Short video by Craig Wear, CFP® warning that doing repeated partial Roth IRA conversions can be costly: they incur recurring tax costs each year and can raise modified adjusted gross income enough to increase Medicare premiums long-term. The speaker argues small, annual conversions may fail to achieve conversion goals while producing higher lifetime costs.
Doing these partial smaller conversions typically leads you to really just simply having that extra tax cost every year, but not really accomplishing what you're trying to accomplish. The other big one, the second and the final kind of negative of doing these partial Roth conversions is you're going to potentially have higher Medicare premiums for a long, long time. So when you convert too little of your IRA balance, it actually could push your modified adjusted gross income into some of these thresholds each and every year so that you always have Medicare premiums than if you'd have been more aggressive. Now, I know a lot of people watch those, but some people are unaware that that's a big deal. But doing the small conversions every year can actually just cost you more money for the rest of your lifetime.
