When to Do a Roth Conversion: When It Makes Sense in Retirement

Executive Summary

A Roth conversion may make sense when you expect to pay a higher tax rate on the money later than you would pay on the conversion today. In retirement, that often means the years between your last paycheck and the start of required minimum distributions, depending on individual circumstances. A conversion also means paying income tax now, and it cannot be undone.

This post covers the factors that tend to matter, a hypothetical illustration with round numbers, the limits and trade-offs, and the questions to bring to your CPA and advisor. For background, see Everything You Need to Know About the Roth IRA, Achieving Tax Bracket Equilibrium, and Which Retirement Account Should You Withdraw From First.

What a Roth conversion does

A Roth conversion moves money from a traditional IRA or similar pre-tax account into a Roth IRA. The amount you convert is generally added to your taxable income for the year, to the extent it has not already been taxed (IRS Publication 590-A). In exchange, qualified Roth distributions are generally not taxed later, and the original owner of a Roth IRA has no required minimum distributions during their lifetime (IRS). The Roth account can still lose value if its investments decline, and the tax you pay now is a certain cost. Whether the trade is worthwhile depends on the factors below.

The factors that tend to matter

Your current bracket compared with your expected future bracket

The core question is whether the tax rate on the conversion today is lower than the rate you expect to pay on the same money later. Many people have a stretch of lower taxable income after they stop working and before Social Security and required minimum distributions begin. That can leave room in a lower bracket. Future rates are uncertain, though, and your own income may turn out higher or lower than you expect. A conversion that looks favorable under one set of assumptions can cost more than waiting under another.

The years between retirement and required minimum distributions

Required minimum distributions (RMDs) from traditional IRAs generally begin at age 73 or 75, depending on your birth year, and an RMD for a given year cannot itself be converted (IRS). A longer window before RMDs begin gives you more years in which to spread conversions out. A shorter window gives you fewer. Roth conversions made in earlier years may also reduce the balance that later RMDs are calculated on, though that depends on the amounts and your other accounts.

Medicare premiums and the two-year look-back (IRMAA)

Medicare Part B and Part D premiums rise once your income passes set thresholds. This surcharge is called IRMAA, and Social Security generally bases it on your tax return from two years earlier. A Roth conversion raises your income in the year you make it, so it can affect your premiums two years later.

As of November 4, 2026, the Social Security Administration reports that 2026 premiums are based on 2024 modified adjusted gross income (MAGI). The standard 2026 Part B premium is $202.90 per month, and higher premiums apply when MAGI is above $109,000 for an individual return or above $218,000 for a joint return (SSA; CMS). These figures are for 2026 and are adjusted each year, so confirm the current thresholds before acting. If your income has dropped because you retired, Social Security allows you to request a new determination using a more recent year (SSA).

Paying the tax from non-retirement funds

Paying the conversion tax from a taxable bank or brokerage account generally leaves the full converted amount in the Roth. Paying it out of the converted money reduces what lands in the Roth, and if you are under age 59½ the portion withheld may be treated as an early distribution subject to additional tax. Whether you have non-retirement funds available for this, and whether you are comfortable using them, is part of the decision.

State income tax

Pennsylvania generally does not tax IRA distributions received at or after age 59½, according to the Pennsylvania Department of Revenue (PA Personal Income Tax Guide, as of November 4, 2026). The rules differ before 59½, and they differ in other states if you plan to move. For many Pennsylvania retirees this makes the federal tax picture the larger variable, but your CPA should confirm how your own situation is treated.

Your heirs' tax rates

Beneficiaries of Roth IRAs are generally subject to distribution rules after the owner's death, though qualified distributions are generally not taxed (IRS). If your heirs are likely to be in higher tax brackets than you are, converting during your lifetime may shift some of the tax cost to you at your rate. If they are likely to be in lower brackets, it may not. Estate plans, beneficiary designations, and family circumstances all affect this.

A hypothetical illustration

Hypothetical example for illustration only. The tax rates below are assumptions chosen for simple arithmetic, not current tax brackets, and no investment returns, growth, or projections are assumed. This is not a recommendation.

