Converting? Don’t Forget Medicare – Retirement Daily on TheStreet: Finance and Retirement Advice, Analysis, and More

Table of Contents By Patrick Kuster, AIFGross Income, AGI, MAGI and Taxable IncomeTaxable Income and…

By Patrick Kuster, AIF

When deciding to convert traditional IRA funds to a Roth IRA, we generally start by thinking in terms of taxes. I mean, if it wasn’t for taxes, why would we consider converting in the first place? But we don’t want to convert too much in any given year, as we don’t want to put ourselves in too high of a tax bracket or pay more taxes than we can stomach. While we may start our analysis in terms of our tax bracket or tax bill, for those currently or within two years of receiving Medicare Part B, it’s also important to understand that converting an amount that results in income even $1 over the threshold could mean thousands of dollars in increased Medicare Part B costs.