Most people think Roth conversions are a smart tax move, and they are until you realize they can add thousands of dollars per year to your Medicare premium. That's why today we're going to talk about how a well-intentioned tax strategy may backfire on you if you're not careful about how you're implementing it. To illustrate this, I'm going to take you right to a case study that shows how Medicare premiums went from $0 per year of excess premiums all the way up to over $5,200 per year of extra premiums

unintentionally. Someone thinking they were implementing the right tax strategy, but in doing this,

it ended up cost them thousands of dollars per year and tens of thousands of dollars over the

course of their retirement. Now, this might seem fairly complex, but I'm going to break it down

for you in a very simple way to understand. So as you start implementing your Roth conversion strategies, you can get the benefits both of ordinary income tax brackets, as well as being mindful of EURMA surcharges that could cost you thousands of dollars per year. So let's take a look at this worksheet here. This shows you important numbers to know for 2025. These numbers will be adjusted up for 2026. But the important thing to understand is this. Most people, when they're looking

at doing Roth conversions, are only focused on these numbers right here. They're looking at

federal ordinary income tax brackets. And what you can see here is those tax brackets range

from 10% all the way to 37% and the highest. Typically, the strategy is how do we fill up those lower tax brackets range from 10% all the way up to 37% and the highest. Typically,

the strategy is how do we fill up those lower tax brackets, maybe 10, 12, even 22% to avoid paying

taxes at a later date at 24% or higher. Now, if all you're doing is this, you're missing a big

part of the picture. Because what I want to call your attention to now is this. What you can see

here is this is what your EURMA surcharges or your Medicare premium surcharges are based upon.

If you are married finally and jointly, you can see here's what your modified adjusted gross

income needs to be in order to have these surcharges. So Medicare Part B and Part D, there's no

additional surcharge if your income,

your modified adjusted gross income, I'm going to explain why that's so important in the second,

is $212,000 or less. Or if you're single, if it's $106,000 or less, your Part B and Part D premiums,

you do not have any extra surcharge. However, as soon as you cross even

$1 over this threshold, your new monthly surcharge for Part B is $74, and part D is $13.70.

So those are combined amounts that every single month you will pay for the year in which your income was about that amount.

Now, here's the detail that gets people tripped up. And if you know this, it could be the difference

between tens of thousands of dollars saved for a very simple understanding of how this works.

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