Seven Cliffs
The retirement income cliffs every retiree faces.
A single Roth conversion can trigger multiple cliffs simultaneously. Each one is a step function — crossing by $1 can cost thousands. This is why headroom matters.
IRMAA Medicare Surcharge
A 5-tier Medicare surcharge applied to Part B and Part D premiums — based on your income from two years ago.
ACA Subsidy Cliff
A step-function threshold where premium tax credits vanish entirely the dollar your MAGI exceeds 400% of the Federal Poverty Level.
Widow Penalty IRMAA Impact
The year after a spouse dies, all tax brackets, standard deductions, and IRMAA thresholds reset to single-filer amounts — often doubling effective rates overnight.
Net Investment Income Tax (NIIT)
A 3.8% surtax on investment income that layers on top of ordinary income tax with no phase-out — and thresholds that never rise with inflation.
OBBBA Senior Deduction Phase-Out
A $6,000 extra deduction for taxpayers 65+ that erodes to zero across a $100,000 MAGI band — raising the effective rate within that band.
Tax Torpedo — Social Security
Additional income can make up to 85% of Social Security suddenly taxable — creating effective marginal rates far above your stated bracket within a specific income band.
LTCG Bracket Stacking
Roth conversions or IRA withdrawals that push taxable income above the 0% LTCG ceiling can flip qualified dividends and capital gains from tax-free to 15% taxable.