TSP Roth Conversions and the IRMAA Window Feds Miss

Last Updated: May 31, 2026 Reading Time: 8 min

There's a stretch of retirement most federal employees walk right through without realizing it's the most valuable tax window they'll ever get. You've retired, but Social Security hasn't started, your TSP isn't forcing withdrawals yet, and you're not on Medicare. Your income sits in a valley. Fill that valley with smart TSP Roth conversions and you can keep your Medicare premiums low for the rest of your life. Miss it, and a $1.2 million traditional TSP can quietly hand you an IRMAA surcharge bill every year until you die.

Key Takeaways

• IRMAA is the Medicare surcharge for higher earners. In 2026 it starts at $109,000 MAGI (single) / $218,000 (married), adding $1,148 per person per year and climbing to $6,936 at the top.
• The age 57–64 income gap, after retirement but before Social Security, RMDs, and Medicare, is the conversion sweet spot. It never reopens.
• Age 63 is the hinge. IRMAA uses a two-year lookback, so your income at 63 sets your first Medicare premiums at 65.
• A $1.2M traditional TSP left alone can force a ~$45,280 RMD at 73, pushing you into a high IRMAA tier permanently. Converting $20,000–$40,000/year during the gap can keep you under the first threshold.
• The tax on a conversion must be paid from outside the TSP. Roth TSP balances are exempt from RMDs.

What IRMAA Actually Costs

IRMAA (the Income-Related Monthly Adjustment Amount) is a surcharge stacked on top of your Medicare Part B and Part D premiums once your income crosses a line. It's not a one-time hit. It applies every year your income stays high, and the standard Part B premium it sits on top of is already $202.90/month in 2026.

Here are the 2026 single-filer tiers. Married thresholds are double.

Tier	MAGI (single)	Annual surcharge per person
Base	up to $109,000	$0
1	$109,001–$137,000	$1,148
2	$137,001–$171,000	$2,884
3	$171,001–$205,000	$4,615
4	$205,001–$499,999	$6,355
5	$500,000+	$6,936

The cruel part: it's a cliff, not a ramp. Go one dollar over $109,000 and you owe the full $1,148. For a married couple both on Medicare, every tier counts twice.

Why the 57-to-64 Gap Is the Sweet Spot

A FERS retiree's income moves through clear phases. Right after you retire at your MRA, your pension starts, the FERS Supplement may bridge you to Social Security, but you have no RMDs, no Medicare premiums, and often no Social Security yet. That's the valley.

Then it fills back up. Social Security can start at 62. Medicare and its premiums begin around 65. And at 73, your traditional TSP starts forcing required minimum distributions whether you need the money or not. A $1.2 million traditional balance throws off a first-year RMD of roughly $45,280 (the IRS divisor at 73 is 26.5). Stack that on a pension and Social Security and your MAGI can land near $199,000, which is IRMAA Tier 3, about $4,615 a year, per person, for life.

The conversions you do in the valley are taxed at 12% or 22%. The income RMDs force on you later can be taxed at 24% and trigger IRMAA on top. Same dollars, very different bill, depending on when they come out.

The Age-63 Trap

This is the detail that catches people. IRMAA uses a two-year lookback: your 2026 tax return sets your 2028 Medicare premiums. If you enroll in Part B at 65, the conversions you run at 63 and 64 are the ones that show up on your very first Medicare bills.

So the strategy has a built-in deadline. The big, aggressive conversions belong in your late 50s and very early 60s, when the lookback doesn't reach your Medicare years. By 63, you taper, sizing each conversion to stay under the IRMAA tier you're willing to live in once premiums start.

A Worked Example: $1.2M TSP, Retire at 58

Take a FERS retiree, age 58, $1.2M traditional TSP, $45,000 pension. Here's how three approaches play out over a decade of Medicare, per person.

