The Roth Conversion Window Between Retirement and RMDs

Retirement can create a brief period when your taxable income is lower than it was during your working years and lower than it may be later.

Your paycheck has stopped. Social Security may not have started. Required minimum distributions may still be years away. For some retirees, this gap creates an opportunity to move part of a traditional IRA or 401(k) into a Roth account while controlling the resulting tax bill.

The goal is not necessarily to empty every pretax account. It is to decide whether paying tax on selected dollars now could reduce taxes, Medicare premiums or forced withdrawals later.

What is a Roth conversion window?

A Roth conversion moves money from a pretax retirement account into a Roth account. The previously untaxed amount generally becomes ordinary taxable income in the conversion year. Once it is in the Roth, the money can continue growing, and qualified withdrawals can be federally tax-free.

The years after retirement can be attractive because several sources of taxable income may not have begun yet:

• Employment income has ended.
• Social Security may be delayed.
• Pension income may not have started.
• Required minimum distributions have not begun.
• A married couple may still be filing jointly.

Retirees born in 1960 or later generally reach their required-minimum-distribution starting age at 75. That can leave several years in which they choose how much pretax income to recognize instead of waiting for an RMD to determine it.

A different example: converting gradually instead of all at once

Consider Maya and Daniel, ages 64 and 62. They have recently retired with:

• $1.08 million in traditional retirement accounts
• $145,000 in a taxable brokerage account
• $70,000 in cash
• No pension
• Social Security planned for ages 68 and 70
• About $74,000 of annual household spending

They do not begin with a goal of converting the full $1.08 million. Instead, they prepare a tax projection each year.

In their first retired year, they expect interest, dividends and a small amount of consulting income. After accounting for deductions, they estimate how much additional ordinary income they can recognize without crossing the tax and Medicare limits they have selected.

They might convert $82,000 one year, $96,000 the next year and a smaller amount after one Social Security benefit begins. If markets fall, they may convert shares while their value is temporarily lower. If capital gains or consulting income are unexpectedly high, they may reduce or skip that year’s conversion.

The amount changes because a tax-smart conversion plan is recalculated annually. It is not a fixed transfer schedule.

Do not use the tax bracket as the only ceiling

A common strategy is to “fill a tax bracket.” That can be a useful starting point, but taxable income is only one part of the calculation.

Before selecting the conversion amount, examine several thresholds.

Federal income-tax brackets

For 2026, the 24% federal bracket begins when married couples filing jointly have more than $211,400 of taxable income. The standard deduction for joint filers is $32,200.

These numbers apply to taxable income, while several other limits use modified adjusted gross income. A conversion that remains inside a chosen tax bracket can still cross another costly threshold.

Medicare IRMAA

Medicare uses income from an earlier tax return—generally two years earlier—to determine income-related surcharges for Part B and Part D.

For 2026 premiums, the first IRMAA tier begins when modified adjusted gross income exceeds $109,000 for an individual or $218,000 for a married couple filing jointly. Crossing a threshold can increase premiums for each covered spouse.

Avoiding every IRMAA surcharge is not automatically the best decision. Paying one tier may be reasonable when it allows a valuable conversion at a rate expected to be lower than the future rate. The surcharge should be included in the comparison rather than treated as an absolute prohibition.

Social Security taxation

Once Social Security begins, conversion income can cause more of the benefit to become taxable. Up to 85% of Social Security benefits can be included in taxable income, depending on provisional income.

This can make a conversion before Social Security starts more attractive. It can also produce a higher effective marginal rate after benefits begin because one additional conversion dollar may cause additional Social Security income to become taxable.

Marketplace health-insurance assistance

A retiree who has not reached Medicare age may receive premium tax credits through the Health Insurance Marketplace. A Roth conversion raises household income and can reduce that assistance.

For someone retiring before 65, lost premium assistance can cost more than an additional percentage point or two of federal tax. Include it in the conversion calculation.

Capital gains, deductions and state taxes

Conversion income can interact with long-term capital gains, the net investment income tax, deductions, credits and state income taxes. A retiree who plans to move to a state with different tax rules may also benefit from timing conversions around that move.

Why several smaller conversions can work better

Dividing the strategy across multiple years offers several advantages:

1. You can respond to changing income. Dividends, capital gains, consulting work and pension elections can change the available conversion room.
2. You can monitor Medicare thresholds. The conversion can be adjusted before it creates an avoidable surcharge.
3. You retain flexibility when tax law changes. A multiyear plan can be revised annually.
4. You reduce the risk of a large irreversible mistake. Current law generally does not allow a completed Roth conversion to be reversed.
5. You may convert more shares during a market decline. A lower account value can allow more assets to move for the same taxable conversion amount.

