The Retirement Planning Hub exists to connect these pieces — Medicare, taxes, Social Security, insurance, and income planning — into one coherent picture. Because they’re all the same conversation.

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The Medicare Supplement Underwriting Trap — Why your health at 65 determines your coverage options for life.

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IRMAA Surcharges Explained — A deeper dive into the brackets, the look-back, and the appeal process. (Coming soon)