Jeff Dragon, president and financial advisor at North Shore Retirement Advisors in Stoneham, Massachusetts, has spent 36 years helping retirees answer a question most of them never thought to ask: how much of your retirement income is quietly being taxed twice? For a growing number of his clients, the answer is more than they expected. Traditional IRA distributions, required minimum distributions, and even Social Security benefits can push retirees into higher Medicare premium brackets, creating a compounding tax problem that erodes spending power year after year. Dragon has built his practice around a specific strategy designed to interrupt that cycle: the strategic Roth IRA conversion.
The Medicare Surcharge Problem Most Retirees Discover Too Late
Medicare Part B and Part D premiums are calculated based on modified adjusted gross income, or MAGI. When a retiree’s MAGI crosses certain thresholds, the Social Security Administration applies an Income-Related Monthly Adjustment Amount, known as IRMAA, that can add hundreds of dollars per month to premium costs. For a married couple filing jointly, the first IRMAA surcharge kicks in at $206,000 in combined income. The surcharges escalate from there, topping out at an additional $395.60 per person per month for Part B alone at the highest bracket.
The problem, as Dragon explains it, is that most retirees do not realize how their required minimum distributions interact with these thresholds. A retiree with $1.2 million in a traditional IRA at age 73 faces an RMD of roughly $47,000. That distribution counts as ordinary income, and when stacked on top of Social Security benefits, pensions, and any other taxable income, it can trigger IRMAA surcharges that persist for the following calendar year. The result is a cascading tax event that catches people off guard.
How Jeff Dragon’s Conversion Strategy Works
Dragon’s approach relies on proprietary software that calculates the precise dollar amount a client can convert from a traditional IRA to a Roth IRA each year without crossing into a higher tax bracket. The conversion itself is a taxable event, but by spreading it across five to six years and staying within predetermined bracket limits, the total tax cost is significantly lower than the combined taxes and Medicare surcharges a client would face from decades of RMDs.
To offset the immediate tax hit, Dragon works with insurance companies that offer annuity products with upfront bonuses of 12% to 15% on deposited funds. Those bonuses can be directed toward paying the income tax liability generated by each year’s conversion. Once the Roth is fully funded, the account grows tax-free, distributions are tax-free, and Roth IRAs carry no required minimum distributions. That means the converted funds no longer count toward the MAGI calculation that determines Medicare premiums.
A Narrowing Window for Roth Conversions
Dragon points to a structural reason for acting now rather than later. Several provisions of the Tax Cuts and Jobs Act of 2017 are set to sunset at the end of 2025, which could push individual income tax rates back to their pre-2018 levels. If that happens, the cost of converting the same dollar amount goes up. A married couple in the current 22% bracket could see their marginal rate rise to 25%, and those in the 24% bracket could face 28%. Converting at today’s rates locks in a lower tax cost on assets that will never be taxed again.
The federal debt adds another variable. With annual deficits exceeding $1.8 trillion and interest payments on the national debt now consuming a record share of the federal budget, Dragon argues that the probability of higher tax rates in future years is greater than the probability of lower ones. For retirees sitting on large traditional IRA balances, that math favors converting sooner.
Beyond Roth Conversions: A Broader Retirement Income Strategy
Roth conversions are one piece of a larger planning framework at North Shore Retirement Advisors. Dragon and his team also work with clients on Social Security timing optimization, helping individuals determine whether claiming at 62, full retirement age, or 70 produces the highest lifetime benefit when factored against their specific tax situation. The firm offers Medicare planning to coordinate coverage decisions with income projections, along with risk evaluation, long-term care planning, and a $149 tax preparation service that allows the team to see each client’s full financial picture in one place.
Dragon has conducted more than 1,200 retirement planning seminars over his career, reaching over 4,000 attendees across the greater Boston area. He has advised retirees from companies including Raytheon, GE, AT&T, Verizon, Hewlett Packard, and Harvard University, as well as employees of area hospitals like Mass General and Beth Israel. He earned his BBA from Keene State College and completed certified financial planning coursework at Boston University and Merrimack College.
For retirees watching their tax bills climb alongside their Medicare premiums, Dragon’s message is direct: the tools to change the trajectory already exist, but the favorable conditions to use them will not last indefinitely. North Shore Retirement Advisors is located at 91 Montvale Ave, First Floor, Stoneham, Massachusetts, and can be reached at 617-513-0637.
