Many retirees have a window between retirement and when required minimum distributions (RMDs) begin where taxable income may be lower than it was during their working years and lower than it will be once RMDs kick in. That window can be a good time to plan Roth conversions, but the right approach depends on your tax bracket, Social Security timing, Medicare exposure, and long-term income picture. The goal is not to convert as much as possible. It is to convert the right amount each year at the lowest tax cost your situation allows.
Key Takeaways
- RMDs can push taxable income higher later, and that income may compound with Social Security benefits becoming taxable.
- The years before RMDs begin may offer real planning flexibility if managed thoughtfully.
- Conversions should be coordinated with Social Security timing to avoid what planners call the "tax torpedo."
- Medicare IRMAA surcharges use a two-year lookback, so today's income decisions affect premiums two years from now.
- A multi-year approach, with a bracket target set each year, tends to produce better outcomes than a single large conversion.
Why Pre-RMD Years Can Be a Planning Opportunity
Income Gap Years
For many people, their lowest annual income level will be after they retire but before RMDs begin at age 73. If they have not yet started Social Security, that retirement-to-RMD period may be even lower. That window may be an ideal time to consider conversions at a more favorable tax rate.
The sweet spot for Roth conversions is often the gap years between retirement and age 73, when RMDs start. During this window, you may be able to convert traditional IRA funds at lower effective rates.
Under SECURE 2.0, anyone born in 1960 or later does not face required minimum distributions until age 75. A couple retiring at 63 could have roughly 12 years before the IRS forces withdrawals from their accounts. During those years, the account keeps growing tax-deferred. At a 6% annual return, a $2 million balance could grow to well over $4 million by age 75, and the RMDs on that larger balance will be larger, with every dollar taxed as ordinary income. That is precisely why the pre-RMD window matters. You have time to work with the balance before the math starts working against you.
This window can be a good time to fill lower tax brackets with Roth conversions at 12% or 22% rates, rather than facing higher rates once RMDs begin. The strategy can be particularly powerful when retirees delay Social Security until age 70, which creates an extended period of lower-income years.
Future Bracket Risk
Many investors have diligently saved in traditional retirement accounts only to discover they are sitting on a tax time bomb. Required minimum distributions, Social Security, and rising brackets can erode retirement income. Roth conversions offer a path forward, but only if executed with care.
By proactively converting pre-tax retirement account funds into Roth IRAs, retirees can reduce the taxable portion of their retirement income, which may help reduce the impact of higher future tax rates on RMDs.
On the tax rate question, the One Big Beautiful Bill Act of 2025 made TCJA rates permanent, removing the prior uncertainty around a scheduled expiration. While Congress can always change tax rates in the future, there is currently no scheduled reversion to higher rates. Today’s rates are historically favorable compared to pre-TCJA brackets, and converting at known rates now locks them in regardless of what future legislation may bring.
That said, future tax rates are not the only variable. Even if rates stay the same, a larger RMD balance means more dollars being taxed at whatever rate applies at the time. Managing the balance now reduces that exposure regardless of where rates go.
How to Coordinate Conversions with Social Security
Different Claiming Ages and Tax Impact
The year you claim Social Security has a direct effect on how much room you have to convert at lower rates. Delaying Social Security to age 70 does two things: it increases the monthly benefit permanently, and it extends the years where your income may be low enough to allow more tax-efficient conversions.
If your provisional income is between $25,000 and $34,000 and you are single, or between $32,000 and $44,000 and you file jointly, up to 50% of your benefits may be taxable. If your provisional income is more than $34,000 single or more than $44,000 married filing jointly, up to 85% of your benefits may be taxable. One way around this is to delay taking Social Security until after you have converted money to a Roth.
The practical takeaway: if you retire at 63 and delay Social Security to 70, you may have several years where your income is low enough to convert meaningful amounts while staying in the 12% or 22% bracket. Once Social Security starts, every conversion dollar added to your income can also pull more of your benefits into taxable territory.
