Most Roth conversion decisions happen in November or December. The retiree opens the year-end statement, sees taxable income tracking lower than expected, calls the advisor, and asks whether there is “room to convert a little.” The advisor pulls up the brackets, runs a quick check against the IRMAA tiers, and provides a number. The conversion is executed. The retiree feels good. Then sometime in February, the actual 1099-Rs and 1099-DIVs arrive, the numbers come in higher than projected, and the conversion that looked clean in December turns out to have nudged the household into a higher bracket or across an IRMAA threshold — with the surcharge consequence arriving on Medicare premiums two years later. It happens often enough that the November conversion has become a small annual ritual of last-minute math under conditions that do not really support last-minute math.
The cleaner window for sizing Roth conversions is earlier. May through October is when Q1 income has settled, year-end RMD and IRMAA implications are visible, and there is still runway to execute a conversion deliberately before the year closes. The math is the same. The visibility is dramatically better.
Why Mid-Year Visibility Matters
Roth conversion sizing is a sequencing problem, not a yes-or-no question. The retiree is trying to recognize taxable income at a rate that is favorable now in exchange for tax-free withdrawals later — without crossing the bracket, IRMAA tier, or phase-out threshold that would erase the advantage. To do that well requires knowing where current-year income is likely to land, and current-year income depends on a handful of inputs that become visible at different points in the year.
By April or May, the prior-year tax return is filed and the actual MAGI from two years prior — the figure that drives the current year’s IRMAA premiums — is known with certainty. By the end of Q1, the current year’s pension income, Social Security gross benefits, RMD distributions if they have begun, and investment income are at least partially visible. Capital gains distributions are not yet final, but Q1 fund-company estimates give a usable range. By mid-year, the household has a real picture of where MAGI is likely to land — not the guess that drives the November conversion, but a projection grounded in five months of actual data.
That visibility changes the calculation. A retiree who would have been afraid to convert $80,000 in November can confirm in June that the household’s actual MAGI runway to the next IRMAA tier is $42,000 — and execute a conversion that uses 85% of the available headroom without crossing the threshold. The retiree who would have over-converted in November now under-converts in June, deliberately, with confidence in the number.
The Four Thresholds That Actually Matter
Conversion sizing is rarely a single-variable problem. The conversion amount has to be modeled against several interacting thresholds simultaneously, because crossing any one of them can change the math materially. The four that drive most retirement-year conversion decisions:
The ordinary-income bracket boundaries. A conversion that pushes the last few thousand dollars from the 22% bracket into the 24% bracket creates a real but limited drag — the additional tax is 2% on the portion in the higher bracket, not on the whole conversion. A conversion that pushes from the 24% bracket into the 32% bracket is a much larger jump and warrants more caution. The brackets themselves are wide; the harm comes from crossing them by a meaningful amount.
The IRMAA bracket thresholds. Unlike the ordinary-income brackets, IRMAA tiers operate as cliffs. Crossing a tier by even one dollar moves the entire Part B and Part D premium calculation into the higher tier — for the full year, two years after the income event. The lowest 2026 IRMAA threshold is $109,000 MAGI for single filers and $218,000 MAGI for married filing jointly; the highest tier begins at $500,000 single / $750,000 MFJ. A conversion that pushes a household across a tier can add several hundred dollars per month in premiums two years later, which can easily exceed the tax savings the conversion was designed to capture.
The Social Security taxation thresholds. For retirees not yet at the full taxation point, a conversion that raises provisional income can shift the percentage of Social Security benefits included in taxable income from 0% to 50%, or from 50% to 85%. The thresholds are not indexed for inflation and have not changed in decades; a household just below them in May can be just above them in December if a conversion is mis-sized.
The OBBBA Senior Deduction phase-out. New for tax years 2025 through 2028, the OBBBA Senior Deduction provides up to $6,000 per qualifying individual age 65 or older. It phases out for MAGI above $75,000 for single filers and $150,000 for married filing jointly. A conversion that pushes MAGI above these phase-out points can reduce or eliminate the deduction, raising the effective cost of the conversion. The phase-out is gradual rather than a cliff, but it represents real money for qualifying households — up to $2,220 in federal tax savings for a married couple at the top of the 22% bracket.
