A Roth conversion moves money from a traditional IRA (taxed when you withdraw) to a Roth IRA (grows and withdraws tax-free). You pay tax now to save more later.
The question isn't whether to convert, it's how much and when.
Why Convert in Retirement?
Most retirees have the majority of their savings in pre-tax accounts (traditional IRAs, 401(k)s). Every dollar they withdraw is taxed as ordinary income. This creates three problems:
- RMDs force withdrawals starting at age 73, whether you need the money or not
- RMDs increase your provisional income: triggering taxes on Social Security
- RMDs can trigger IRMAA: adding thousands to your annual Medicare premiums
The Sweet Spot: How Much to Convert
The goal is to convert enough to "fill up" your current tax bracket without spilling into the next one.
| Tax Bracket (2024 MFJ) | Income Range | Strategy |
|---|---|---|
| 10% | $0 - $23,200 | Convert aggressively |
| 12% | $23,201 - $94,300 | Convert to the top of this bracket |
| 22% | $94,301 - $201,050 | Convert selectively |
| 24% | $201,051 - $383,900 | Usually too expensive |
If your taxable income is $50,000 and you're married filing jointly, you can convert approximately $44,300 and stay in the 12% bracket. That conversion costs you $5,316 in tax today but saves you from paying 22%+ on that money later.
What are your retirement dollars actually guaranteed to do?
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The IRMAA Trap
This is where most people make mistakes. Medicare looks at your income from two years ago to set your premiums. A large Roth conversion in 2026 affects your Medicare premiums in 2028.
The 2026 IRMAA brackets start above $109,000 (single) and $218,000 (married). Crossing these thresholds can add $1,148 to $6,936 per person per year to your Medicare costs. Read our for the exact brackets.
The 5-Year Conversion Playbook
Rather than converting everything at once, spread it over multiple years:
- Year 1-2: Convert to the top of the 12% bracket. Low tax cost, big long-term savings.
- Year 3-4: Evaluate if converting into the 22% bracket makes sense based on your projected RMDs.
- Year 5+: Adjust based on tax law changes, health, and spending needs.
When NOT to Convert
- You're already in a high tax bracket and expect to be in a lower one in retirement
- You need the money within 5 years (the 5-year rule applies to conversions)
- You'd have to sell investments at a loss to pay the conversion tax
- You're already on Medicare and the conversion would trigger IRMAA surcharges
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