Point taken.I'll quibble with this statement a little.Where in the 22% tax rate do your parents fall right now? 22% covers taxable income $94,300 to $201,050 for 2024. Roth conversions up to the top of the 22% bracket are a "no-brainer" decision.
Tax brackets are determined by taxable income (after deductions). IRMAA is determined by an MAGI (which is before deductions).
The top of the 22% tax bracket is over $230,000 MAGI. Based on current estimates for 2026 IRMAA, that will definitely trigger IRMAA at 1.4 times the standard rate.
Better to stay under the expected IRMAA limit in my opinion....unless, it is determined that going deep into the 24% bracket for 2024 and 2025 is needed to avoid a serious RMD problem later on.
In the back of my mind, I was assuming Roth conversions into the 24% rate were probably going to happen anyway (given Mom's "healthy 401k"), but your point that IRMAA tends to drive the Roth conversion bus after age 63 is a good one.
Somebody should make a gif that shows the Somali pirate from "Captain Phillips" saying "I am Captain now." with an "IRMAA" caption & "Roth conversions" under Tom Hanks' picture.
Statistics: Posted by Navillus1968 — Thu Feb 29, 2024 5:00 pm — Replies 13 — Views 1340