Common questions about retirement tax cliffs.

MAGI stands for Modified Adjusted Gross Income. It is your Adjusted Gross Income (AGI) with certain deductions added back. In retirement, MAGI is the number the IRS and CMS use to determine your ACA health insurance subsidy, your Medicare Part B and D premiums, your Social Security taxation, and more. A $1 increase in MAGI can trigger thousands of dollars in additional costs if it pushes you over a cliff.

A tax cliff is an income threshold where crossing it by even $1 triggers a sudden, large cost increase. Unlike a marginal rate, which phases in gradually, a cliff is a step function. For example, the ACA subsidy cliff at 400% FPL means crossing that line by a single dollar can cost $12,000 in lost subsidies.

A Roth conversion moves money from a traditional IRA (pre-tax) into a Roth IRA (post-tax). The converted amount is counted as ordinary income in the year of conversion, which raises your MAGI. Because so many retirement cliffs are MAGI-driven, a poorly timed Roth conversion can trigger multiple cliffs at once.

No. CliffEdge is a constraint visualization tool. It shows you the formulas and thresholds — not what you should do. The tool is for educational and planning purposes only. CliffEdge is not registered as an investment adviser or broker-dealer and does not hold itself out as one. Verify all numbers with a qualified tax professional before acting.

The Affordable Care Act ties health insurance premium subsidies to Federal Poverty Level (FPL). At 400% FPL ($62,600 for a single filer in 2026), subsidies end abruptly. Pre-65 retirees who rely on ACA marketplace coverage can lose $8,000–$12,000 in annual subsidies by earning $1 too much. MAGI for ACA includes Social Security income.

IRMAA (Income-Related Monthly Adjustment Amount) is a Medicare surcharge. If your MAGI from two years prior exceeds the base threshold ($228,000 for MFJ in 2026), Medicare charges higher Part B and Part D premiums. There are six IRMAA tiers; crossing from one to the next can cost a couple $3,000–$11,000 more per year. IRMAA uses a different MAGI definition than ACA.

The Tax Torpedo occurs when Social Security recipients do Roth conversions. Because up to 85% of Social Security becomes taxable once MAGI exceeds a threshold, additional income can effectively be taxed at rates far above your stated bracket — sometimes 40.7% or higher — before the conversion itself is taxed. CliffEdge shows the effective marginal rate at each income level.

When a spouse dies, the surviving spouse loses the Married Filing Jointly (MFJ) status and transitions to Single or Qualifying Surviving Spouse. This narrows tax brackets and cuts IRMAA thresholds nearly in half, often causing a $5,000–$15,000+/yr increase in taxes and Medicare costs with no change in income. CliffEdge includes a survivor simulator that shows the before/after impact.

The One Big Beautiful Bill Act introduced an additional $6,000 deduction for taxpayers 65 and older, but it phases out completely between $75,000 and $175,000 MAGI. This means the effective marginal rate is higher within that band. CliffEdge models this phase-out as part of the overall cliff analysis.

The NIIT is a 3.8% surtax on net investment income (dividends, capital gains, rental income, etc.) for single filers above $200,000 MAGI and MFJ above $250,000 MAGI. Because the threshold is not inflation-adjusted, more retirees are caught by it each year.

All thresholds are sourced directly from IRS, CMS, and HHS publications and stored in versioned JSON tables in our codebase. We update them annually as the agencies publish new figures. Every entry includes the source URL and the date the table was last verified. That said, tax law changes frequently — always verify critical numbers before acting.

CliffEdge currently uses 2026 tax year figures. IRMAA surcharges shown are based on your 2024 income (the two-year lookback). The tax year and data currency are displayed on every calculation result.

Every result CliffEdge produces includes a step-by-step plain-English breakdown of how the number was calculated, which formula was applied, and which IRS/CMS source it comes from. No number appears without an explanation. This is the core feature that differentiates CliffEdge from every other retirement calculator.

Your income and tax numbers are never stored or transmitted to our servers — all cliff calculations run locally in your browser. If you generate a Shareable Link, those numbers are encoded in a part of the URL that browsers never send to any server, so they still don't reach us, even though they're visible to anyone you share the link with. If you create an optional free account, only your email address and a user ID are stored on our servers. No income figures, no conversion amounts, no tax data.

Optimization requires knowing your goals, risk tolerance, time horizon, estate plans, and dozens of other personal factors that CliffEdge does not know. Showing you the boundaries is safe and honest. Recommending a conversion amount would require CliffEdge to make assumptions it has no basis for. Show the cliff, not the jump.