The Roth Conversion Window: When It Makes Sense for Pre-Retirees
How the Roth conversion window works for pre-retirees: 2026 tax brackets, IRMAA, RMD age, the five-year rules, and spreading conversions over several years.
In this article
For many pre-retirees, the years between leaving full-time work and the start of required minimum distributions can be a planning window for Roth conversions. This guide covers 2026 brackets, IRMAA, RMD age, the five-year rules, and how to spread conversions over several years. Results depend on your tax situation and involve trade-offs.
Why the Conversion Window Matters
For decades of your working career, a Roth IRA may have been out of reach. High earned income pushed you above the contribution limits, and the tax deduction from a traditional 401(k) or IRA was too valuable to give up. So you did the right thing: you saved in pre-tax accounts and let those funds compound for years.
Now the calculus is changing. You are within five to ten years of retirement, or perhaps you have already left your primary career. Your earned income has dropped. Social Security has not started. Required Minimum Distributions are still years away. And your traditional IRA or 401(k) has grown substantially.
This is the Roth conversion window: the years when your taxable income is temporarily low, giving you an opportunity to move money from pre-tax accounts into a Roth IRA at a lower marginal tax rate than you faced during your peak earning years, and possibly lower than the rates that could apply once RMDs begin.
Used with care, this window may help reduce lifetime taxes, limit Medicare premium surcharges, and leave heirs a more tax-efficient inheritance. It is not permanent, and whether a conversion makes sense depends on your income, brackets, and plans, so it is worth reviewing on a schedule that fits your situation.
What a Roth Conversion Actually Is
A Roth conversion is straightforward in mechanics: you move funds from a traditional IRA (or roll over a pre-tax 401(k) into a traditional IRA first, then convert) into a Roth IRA. The converted amount is included in your gross income for the year as ordinary income and taxed at your marginal rate. In exchange, those funds now sit in a Roth IRA where they grow tax-free and are never subject to RMDs during your lifetime.
There is no income limit for conversions. Anyone with a traditional IRA can execute a traditional IRA to Roth conversion, regardless of income. This is sometimes called the “backdoor Roth” strategy when used by high earners who cannot contribute directly, but for pre-retirees in the conversion window, it is simply a direct transfer executed with your IRA custodian.
Traditional IRA vs. Roth IRA: Key Differences at a Glance
Before modeling whether a conversion makes sense for your situation, it helps to see the two account types side by side. The table below summarizes the core tax treatment differences that drive the Roth conversion decision.
| Feature | Traditional IRA / 401(k) | Roth IRA |
|---|---|---|
| Contributions | Pre-tax (reduces taxable income in the contribution year, subject to income and participation rules) | After-tax (no deduction; income limits apply for direct contributions, but there is no limit for conversions) |
| Growth | Tax-deferred (no tax on dividends, interest, or gains while inside the account) | Tax-free (qualified earnings grow and are withdrawn free of federal income tax) |
| Withdrawals in Retirement | Fully taxable as ordinary income at your marginal rate in the year of withdrawal | Tax-free for qualified distributions (account open ≥5 tax years; owner age 59½ or older) |
| Required Minimum Distributions (RMDs) | Required beginning at age 73 or 75, depending on birth year, whether you need the income or not; RMDs are taxable | No RMDs during the original owner’s lifetime; assets can grow tax-free indefinitely or be passed to heirs |
| Estate / Inheritance | Heirs pay ordinary income tax on inherited distributions (10-year rule for most non-spouse beneficiaries under SECURE 2.0) | Heirs generally receive distributions income-tax-free (10-year rule applies, but the distributions themselves are not taxable) |
| IRMAA / Medicare Impact | Withdrawals count toward MAGI, which drives Medicare Part B and D premium surcharges | Qualified withdrawals do not count toward MAGI, so they do not increase Medicare premium surcharges |
Evaluating Whether a Roth Conversion Makes Sense
The Roth conversion decision is not a one-size-fits-all rule of thumb. It is a calculation that requires looking at your actual situation across multiple dimensions.
