Roth conversions in retirement: when they make sense (and when they don't)
By the RetireGlide Team · June 29, 2026
A Roth conversion moves money from a traditional IRA or 401(k) into a Roth IRA, paying ordinary income tax on the converted amount now in exchange for tax-free growth and withdrawals later. It makes sense when your tax rate today is lower than the rate you (or your heirs) would otherwise pay on that money — and the most common place that happens is the 'golden window' between retirement and RMD age, when wages have stopped but forced income hasn't started.
The bracket arbitrage
Every conversion is a bet on relative rates: tax paid at today's marginal rate versus tax avoided at tomorrow's. A retiree with big pre-tax balances often faces higher rates later — RMDs stack on Social Security, and a surviving spouse eventually files single, where the same income hits higher brackets. Converting enough each year to 'fill up' a low bracket (say, to the top of the 12% or 22% bracket) while rates are temporarily low is the classic pattern.
Conversions are also an estate play: heirs who inherit a traditional IRA must generally drain it within 10 years, often during their own peak earning years. Inheriting a Roth is dramatically kinder.
The costs people forget
Conversion income is real income in the year it lands, and it drags side effects with it:
- IRMAA — conversion income two years ago sets this year's Medicare premium surcharge; a large conversion at 63+ can raise premiums at 65.
- ACA subsidies — for pre-65 retirees on marketplace coverage, conversion income reduces or eliminates premium credits; near a cliff, one extra dollar can cost thousands.
- Social Security taxation — conversions raise provisional income, pulling more of your benefit into taxable income in that year.
- Paying tax from the converted funds — using IRA dollars to pay the conversion tax shrinks the amount that reaches the Roth; conversions work best when the tax is paid from taxable savings.
The five-year rules, briefly
Each conversion has its own five-year clock for penalty-free access to the converted principal before age 59½. Separately, Roth earnings are tax-free once you're 59½ and any Roth IRA of yours has been open five years. After 59½, the per-conversion clocks stop mattering for penalties — but the five-year account rule still applies to earnings.
How to size a conversion
There's no universal right amount — the answer is a year-by-year optimization against brackets, IRMAA tiers, and your spending needs. This is a problem simulation handles well: model conversion schedules against your actual accounts and see lifetime taxes, RMD trajectories, and ending balances side by side before you act. Educational tools can show you the trade-offs; a large conversion decision is also worth a session with a tax professional.
Frequently asked questions
- What is the best age for Roth conversions?
- The highest-value years are typically between retirement and RMD age (and before Social Security starts) — income is low, so conversions fill cheap brackets. Converting after RMDs begin is harder: RMDs must come out first and can't themselves be converted.
- Do Roth conversions count against IRMAA?
- Yes. IRMAA is based on your modified AGI from two years prior, and conversion income counts. Retirees near Medicare age often cap conversions just below an IRMAA threshold.
- Is there a limit on how much I can convert?
- No dollar limit — you can convert any amount in any year. The practical limit is the tax bill: each dollar converted is ordinary income, so large conversions climb through brackets quickly.
- Can I undo a Roth conversion?
- No. Recharacterization of conversions was eliminated in 2018 — conversions are permanent, which is another reason to model before converting.
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RetireGlide is an educational modeling tool, not an investment, tax, or legal adviser. Numbers that change annually (tax thresholds, premiums, benefit formulas) are approximate — always verify against the official sources above. Read our full disclaimer.