A Roth conversion is conceptually straightforward: you move money from a pre-tax traditional IRA or 401(k) into a Roth IRA, pay ordinary income tax on the converted amount now, and eliminate future tax on that money and its growth. Understood as a single transaction, it is a useful but limited tool.
Understood as a multi-year strategy executed deliberately over a five-to-ten-year window — usually the years between retirement and the onset of Social Security benefits and required minimum distributions — it is one of the most powerful tax optimization tools available in retirement. The difference between a retiree who converts opportunistically and one who converts strategically over a decade can amount to six figures of reduced lifetime tax, lower Medicare premiums for years, and a significantly larger tax-free legacy.
This post is the deeper treatment of Roth conversion strategy we introduced in the April tax series. The question there was whether Roth conversions belong in a retirement tax plan. They do, in almost every case. The question here is how to design the multi-year strategy that makes them most valuable.
Why the Window Between Retirement and RMDs Is So Valuable
The single most important structural feature of Roth conversion planning is the income gap that typically exists between retirement and the onset of two mandatory, difficult-to-avoid income streams: Social Security benefits and required minimum distributions.
In the years before Social Security begins, your taxable income may be dramatically lower than it was during your working years and will be later in retirement. If you retired at 62 or 65 and are delaying Social Security to 70, you may have five to eight years of relatively low-income years before your Social Security — and eventually your RMDs — arrive. Those years are the conversion window.
During this window, you can convert pre-tax IRA assets to Roth at today’s lower income, using the bracket space that would otherwise go empty. The tax you pay on the conversion fills that bracket deliberately, at rates that may be lower than the rates you would pay on the same income in later years when it arrives as forced RMD income stacked on top of Social Security and potentially pension income.
Every dollar converted during this window is a dollar whose future growth becomes permanently tax-free, whose future distribution never adds to taxable income, whose future balance never contributes to RMD calculations, and whose future Medicare surcharges (IRMAA) are never triggered. The compounding benefit of these eliminations, over a 20-to-30-year retirement, is substantial.
Sizing the Conversion: The Bracket-Filling Approach
The most common approach to sizing annual Roth conversions is bracket-filling: convert enough to use the remaining space in your current tax bracket without pushing income into the next bracket up. This approach maximizes the amount converted at today’s rates while avoiding the marginal cost of crossing into higher territory.
In practice, this requires knowing your current year’s taxable income from all sources — pension income, investment income, any part-year wages, dividends, capital gains — and calculating the gap between that income and the top of your target bracket. That gap is your conversion capacity for the year.
For a married couple in the 22 percent federal bracket in 2026, the top of that bracket is approximately $201,050. If their non-conversion income is $80,000, their conversion capacity at 22 percent is approximately $121,000. Converting up to that amount keeps the marginal dollar of conversion at 22 percent. Converting beyond it pushes into the 24 percent bracket — which may still be worthwhile, depending on your projection of future rates.
The bracket-filling approach needs to be adjusted for IRMAA. If converting to the top of the 22 percent bracket would push your MAGI above the first IRMAA threshold, the conversion should be sized to stay below that threshold instead — unless the long-term Roth benefit outweighs the two-year IRMAA cost, which requires an explicit calculation.
The Multi-Year Design: Thinking in Decades, Not Tax Years
The power of multi-year Roth conversion strategy comes from treating the conversion window as a single planning horizon rather than a series of annual tax decisions. The question is not “how much should I convert this year?” It is “how much of my pre-tax balance should I convert by age 73, and what annual conversion amounts produce the lowest lifetime tax bill while staying within my preferred bracket and below my target IRMAA threshold?”
That question requires projecting your future income. At age 73, what will your RMDs be? At whatever age you begin Social Security, what will your benefit be? How does your pension income (if any) interact with these? Once those future income sources are projected, you can calculate the total future taxable income burden and work backward to determine how much conversion in the window years would reduce it most efficiently.
A retiree with $1.5 million in a traditional IRA who retires at 63 and delays Social Security to 70 has approximately seven years of conversion window. If they convert $100,000 per year during that window, they will have converted $700,000 by age 70. At 5 percent annual growth, the remaining IRA balance at 70 would be roughly $1 million, generating a first-year RMD around $38,000. That RMD, added to Social Security income, may push into a higher bracket — but it is significantly smaller than the RMD that would have been generated by the full unconverted balance. The conversions also mean that future growth on those $700,000 in Roth assets is entirely tax-free.
The specific optimal conversion amount varies enormously by individual — by the size of the pre-tax balance, the expected Social Security benefit, the presence or absence of pension income, the state tax environment, and the projected future rates. This is a calculation that requires your actual numbers, not a general rule.
The Roth as Legacy and Flexibility Asset
Roth IRA assets are uniquely valuable beyond their tax-free growth. They have no required minimum distributions during the account holder’s lifetime — meaning they can grow undisturbed indefinitely, compounding tax-free as long as they remain in the account. For retirees who do not need to draw on Roth assets for their own income, the Roth becomes the last asset to be touched and the most efficient legacy asset to pass to heirs.
Inherited Roth IRAs must be distributed within 10 years under current law, but those distributions are still tax-free to the heirs — a significant advantage compared to an inherited traditional IRA, whose distributions are taxable income in the heir’s potentially high-earning years.
Roth assets also provide flexibility within retirement. A year with unexpectedly high medical expenses that pushes income up near an IRMAA threshold can be partially offset by drawing from Roth rather than traditional IRA assets — because Roth distributions do not count as taxable income and do not affect MAGI. This flexibility has real value in a retirement with variable income or expenses.
What Prevents Most Retirees From Converting More
The most common reason retirees underutilize the Roth conversion window is the immediate tax cost. Paying tax now on income that could be deferred feels like a loss, which loss aversion amplifies. The $25,000 tax bill on a $100,000 conversion is concrete and immediate; the $70,000 or $100,000 of future tax savings is abstract and distant. The brain weights the concrete cost more heavily than the projected future benefit — which is exactly the behavioral bias that makes multi-year Roth conversion strategy so underused.
The other common barrier is complexity. Sizing conversions against brackets, IRMAA thresholds, state taxes, and future RMD projections simultaneously requires analysis that most retirees cannot do themselves and that many financial advisors do not proactively initiate. The result is that retirees who would benefit enormously from an aggressive conversion strategy during their window years convert little or nothing, and arrive at age 73 with the full pre-tax balance generating mandatory taxable income they cannot control.
FAQ: Is It Too Late to Do Roth Conversions If I’m Already Taking RMDs?
The conversion window is most valuable before RMDs begin, but conversions after 73 are not without value. You cannot convert the RMD amount itself — RMDs must be distributed first each year before any conversion can occur — but you can convert additional IRA balance beyond the RMD. Whether that makes sense depends on your current bracket, your IRMAA position, the size of the remaining pre-tax balance, and how many years remain to compound the Roth growth. For retirees in their early 70s with substantial pre-tax balances, conversions above the RMD in lower-income years can still meaningfully reduce the future tax burden. For retirees in their late 70s or 80s with smaller balances, the math is often less compelling and the priority shifts to other planning tools like QCDs. The answer depends on your specific numbers — a projection is the only way to know.
If you are in or approaching the conversion window — the years between retirement and age 73 when RMDs begin — and you have not yet designed a multi-year conversion strategy, this is among the highest-value planning conversations available to you.
Schedule a complimentary Roth conversion strategy consultation with our office. We will model your conversion window, project your future RMD burden, calculate your bracket and IRMAA exposure across multiple scenarios, and build a year-by-year conversion plan designed to minimize your lifetime tax bill.