Avoiding Stacked Income Years
If you are already receiving Social Security, a Roth conversion increases your provisional income, which can make more of your Social Security benefit taxable. Your provisional income is your adjusted gross income plus tax-exempt interest plus 50% of your Social Security benefits. For married couples filing jointly, once provisional income exceeds $44,000, up to 85% of Social Security becomes taxable. A conversion that pushes you across this threshold creates a situation where each additional dollar of conversion income is effectively taxed at a higher rate because it simultaneously makes more of your Social Security taxable. This is one of the strongest arguments for doing Roth conversions before claiming Social Security.
This effect is sometimes called the “tax torpedo.” Every additional dollar of income from a traditional IRA can make an extra 85 cents of your Social Security taxable. This creates an effective marginal tax rate that can exceed 40%, far higher than your actual stated tax bracket.
The fix is not to avoid conversions entirely after Social Security begins. It is to size them carefully. Staying below or just at the 85% taxability threshold keeps the effective marginal rate manageable. Working with a tax advisor to model the full picture before setting a conversion amount is the best approach here.
A Multi-Year Conversion Plan Approach
A one-time large conversion is rarely the most tax-efficient approach. You do not have to convert all of your retirement funds at one time. You can spread out conversions over multiple years, limiting your tax hit and converting amounts that allow you to stay in your bracket.
Set a Bracket Target Each Year
The optimal Roth conversion strategy often involves filling up your current tax bracket each year. If you are in the 22% bracket, convert enough to bring taxable income to the top of the 22% bracket without crossing into 24%.
To find that number, start with your taxable income for the year, subtract it from the top of your target bracket, and that remaining space is your conversion ceiling for the year. The most expensive mistake is spiking into a higher bracket when you could have spread the conversion over multiple years. Spread over several years, a large balance might stay in 32% or below. The difference can be $15,000 to $30,000 in unnecessary tax.
It also helps to convert later in the year rather than early. It is often wise to wait until near the end of your low-income year to make the conversion because you will have a better idea of your total income and your marginal tax bracket.
Monitor IRMAA Thresholds
One variable that surprises a lot of retirees is the Medicare IRMAA surcharge. This is a monthly premium increase applied to Medicare Part B and Part D for people whose income exceeds certain limits. The catch is that it looks back two years.
The 2026 IRMAA brackets impose Medicare surcharges of $1,148 to $6,936 per person when MAGI exceeds $109,000 for single filers or $218,000 for married filing jointly. Because IRMAA uses a two-year lookback, income decisions today affect premiums in 2028.
It only takes earning $1 over the threshold to trigger the surcharge. In 2026, that $1 of extra income would cost an additional $1,052 annually in Medicare surcharges at the first tier. There are four more tiers above that.
Roth IRA distributions are not counted toward MAGI for IRMAA purposes. That is one of the key long-term benefits of converting now: future withdrawals from the Roth account will not trigger IRMAA the way traditional IRA withdrawals or RMDs would.
The ideal Roth conversion window is generally ages 60 to 62 before Medicare IRMAA becomes a concern, and again from roughly ages 66 to 72 after IRMAA risk settles but before RMDs start. Avoid large conversions at ages 63 to 64 unless you are prepared for the impact on Medicare premiums two years later.
Update for Investment Performance
Your conversion plan should not be a static document. Portfolio performance, interest income, capital gains distributions, and life changes all affect your taxable income in a given year. If a strong market year means your taxable income is higher than expected, you may have less room to convert that year without moving into a higher bracket or crossing an IRMAA threshold. If the market is down, that may actually be a good time to convert a larger amount because the pre-tax balance is lower and you are still paying tax on the same number of dollars in today’s terms.
Reassess annually. Tax laws, income, and personal circumstances change. Adjust your strategy every year.
FAQs
There is no universal cutoff age. The right stopping point depends on your situation, not a number on a calendar. You may want to continue conversions in retirement if your RMD plus other income does not push you into a high bracket, and you can afford to pay the taxes on the conversion at a reasonable rate, you want to reduce the size of your future RMDs, or you have beneficiaries in higher tax brackets where converting now could save them significant taxes later. For many people, the window narrows significantly once RMDs begin and Social Security is fully in the picture. Working with your advisor each year is the best way to know whether a conversion still makes sense.
