Why a conversion can cost more than your bracket
The amount you convert is ordinary income. For most people that's taxed at their bracket rate. For retirees on Social Security, three things can stack on top:
- More of your Social Security becomes taxable. Each extra dollar of income can make 50 or 85 cents of benefits taxable, until 85% of them is. In that range, a 12% bracket can work like a 22% rate. How much of my Social Security is taxable?
- The senior deduction shrinks. For 2025 through 2028, each person 65 or older gets up to $6,000 more deduction, reduced by 6% of income above $75,000 ($150,000 joint).
- Medicare premiums can rise two years later. IRMAA uses your income from two years before. Crossing a line by $1 costs the whole tier. See the IRMAA brackets.
An example
A single retiree, 65 or older, gets $24,000 of Social Security and $30,000 from an IRA, and converts $20,000. Before the conversion, $11,300 of the benefits is taxable. After it, $20,400 is, the 85% limit. So the $20,000 conversion adds $29,100 to taxable income. Federal tax goes from $1,810 to $5,302: $3,492 more, or 17.5% of the conversion, even though the retiree stays in the 12% bracket. The calculator above starts with these numbers.
What this calculator assumes
- 2026 federal brackets, standard deduction, extra deduction for 65 and older, and the senior deduction.
- All your income is ordinary income. Qualified dividends and long-term capital gains are taxed at lower rates and can be pushed into higher ones by a conversion. That isn't modeled.
- The Medicare estimate uses the current IRMAA brackets. The brackets that apply two years from now will be adjusted for inflation, so treat it as a warning, not a bill.
- No state income tax, and no itemized deductions.
Questions
How is a Roth conversion taxed?
The amount you convert from a traditional IRA or 401(k) is added to your ordinary income for the year and taxed at your normal rates. There is no 10% penalty on a conversion itself.
Can a Roth conversion make my Social Security taxable?
Yes. The conversion raises your provisional income, so up to 85 cents of benefits can become taxable for each extra dollar, until 85% of your benefits is taxable. That can push the real tax rate on the conversion well above your bracket.
Does a Roth conversion raise Medicare premiums?
It can. Medicare's IRMAA surcharge uses your income from two years before, so a conversion this year can raise your Part B and Part D premiums two years from now if it pushes you over a bracket line.
How much should I convert?
Many people convert just enough to fill their current tax bracket without crossing the next IRMAA line. The calculator shows both limits. Whether converting is worth it depends on your future tax rate, which no calculator knows for sure.
Updated November 6, 2026. Sources: IRS Rev. Proc. 2025-32 (2026 brackets and standard deduction); IRS Publication 915; Internal Revenue Code §151(d)(5)(C) (senior deduction); CMS, 2026 Medicare Parts A & B Premiums and Deductibles. Estimates, not financial, tax or legal advice.