Craig Wear explains how required minimum distributions trigger higher Medicare premiums through IRMAA surcharges. Roth conversions now reduce future RMDs and avoid those premium increases later, even though conversions raise premiums temporarily.
Income Related Monthly Adjustment Amount.
Two years (a two-year look-back).
Your large required minimum distributions are going to likely push you into higher IRMAA premiums for Medicare. So that's an acronym that just is income related monthly adjustment amount, because Medicare Part B and D are income based and they look back every two years and they determine what your premiums are going to be for those based on your income. So when you're reducing your RMD through Roth conversions, it can actually help you avoid these additional charges later in your life. You're going to pay higher premiums while you're doing the converting, but the math works out so that you pay much less in total Medicare premiums over your lifetime by actually getting the conversions done sooner.
