The two-year lookback problem

Medicare's income-related surcharges use a two-year lookback. Conversions you do at 63 show up on your first Part B premium at 65.

The couple's conversion window

A married couple, both 63, with $1.5 million in traditional 401(k)s has a narrow window before RMDs start at 75.

Fill the 22% bracket now

They can convert roughly $243,000 and stay in the 22% bracket, paying about $37,000 in federal tax at a 15% blended rate.

The IRMAA ceiling binds first

The $218,000 MAGI ceiling for base Medicare premiums is tighter than the 24% tax bracket at $211,400 of taxable income.

“For this couple, the tightest constraint in 2026 is the $218,000 MAGI ceiling, which binds before the 24% bracket at $211,400 of taxable income.”

Surcharges add up fast

Cross $218,000 and the couple pays roughly $185 per month in combined Part B and Part D surcharges, close to $4,400 in the first year.

Future RMDs will be brutal

Twelve years of compounding on $1.5 million means the first RMD alone can exceed $100,000, stacked on top of Social Security.

The break-even is under 10 years

Most couples in this bracket clear a break-even inside 10 years, even after paying tax today and accepting IRMAA surcharges.

“Even so, once you model a joint return at 75 with Social Security taxed at the 85% inclusion cap, RMDs, and permanent IRMAA exposure, most couples in this bracket clear a break-even inside 10 years.”

Target two ceilings, not one

Size the 2026 conversion to keep taxable income at or below $211,400 and MAGI at or below $218,000, typically $180,000 to $200,000.

Delay Social Security to 70

Every year benefits stay off the return is another year to convert without piling on taxable Social Security, plus 8% annual delayed credits.