Current vs. Expected Future Tax Brackets
The core question in any Roth conversion tax bracket analysis is: are you in a lower bracket today than you expect to be when you start taking distributions?
For many pre-retirees, the answer may be yes, but the size of the gap matters. If you are currently in the 22% federal bracket and project that RMDs plus Social Security could push you into the 24% or 32% bracket later in retirement, a conversion at 22% today may reduce the tax paid on each converted dollar. If your future bracket will be roughly the same as today, the tax-rate benefit is less clear-cut, though Roth accounts can still offer estate planning and RMD flexibility advantages.
A thorough analysis models:
- Your projected RMDs from your RMD start age forward, based on current account balances and reasonable growth assumptions.
- Social Security income and at what income levels your benefits become taxable (up to 85% of benefits can be taxable once your “combined income” exceeds IRS thresholds). How your Social Security claiming age fits into this picture matters too; see our Social Security claiming strategy guide for a closer look.
- Any pension or part-time income that will continue into retirement.
- Your available bracket space today: how much additional taxable income can you recognize before crossing into the next federal bracket?
Getting these projections right takes tax-return-level modeling, not a quick calculator estimate. A conversion that is slightly too large can move you into the next federal bracket or across an IRMAA tier, which can raise Medicare premiums two years later.
2026 Federal Tax Brackets: How Much Conversion Room Do You Have?
Knowing exactly where your current bracket ends is the starting point for sizing a conversion. Under the rates that apply for the 2026 tax year, following the One, Big, Beautiful Bill Act’s extension of the current rate structure, the federal brackets are as follows.
| Marginal Rate | Single Filers | Married Filing Jointly |
|---|---|---|
| 10% | $0 to $12,400 | $0 to $24,800 |
| 12% | $12,401 to $50,400 | $24,801 to $100,800 |
| 22% | $50,401 to $105,700 | $100,801 to $211,400 |
| 24% | $105,701 to $201,775 | $211,401 to $403,550 |
| 32% | $201,776 to $256,225 | $403,551 to $512,450 |
| 35% | $256,226 to $640,600 | $512,451 to $768,700 |
| 37% | Over $640,600 | Over $768,700 |
The 2026 standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly, per the same IRS guidance. It reduces taxable income before the brackets apply, so it affects how much room remains in each bracket. Knowing these breakpoints, alongside your other projected income for the year, is what allows a conversion to be sized carefully instead of estimated.
Bracket Spread: Comparing Today's Rate With Your Expected Later Rate
The term “bracket arbitrage” describes converting pre-tax savings today at a lower marginal rate than the rate those dollars might face if left in the IRA until RMDs begin. The size of that gap, not just its existence, helps determine whether a conversion is worth considering.
| If your expected later rate is... | What it may suggest | What else to weigh |
|---|---|---|
| Higher than today's rate | Converting now may lower the tax paid on those dollars over time | IRMAA, Social Security taxation, and state tax can change the result |
| About the same as today's rate | The tax-rate benefit alone is small | RMD reduction, estate planning, and flexibility may carry more weight |
| Lower than today's rate | A conversion may increase lifetime taxes | Other goals, such as heirs' tax treatment, may still be relevant |
| Uncertain because of possible law changes | Spreading conversions over several years can diversify the timing | Review the plan each year as rules and income change |
When the gap is wide, a conversion may accomplish more. When it is narrow, the decision depends more on the other dimensions covered below. A personalized analysis with your own numbers is the way to test which row applies to you.
RMD Planning: Modeling the Distributions Conversions Are Designed to Reduce
A Roth conversion is often aimed at reducing the size of the mandatory distributions you would otherwise face later. Required Minimum Distributions are calculated by dividing your prior year-end traditional account balance by a life expectancy factor from the IRS Uniform Lifetime Table. A larger balance at your RMD start age means a larger required distribution, whether or not you need the income that year.