Yes, but with an important rule to follow. The IRS requires you to take your annual required minimum distribution before you convert any additional amounts to a Roth IRA. If you fail to take your RMD first, the amount not taken can be subject to significant penalties. Once the RMD is satisfied, you can convert additional amounts if the tax math supports it. Keep in mind that the RMD itself adds to your taxable income, so adding a conversion on top of the RMD may push you into a substantially higher bracket. Calculating whether the additional conversion makes sense requires looking at the full income picture for that year.
It can, significantly. Non-spouse beneficiaries who inherit a Roth IRA receive the assets completely tax-free and have a 10-year window during which they can keep the assets invested and growing tax-free. By contrast, heirs who inherit a traditional IRA pay ordinary income tax on every distribution at their own tax rate at the time of withdrawal. If your heirs are in a high-income phase of their careers, that tax burden can be meaningful. Converting from a traditional IRA to a Roth IRA allows your savings to grow unencumbered by RMDs, potentially leaving more for your heirs to withdraw tax-free.
This is one of the most effective uses of a conversion. If you have an unusually high deduction in a given year (a large charitable contribution, significant medical expenses, a business loss), that deduction offsets your income, which may allow you to convert more at the same effective rate. If you convert a meaningful amount of your IRA to a Roth IRA while simultaneously increasing your charitable contributions by an equivalent amount, the income from the conversion can be offset, potentially resulting in no additional tax on the conversion. Talk with your CPA early in the year when you know a large deduction is coming. That gives you time to plan the conversion amount strategically before year-end.
There are two tools worth knowing here: paired conversions with charitable deductions, and qualified charitable distributions (QCDs). Many investors find it useful to make a QCD in the same year as a Roth conversion, in turn helping to offset the taxable income generated from the conversion and potentially reducing overall tax liability.
A QCD allows you to direct money from your IRA directly to a qualified charity. Because QCDs do not increase taxable income, both higher tax rates and phaseouts can be avoided. In addition, because QCDs reduce the balance of the IRA, they may reduce required minimum distributions in future years. Starting at age 70½, a QCD is a direct transfer of money from your IRA provider, payable to a qualified charity. QCDs can be counted toward satisfying your required minimum distributions for the year, as long as certain rules are met. The 2026 annual limit for QCDs is $111,000 per individual.
The key distinction: a QCD reduces the IRA balance and satisfies an RMD without adding to your taxable income. A Roth conversion moves money from the IRA into a Roth and does add to taxable income. Using both in the same year, when sized properly, can create a powerful combination for someone who is charitably inclined and wants to manage their tax bracket.
With TCJA rates now made permanent under the One Big Beautiful Bill Act, today's relatively favorable brackets provide a known baseline. There is no scheduled reversion to higher rates. However, Congress can always change tax rates in the future, which is precisely why locking in known rates now on at least a portion of your balance carries value. Even if rates never increase, converting today still reduces your future RMD obligation and the compounding tax drag that comes with a larger traditional IRA balance. The case for converting does not rely entirely on rates going up.
The optimal strategy often involves front-loading Roth conversions in years before Medicare IRMAA becomes a concern, up to just below the IRMAA Tier 1 threshold, then reducing conversion amounts once on Medicare to manage ongoing surcharge exposure. Beyond IRMAA, watch the Social Security provisional income thresholds and your income tax bracket cliff. The formula is straightforward: project your income for the year, identify how much room remains in your target bracket, check the IRMAA thresholds, and convert up to whichever limit is reached first. If you have uncertainty about your year-end income, wait until November or December to finalize the conversion amount.
Yes, and the earlier in the year the better. A Roth conversion affects your income taxes, Medicare premiums two years out, Social Security taxation, and potentially your estate plan. Those are four separate variables that interact with each other in ways that are hard to model without looking at the full picture. Your financial advisor and CPA should be working together on this. The financial plan determines the long-term goal. The tax return determines the actual numbers for the current year. Both inputs are needed to get the conversion amount right.
Plan Your Roth Conversion With Confidence
The right Roth strategy depends on your income, RMD schedule, and Social Security timing. Schedule a complimentary consultation with one of our CFP® professionals at Bauman Wealth Advisors. We will help you build a year-by-year Roth conversion plan that keeps taxes predictable, avoids IRMAA surprises, and maximizes long-term flexibility.