Suppose a retired household is considering converting $50,000 from a traditional IRA to a Roth IRA this year, and assumes its marginal federal rate on that amount would be 22%. The tax on the conversion would be $50,000 × 22% = $11,000, paid from a taxable savings account. Compare that with taking the same $50,000 out of the traditional IRA in a later year, under three assumed rates:

Scenario	Assumed rate	Tax on $50,000
Convert this year	22%	$11,000
Withdraw later, higher rate	24%	$12,000
Withdraw later, lower rate	12%	$6,000

In this simplified picture, converting costs less than waiting if the later rate is higher, and more than waiting if the later rate is lower. The illustration leaves out Medicare premium effects, the taxation of Social Security benefits, state tax, the cost of using savings to pay the tax, and your heirs' rates. Each of those can change the answer, which is why the decision rarely comes down to one number.

The limits and trade-offs

Higher taxable income now. The converted amount is generally added to your income for the year. A large conversion may move you into a higher bracket than you intended.
Possible effect on Medicare premiums. Higher income may raise your Part B and Part D premiums two years later if it crosses an IRMAA threshold.
Possible effect on Social Security taxation. Additional income in a conversion year may increase the portion of your Social Security benefits that is subject to income tax, depending on your overall income.
Conversions cannot be undone. Conversions made after 2017 cannot be recharacterized back to a traditional IRA (IRS Publication 590-A). If your income or the law changes after you convert, the tax is already owed.
Five-year rules and early withdrawals. If you are under 59½, withdrawing converted amounts within five years of the conversion may trigger an additional 10% tax unless an exception applies (IRS Publication 590-B).
Assets can still decline. Qualified Roth distributions are generally tax-free, but a Roth IRA holds investments that can lose value, and the tax paid on the conversion does not come back.

Questions to bring to your CPA and advisor

What is my projected taxable income for this year and the next several years, with and without a conversion?
How much room do I have in my current bracket before a conversion pushes me into the next one?
How would a conversion this year affect my Medicare premiums two years from now?
Which account will I use to pay the tax, and what are the trade-offs of using it?
When do my RMDs begin, and how large might they be if I do not convert?
How would a conversion affect the taxation of my Social Security benefits?
Given my beneficiaries and my estate plan, how might a conversion change what they inherit and what they owe?
Should I convert in one year or spread conversions over several, and what would need to change for me to stop?

Frequently asked questions

When is the best time to do a Roth conversion?

There is no single best time for everyone. Conversions are often considered in years when your taxable income is lower than it was before retirement or than it is expected to be later, such as after you stop working and before Social Security and RMDs begin. Because a conversion cannot be undone, many people model several years of income and taxes with their CPA and advisor before deciding.

Does a Roth conversion make sense in retirement?

It may, depending on your circumstances. Retirement can create years of lower income that leave room in lower brackets, and a Roth IRA has no lifetime RMDs for the original owner. Against that, you pay tax now, a larger income year can affect Medicare premiums and Social Security taxation, and the decision is permanent. If you expect your tax rate to be lower later, a conversion may cost more than waiting.

Is a Roth conversion for retirees worth it if I do not need the money?

It can depend on what you plan to do with the account. If the money is likely to pass to heirs, your tax rate compared with theirs matters. If you expect to spend it, the comparison is between the rate you pay on the conversion and the rate you would pay on withdrawals. Neither case is automatic, and your own projection is the better guide than a rule of thumb.

When does a Roth conversion not make sense?

A conversion may not make sense if you would need to use the converted funds to pay the tax, if it would push you into a much higher bracket or across a Medicare premium threshold, or if you expect your future tax rate to be lower than the rate on the conversion. It may also be a poor fit if you may need the money within five years and are under 59½.

What Roth conversion strategies are used for a 65-year-old retired person?

Some retirees convert smaller amounts over several years instead of one large amount, aiming to stay within a chosen tax bracket. Others time conversions for years before Social Security and RMDs begin, pay the tax from non-retirement funds, or keep income below a Medicare premium threshold. These approaches each have trade-offs, and at 65 a conversion also affects the income used for Medicare premiums two years later. Work through the specifics with your CPA and advisor.

Next step

If you would like to talk through how a conversion may fit your own situation, you can schedule an introductory conversation. I am also writing The Roth Conversion Playbook (Vol. 02 in the Wyze Library). It is not available yet, and you can join the list on the home page to be notified. You can also read how Roth conversion planning fits into Tax Planning.

Sources

All sources were reviewed as of November 4, 2026. Thresholds and limits change over time, so confirm current figures before acting.