Converting a portion of an IRA to a Roth IRA is a complex process that involves many moving parts. Unintended consequences can result if the strategy is not properly analyzed or handled, including a possible impact on Medicare premiums two years after the conversion.
This flowchart addresses common issues that you may encounter when doing a Roth conversion, including:
- Implications for IRAs with after-tax contributions
- Pro-rata and aggregation rules
- Simple IRA rules
- Medicare Part B and Part D surcharge impact
- Application of the 5-Year Rule
- RMD coordination issues
