Craig Wear, CFP, walks through Roth conversions: moving money from a traditional IRA to a Roth costs you taxes now but shrinks your future Required Minimum Distributions, which can lower Medicare premiums and taxes later. It's a calculated trade-off to manage what you owe down the road.
So a lot of people are kind of very hesitant to do the Roth conversions because they're afraid that they're going to get into that higher threshold. The problem is that if you're a good candidate for Roth conversions, I should say first, then what's going to happen is the resulting required minimum distributions from your IRAs are going to push you to those higher income brackets anyway. So having the right strategy on the front end actually serves a purpose of reducing your IRA balance over time, so that by the time you hit required minimum distribution age, the balance of those IRAs are significantly lower, and you maybe had to take some higher Medicare premiums for Part B and D for a few years while you're doing the conversions. But then you've managed that, such that now the RMDs are minimal and your premiums drop back down.