“Roth conversion sizing is a sequencing problem, not a yes-or-no question. The right amount depends on which thresholds matter most for this household, in this year, with this year’s actual numbers — not last year’s estimate.”
What the OBBBA Senior Deduction Did to the Math
Before OBBBA, the structural case for Roth conversion through the post-retirement, pre-RMD window was largely about the eventual TCJA sunset — the assumption that brackets would revert to higher pre-2018 levels in 2026 and beyond. OBBBA made the TCJA individual rates permanent, which removed the “convert before rates rise” urgency from the calculation. The structural case for Roth conversion did not disappear — the Tax Kraken™ still grows in tax-deferred accounts, RMDs still arrive on the government’s schedule, and Roth dollars still operate outside the IRMAA and Social Security taxation calculations that drag on retirees with large pre-tax balances. But the case is now structural rather than urgent.
The Senior Deduction added a new variable. For households where one or both spouses are 65 or older and current-year MAGI sits below the phase-out thresholds, the deduction is up to $6,000 per qualifying person, on top of the standard deduction. A conversion that pushes MAGI into the phase-out range can reduce that deduction, raising the effective tax cost of the conversion by potentially $1,000 to $2,200 depending on bracket and filing status. For qualifying households, this is a new threshold to model. For non-qualifying households, it does not change the math.
What the Mid-Year Modeling Actually Looks Like
The mid-year modeling exercise is not particularly complicated. The retiree (or, more often, the advisor) projects current-year MAGI based on five months of actual data plus a reasonable estimate of the remaining seven months. The projection is compared against the relevant thresholds for the household — the next ordinary-income bracket boundary, the next IRMAA tier, the Senior Deduction phase-out point, and the Social Security taxation threshold if applicable. The gap between projected MAGI and the most relevant threshold is the conversion headroom. The household decides how much of that headroom to use, depending on its bucket mix, future RMD exposure, and risk tolerance.
The actual conversion is executed before year-end, in an amount that is more or less the size the headroom analysis supports. A reasonable practice is to convert in two tranches — one in late summer based on the mid-year projection, and a second smaller adjustment in late November once the picture has tightened further. The November conversion is then a true-up, not the first attempt at the math.
What to Do This Month
If You’re Considering a Roth Conversion This Year
- Pull your prior-year MAGI and your 2026 projection. Prior-year MAGI is the 2024 figure that determines your 2026 IRMAA premiums. Your 2026 projection determines your 2028 IRMAA premiums. Both matter and they are not the same number.
- Identify which threshold is most binding for your household. For some households it is the next ordinary-income bracket. For others it is the next IRMAA tier. For households where one or both spouses are 65+, the Senior Deduction phase-out adds a new layer. The most relevant threshold determines the headroom.
- Build a projection grounded in five months of actual data, not last year’s estimate. Q1 numbers plus a defensible estimate for the rest of the year is materially more accurate than a year-ago projection. The conversion size that emerges from a mid-year model is generally more durable than a November model.
- Consider executing in tranches. A conversion in two parts — one in summer, one in late November as a true-up — lets the household adjust as the picture tightens. It also reduces the chance of a single oversized conversion crossing a threshold the household did not anticipate.
- Model against state tax as well as federal. Federal-only modeling misses meaningful state tax exposure in some jurisdictions. A conversion that is right at the federal level can be wrong when state tax is added to the math.
The Principle Underneath
The Roth conversion is not, fundamentally, a product decision. It is a sequencing decision — about which dollars are recognized as taxable income in which year, and at what effective rate. Sequencing decisions made in November under deadline pressure tend to be coarser than sequencing decisions made in June with five months of actual data and runway to execute. The same conversion done at the same dollar amount can be a thoughtful structural move in June and a stress decision in late December. The dollars do not know the difference, but the household’s after-tax outcome often does.
A Roth conversion may not be suitable for every situation. The interaction with the OBBBA Senior Deduction, IRMAA thresholds, Social Security taxation, and state tax exposure should be modeled with a qualified tax professional before any conversion is initiated.
