I found a way to solve the Medicare IRMAA surtax & Roth conversion puzzle

I think I’ve come upon an answer for my Roth conversion riddle. FYI, I have a large tax-deferred (“always taxed”) IRA. I’m 63. I’m going to be a widower maybe in my early 70s. If I still have a large IRA when this transition occurs, I am going to get hit with IRMAA and higher tax brackets for the rest of my life, then my kids will have to deal with RMDs from an Inherited IRA. I live in a no income tax State, but having a large IRA at that time would sure be a barrier to me relocating to a State with an income tax, even if I would desire to. So I really want to have my IRA gone my early 70s, when my transition might occur.

I use Flexible Retirement Planner by Random Walk Ventures. It’s freeware, Jim accepts donations. Here is a Bogleheads video on this software.

What I did was set withdrawal order to first taxable, second tax-deferred, third tax-free. Then I put in an extra Roth withdrawal program so that the tax-deferred assets are gone when I want them gone.

I watched the total tax column (one of the columns available in detailed view, then view all columns) to make sure there were no objectionably high values or jumps from year-to-year. I had to break the conversion program into two parts… before and after Social Security. I subtracted 85% of the Social Security benefit from the Roth conversion amount so I would not jump any brackets or cliffs.

Of course, I don’t have to Roth convert… I could just eat and/or convert the IRA in any given year. But the software treats it the same, it’s an IRA distribution event.

There are so many uncertainties, I am obviously going to have to re-run this every year and re-point to a new conversion target. We will have a new tax code in 2026, medical science advances, and wow, how fast will the IRA grow? That’s the biggest unknown right there.

But at least I have an actionable plan. There are many stories about people getting to RMD age, getting to widowhood, and there is zero that can be done at that point about high tax and IRMAA.

Side note - paying tax up-front did not endanger my portfolio survivability at all. The probability of success was the same. It wasn’t a bad thing to do from a lifestyle point of view, it was a wash.