A large conversion can still make sense during an unusually low-income year or before a known increase in future income. The comparison should focus on lifetime results rather than the size of a single year’s tax bill.

Pay attention to where the tax money comes from

When practical, many retirees pay the conversion tax from cash or a taxable account instead of withholding it from the converted amount.

Using outside money allows the entire requested amount to reach the Roth. It can also help avoid early-distribution complications for someone under age 59½. But outside cash has an opportunity cost: money used for taxes can no longer remain invested or cover future spending.

That cost belongs in the analysis. A conversion is not free simply because its tax is paid from another account.

The federal tax system is pay-as-you-go. A substantial conversion may require estimated tax payments or adjusted withholding during the year. Review the payment schedule before completing the transaction.

Once RMDs begin, take the RMD first

A required minimum distribution cannot be converted to Roth.

If an RMD is due for the year, the required amount must be distributed before additional eligible dollars are converted. Converting money without first satisfying the RMD can create reporting problems and potential penalties.

Reducing a pretax balance before RMD age may produce smaller future RMDs. It can also leave a surviving spouse with more Roth money and less taxable income when that spouse eventually files as single.

Do not overlook the surviving spouse

Married retirees sometimes compare conversions only with their current joint tax return. That misses one of the strongest reasons to evaluate the strategy.

After one spouse dies, the survivor may have:

• A single filer’s narrower tax brackets
• One standard deduction instead of a joint deduction
• Much of the same pretax account balance
• One Social Security benefit instead of two
• Similar housing and healthcare expenses

Paying some tax while both spouses can use joint brackets may reduce the survivor’s later tax burden. This does not mean every couple should convert aggressively, but the survivor period should appear in the projection.

When retaining pretax money may be better

A Roth conversion may be a poor fit when:

• The conversion occurs during an unusually high-income year.
• Future withdrawals are likely to face a clearly lower tax rate.
• Paying the tax would consume needed emergency or spending reserves.
• The added income would eliminate valuable health-insurance assistance.
• The retiree plans to donate much of the IRA directly to charity through qualified charitable distributions.
• The account contains unresolved after-tax basis or missing Form 8606 records.
• The retiree expects to move soon to a state with substantially lower income taxes.

The right answer can also be a modest conversion that improves flexibility without attempting to eliminate the traditional account.

A practical annual process

Use this sequence each year during the potential conversion window:

1. Estimate wages, pensions, Social Security, interest, dividends, capital gains and retirement withdrawals.
2. Confirm deductions, credits, state taxes and any Marketplace assistance.
3. Calculate room beneath the selected tax, Medicare and benefit thresholds.
4. Leave a buffer for year-end income that is not yet known.
5. Decide whether the projected future tax rate justifies paying today’s rate.
6. Determine whether cash outside the retirement account can cover the tax.
7. If an RMD applies, distribute it before converting anything else.
8. Request a direct trustee-to-trustee conversion.
9. Confirm that the transferred money is invested after it reaches the Roth.
10. Save the transaction records and review estimated-tax payments.

For the account paperwork, custodian questions, forms and transaction sequence, use RetireNerd’s complete guide: How to Convert Pretax Retirement Accounts to Roth: A Step-by-Step Guide.

The decision that matters

The question is not how quickly you can empty a 401(k). It is whether converting a particular amount this year is likely to improve the household’s lifetime after-tax position.

A useful projection compares:

• Tax paid on the conversion
• Future RMDs and taxes avoided
• Medicare premiums
• Social Security taxation
• State taxes
• Lost growth on money used to pay the tax
• Survivor taxes
• Ending Roth and pretax balances after tax

The most effective plan may convert a large portion of the account, a small portion or nothing at all. What makes it a strategy is choosing the amount deliberately, measuring the secondary effects and repeating the analysis each year.

Official resources

• IRS: 2026 federal tax inflation adjustments
• IRS Publication 590-A: Contributions to IRAs
• IRS Publication 590-B: Distributions from IRAs
• IRS Publication 505: Tax Withholding and Estimated Tax
• IRS: Required minimum distributions
• CMS: 2026 Medicare premiums and IRMAA thresholds

Reviewed September 2026. This article provides general educational information, not individualized tax, investment or legal advice. Tax laws, Medicare thresholds and retirement-account rules can change. Consider reviewing a conversion plan with a qualified tax professional before acting.