Are you doing Roth conversions without checking this first? If you're not factoring in Medicare surcharges (IRMAA), you could accidentally be paying more for Medicare without even finding out until two years later.

In this episode, Michael Custer CFP®, EA breaks down one of the hidden cost of "blind" Roth conversions he sees often. Why could converting too much trigger an Medicare surcharge even if your taxable income looks fine?

𝐖𝐡𝐚𝐭 𝐘𝐨𝐮'𝐥𝐥 𝐋𝐞𝐚𝐫𝐧!

💭 Why taxable income and Medicare's MAGI are two different things

💭 The "large party surcharge" — a metaphor that may make IRMAA click easier

💭 How the cliff rule works

💭 What income sources get counted toward MAGI that most people overlook.

💭 Why the two-year lookback makes Medicare surcharges easy to miss

💭 Real examples of Roth conversions gone wrong — and what a different approach may look like

💭 When hitting IRMAA might actually be worth it and when you may want to avoid it

𝐖𝐡𝐨 𝐓𝐡𝐢𝐬 𝐈𝐬 𝐅𝐨𝐫.

💭 Pre-retirees with significant IRA or 401(k) balances thinking about Roth conversions

💭 Anyone who has heard about the "tax bomb" and is wondering how aggressively to convert

💭 Retirees already on Medicare who want to understand why their premiums might be higher

𝐂𝐨𝐦𝐢𝐧𝐠 𝐔𝐩 𝐍𝐞𝐱𝐭!

💭 Part 2 episode — Michael will pull up software and walk through the actual dollar amounts so you can see what this looks like in a real retirement plan.

We hope this helps you learn ideas that could meaningfully improve your retirement plan!

Chapters:

00:00 Hidden Cost to Medicare

02:03 Large Party Surcharge

03:10 The Standard Playbook

04:06 Income Level for Medicare

06:19 How the Surcharge Works

06:59 Medicare Cliff Rule

09:46 Senior Extra Deduction Loss

10:43 Don't Forget All Sources of Income!

11:43 Taxed Even Without Selling?

13:44 Too Much In One Year?

15:10 Math on Net Worth?

16:43 Make Sense to Pay IRMAA Sometimes?

17:11 More Shadow Taxes Coming?

21:46 Not a Life Long Penalty & Major Events

𝐖𝐡𝐲 𝐰𝐞'𝐫𝐞 𝐡𝐞𝐫𝐞?

We’re here to make retirement planning feel less intimidating by helping people think through their strategies and plans through clear relatable financial topics!

💬 Questions or Want to Connect?

🌐 𝐖𝐞𝐛𝐬𝐢𝐭𝐞: www.custerfinancialadvisors.com

📧 𝐄𝐦𝐚𝐢𝐥: custerfinancialadvisors@lpl.com

**#RothConversion #IRMAA #RetirementPlanning #MedicareSurcharge #TaxPlanning #RetirementTaxes #FinancialPlanning #CommonCuriosities**

Disclosures:

Harborfront Financial Group is a Registered Investment Advisor registered with the Securities and Exchange Commission (SEC). Registration as an investment adviser does not imply a certain level of skill or training, and the content of this communication has not been approved or verified by the United States Securities and Exchange Commission or by any state securities authority.

The information contained in this material is intended to provide general information about Harborfront Financial Group and its services. It is not intended to offer investment advice. Investment advice will only be given after a client engages our services by executing the appropriate investment services agreement. Information regarding investment products and services are provided solely to read about our investment philosophy and our strategies. You should not rely on any information provided on our web site in making investment decisions.

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Harborfront Financial Group, a Registered Investment Advisor. Harborfront Financial Group and Custer Financial Advisors are separate entities from LPL Financial.

This is a hypothetical example and is not representative of any specific situation. Your results will vary. The hypothetical rates of return used do not reflect the deduction of fees and charges inherent to investing. All investing involves risk including loss of principal. No strategy assures success or protects against loss.