Your RMD start age depends on your birth year. Under SECURE 2.0, it is generally age 73 for people born from 1951 through 1958 and age 75 for people born in 1960 or later. People born in 1959 fall between the two rules, so confirm current IRS guidance for your situation. If you are five to ten years from retirement today, your start age may well be 75, which can lengthen your conversion window.
| Age | Life Expectancy Factor | Approx. % of Balance Withdrawn |
|---|---|---|
| 73 | 26.5 | 3.8% |
| 75 | 24.6 | 4.1% |
| 78 | 22.0 | 4.5% |
| 80 | 20.2 | 5.0% |
The table shows why balance matters. A smaller traditional IRA balance at your RMD start age divides into a smaller required distribution, which in turn affects the bracket the RMD lands in, how much of your Social Security becomes taxable, and whether an IRMAA tier is triggered. The effect repeats every year RMDs continue. Modeling this with your actual balances and growth assumptions is part of a personalized analysis.
IRMAA: The Medicare Premium Surcharge Cliffs
One of the most commonly overlooked parts of Roth conversion strategy planning is Medicare's Income-Related Monthly Adjustment Amount, or IRMAA. Under IRMAA, your Medicare Part B and Part D premiums are not flat rates. They can increase in steps based on your Modified Adjusted Gross Income (MAGI) from two years earlier.
Income you recognize during your conversion window can therefore affect your Medicare premiums two years later. A larger conversion in your 60s may trigger a surcharge in your early 70s, and the extra cost can add up across a couple over several years.
The stair-step structure means precision matters, because crossing a threshold by even a small amount can trigger the surcharge for that tier. A conversion analysis that does not explicitly model IRMAA thresholds is incomplete. Check current thresholds before each conversion year, because they are adjusted periodically.
Net Investment Income Tax (NIIT) Thresholds
If your MAGI exceeds $200,000 (single) or $250,000 (married filing jointly), net investment income (interest, dividends, and capital gains) may be subject to an additional 3.8% Net Investment Income Tax. Roth conversions increase your MAGI, which can pull otherwise below-threshold investment income into NIIT exposure. For pre-retirees with substantial taxable brokerage income, this interaction deserves explicit modeling. Our year-end guide to the Net Investment Income Tax explains how it works.
Market Timing: Converting When Account Values Are Temporarily Down
The tax owed on a conversion is based on the dollar value moved into the Roth, not on what that value does afterward. That mechanical fact creates an opportunity worth understanding, separate from any attempt to predict where markets are headed. If your traditional IRA is temporarily down in value, for example after a market pullback, converting the same target dollar amount moves more shares or units into the Roth for the same tax bill. If those holdings later recover, that recovery happens inside the Roth and is never taxed again. If they do not recover on the timeline you expected, the conversion still accomplished its purpose of reducing the traditional IRA balance and the RMDs tied to it; the tax cost simply reflected the account’s value on that particular day.
This is a reason some pre-retirees choose to accelerate a planned conversion during a down period within their multi-year schedule, not a reason to guess at market direction or delay conversions while waiting for a decline. A conversion plan built around your tax brackets and income projections should be the anchor; opportunistic timing within that plan is a secondary refinement, not the primary strategy. Our guide to retirement portfolio strategies for market downturns covers how conversions fit alongside withdrawal planning.
Partial vs. Full Conversions: Two Different Decisions
Converting an entire traditional IRA balance in a single year is possible, but for many pre-retirees with substantial balances it may not be the right approach. A full conversion recognizes the entire balance as income in one year, which may push a large portion of it through higher brackets, may trigger higher IRMAA tiers for at least one Medicare cycle, and may use up lower-bracket space that would have been available in future years of the window. A partial, laddered conversion spreads the same total amount across several years, filling a target bracket each year.
| Dimension | Full, Single-Year Conversion | Partial, Multi-Year Conversion |
|---|---|---|
| Tax bill timing | One large bill due in a single tax year | Smaller bills spread across several years |
| Bracket impact | Likely to cross into higher brackets on a large portion of the balance | Can be sized each year to stay within a target bracket |
| IRMAA exposure | High: a single-year MAGI spike can cross multiple surcharge tiers | Lower: annual sizing can be modeled to manage MAGI relative to thresholds |
| RMD elimination | Immediate and complete for the converted account | Gradual, phased in over the length of the conversion window |
| Planning complexity | Lower: one transaction, but a materially higher upfront tax cost | Higher: requires annual income modeling coordinated with your tax return |
For many pre-retirees with meaningful traditional IRA balances, a partial approach sized to available bracket space each year may be worth considering over either doing nothing or converting everything at once. A full conversion can occasionally make sense for a smaller account balance, or for an account holder with a short time horizon before RMDs begin, but that determination should follow a full projection and not a general rule.
