Roth Conversions in the Gap Years, With One Eye on IRMAA
A conversion you make this year can quietly raise your Medicare premium two years from now.

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Why the gap years matter

Here is the whole idea in one sentence: money you move to a Roth today is taxed today, and everything it earns after that is yours. The question is never whether to convert. It is what tax rate you pay to do it.

For a veteran or federal retiree who leaves before required distributions begin, there is a stretch of years when income is unusually low. Pay has stopped. Required minimum distributions have not started. Those begin at age 73 for people born between 1951 and 1959, and at 75 for those born in 1960 or later (SHARED-RMD-01). The span in between is a low-bracket window, and it does not last.

If you leave a pre-tax balance untouched, it keeps growing, and one day the required distributions arrive on top of Social Security and any pension. That can push you into a higher bracket in your late seventies than you are in today. Converting during the quiet years pulls some of that future income forward and taxes it while your rate is low.

For Thrift Savings Plan participants, this got easier in 2026. The TSP Roth in-plan conversion feature went live on January 28, 2026, so you can convert a Traditional TSP balance to Roth without leaving the plan. The minimum is $500 per conversion, the converted amount is taxable income in the year you convert, and it is irrevocable (VET-TSP-01).

The two-year echo: IRMAA

Now the part that surprises people. Medicare charges higher-income enrollees an extra amount on their Part B and Part D premiums. It is called IRMAA, the income-related monthly adjustment amount, and it does not look at this year's income. It looks back two years.

So your 2026 premium is set by your 2024 income, and a large Roth conversion you make in 2026 does not show up until your 2028 premiums (SHARED-IRMAA-01). The echo is delayed, which is exactly why it catches people. You convert in a low-income year, feel good about the tax rate, and two years later the Medicare bill ticks up.

The 2026 first surcharge tier begins at modified AGI over $109,000 for a single filer and over $218,000 married filing jointly (SHARED-IRMAA-01). Modified AGI here is your adjusted gross income plus any tax-exempt interest, and a conversion lands in that number. Cross the line by a dollar and the surcharge applies to the whole year, on top of the 2026 standard Part B premium of $202.90 per month (SHARED-MEDB-01).

The practical takeaway is not to fear conversions. It is to size them. Many retirees deliberately convert up to just under the IRMAA tier that fits their plan, then stop for the year. Whether that tier is the right ceiling for you depends on your full picture, which is a conversation for your tax professional.

Two ceilings worth knowing

Beyond IRMAA, two other lines shape how far to convert in a given year, and they sit lower than most people expect.

The first is where your ordinary tax rate steps up. In 2026 the 22% bracket begins at $50,400 of taxable income for a single filer and $100,800 married filing jointly (SHARED-FEDBRACKETS-01). Because taxable income is figured after the standard deduction, which is $16,100 single and $32,200 married filing jointly in 2026 (SHARED-STDDED-01), a couple can have meaningfully more gross income than that and still be filling the 12% bracket. Conversions that stay inside that band are cheap.

The second matters only if you also sell appreciated investments. Long-term capital gains and qualified dividends are taxed at 0% up to a taxable income of $49,450 single and $98,900 married filing jointly in 2026 (SHARED-LTCG0-01). Here is the tension: a Roth conversion is ordinary income, and it stacks under your capital gains, so a large conversion can push those gains out of the 0% zone and start taxing them at 15%. If harvesting gains at 0% is part of your plan, that competes with converting, and the two have to be sized together.

None of these three lines, the 22% bracket, the 0% gains ceiling, or the IRMAA tier, is the single right answer. They are the guardrails you steer between, and where you land inside them is a personal calculation.

What a conversion does not touch

A couple of worries come up often, and both have clean answers.

If you are collecting the FERS Special Retirement Supplement before age 62, a Roth conversion will not reduce it. The supplement is cut only by earned income above the annual limit, which is $24,480 for 2026, and only wages and self-employment count (VET-SRS-01). A conversion is not earned income, so it does not enter that test. The same logic means a conversion does not affect it the way a part-time job would.

That said, a conversion does raise your adjusted gross income, and AGI is the input to more than just IRMAA. It can influence the taxable share of Social Security and other AGI-linked items. This is precisely why the sizing is worth doing on paper, with your numbers, before you press the button.

Our Veterans retirement calculator can show you where your pension, Social Security, and TSP land against these brackets, which is a useful starting point for the conversation. It is a map, not the plan itself. The plan is what you build once you can see the whole board.