Approach	MAGI at 73	IRMAA tier	10-year IRMAA cost
Do nothing	~$199,000	Tier 3	~$46,150
Convert $25K/yr for 7 years	~$156,000	Tier 2	~$28,840
Convert $80K/yr for 7 years	~$102,000	Tier 1 (or base)	~$11,480

The aggressive ladder costs more tax up front, during low-bracket years, and saves roughly $35,000 in Medicare surcharges over a decade, plus it shrinks the traditional balance that drives every future RMD. Run your own numbers in the TSP Calculator and check your retirement income timeline with the FERS Retirement Calculator before you pick a conversion size.

How to Actually Do It

A few mechanics decide whether this works or backfires.

• Pay the tax from outside the TSP. The TSP does not withhold on an in-plan Roth conversion (the feature launched January 28, 2026). If you pay the tax out of the converted money, you've defeated most of the benefit. Use a taxable account.
• Fill the bracket, don't blow past it. Convert enough each year to reach the top of your target tax bracket or the bottom of the next IRMAA tier, then stop. The goal is a steady ladder, not one giant conversion that spikes a single year.
• Watch what stacks on the conversion. A conversion raises your MAGI, which can also make more of your Social Security taxable. Model the whole picture, not just the conversion in isolation.
• Remember the match stays traditional. Agency matching contributions always land in your traditional balance and aren't converted automatically. Part of your account will stay traditional and subject to RMDs no matter what.
• OBBBA removed the deadline panic. The 2025 law permanently extended the current tax brackets, so there's no sunset forcing your hand. Today's 22% and 24% rates are a stable baseline to plan around.

Frequently Asked Questions

What is IRMAA and how does it affect federal retirees?

IRMAA is the income-related surcharge added to Medicare Part B and Part D premiums once your modified adjusted gross income passes a threshold. In 2026 it starts at $109,000 for single filers and $218,000 for married filing jointly. The first tier adds $1,148 per person per year on top of the standard premium, and it climbs to $6,936 at the top tier. Medicare uses your income from two years earlier to set it.

Why is age 57 to 64 the best time to convert TSP to Roth?

After you retire but before Social Security, RMDs, and Medicare begin, your taxable income drops to its lowest point in retirement. That valley is room you can fill with Roth conversions taxed at a low rate. Once RMDs start at 73, your traditional TSP forces income out whether you want it or not, often pushing you into IRMAA permanently. The gap years are a one-time window that never reopens.

Why does age 63 matter for IRMAA?

IRMAA uses a two-year lookback. The income on your 2026 return sets your 2028 Medicare premiums. If you enroll in Part B at 65, the conversions you do at 63 and 64 are the ones that show up on your first Medicare bills. A large conversion at 63 can spike your premiums right as you start paying them, so that's the year to be most careful about sizing.

Where does the tax on a TSP Roth conversion come from?

From outside the TSP. The TSP does not withhold taxes on an in-plan Roth conversion, so you owe the income tax on the converted amount at filing. Paying it from a taxable account, rather than from the converted balance, is what makes the strategy work. The in-plan conversion feature launched January 28, 2026.

Do Roth TSP balances have required minimum distributions?

No. Under SECURE 2.0, Roth TSP balances are exempt from lifetime RMDs, which is the whole point of converting before 73. Note that agency matching contributions always go into your traditional balance and are not converted automatically, so a portion of your account stays traditional and subject to RMDs.

Related Resources

• TSP Roth In-Plan Conversion Guide 2026: The mechanics, eligibility, and five-year rule.
• The Roth TSP Conversion Tax Trap: When converting too much backfires.
• The TSP RMD Tax Problem at Age 73: What happens if you don't convert in time.
• TSP Calculator: Model your balance and conversion scenarios.

Sources: 2026 Medicare Part B premiums and IRMAA, CMS, TSP Roth in-plan conversions, 2026 tax brackets, Tax Foundation. Worked example figures are FedTools 2026 analysis using verified IRMAA tiers and the IRS Uniform Lifetime Table.