The Five-Year Rules: Two Different Clocks
Roth IRAs are governed by two separate five-year rules, and the conversion window is exactly when the distinction matters most. The first is the rule on earnings: to withdraw earnings tax-free, your first Roth IRA must have been open for at least five tax years and you must be age 59½ or older. The second is the rule on each individual conversion: the converted principal from each conversion must remain in the Roth for five years before it can be withdrawn without a 10% penalty, unless you are already 59½ or older, in which case this second rule generally does not apply to you.
For most pre-retirees in the conversion window who are past 59½, the conversion-specific five-year clock is not a practical obstacle since the penalty exception already applies. The earnings clock is the one to watch if you are opening your very first Roth IRA as part of this strategy: it starts on January 1 of the year of your first contribution or conversion, so opening that account earlier in the window, even with a modest initial conversion, starts the clock sooner rather than later.
New York State Tax Considerations
For our clients on Long Island, in Manhattan, and throughout the New York metro area: New York State taxes Roth conversions as ordinary income at state rates. A conversion that looks cost-effective at the federal level may cost more in total once state tax is included. If you plan to move to a state without an income tax in retirement, the timing of a conversion relative to your move may be worth evaluating with your tax professional.
Common Roth Conversion Mistakes
The conversion window is an opportunity, but it is possible to execute it poorly. Here are the most common mistakes we see:
Converting Too Much in One Year
The most frequent error is converting too aggressively in a single year without modeling the full tax impact. A large conversion can:
- Push you from the 22% to the 24% (or higher) federal bracket, reducing the tax efficiency of the conversion.
- Trigger an IRMAA tier that raises your Medicare premiums for the following two years.
- Cause more of your Social Security benefits to become taxable.
- Subject more of your investment income to the 3.8% NIIT.
Many households spread conversions across multiple years, filling the current bracket carefully each year, instead of attempting a large one-time conversion.
Paying the Tax Bill From Inside the IRA
If you withhold funds from the IRA itself to cover the conversion tax, you reduce the amount that actually lands in the Roth, and you lose the long-term benefit of those withheld dollars growing tax-free. Paying the conversion tax from a taxable brokerage account or other non-retirement savings generally allows the full converted amount to move into the Roth. If you are under age 59½, withholding from the IRA to pay the tax can also trigger a 10% penalty on the withheld portion.
Ignoring the Five-Year Rule
Roth IRAs have two five-year rules, and confusing them is a common source of errors. Each conversion begins its own five-year clock for penalty-free access to that specific converted amount (for those under 59½). The separate five-year rule on Roth IRA earnings requires the account to have been open at least five tax years before earnings can be withdrawn tax-free. For most pre-retirees converting in their 60s, the penalty issue is less pressing, but if you are opening a Roth IRA for the first time as part of this strategy, the earnings five-year clock starts now and is worth factoring into your planning timeline.
Converting Without a Multi-Year Plan
A Roth conversion executed without a multi-year projection is guesswork. Whether conversions make sense, and how much to convert each year, depends on your full income picture: expected Social Security timing, projected RMD amounts, capital gains plans, charitable giving, and possible changes in tax law. Converting year by year without a coordinated roadmap can lead to bracket and IRMAA results that a plan might have avoided.
What a Multi-Year Roth Conversion Ladder Might Look Like
One way to use the conversion window is to spread conversions across several years, filling a lower bracket each year instead of converting a lump sum. The table below describes the phases a typical ladder moves through. It uses no dollar figures because the right amounts depend on your balances, income, and tax picture.
| Phase | Typical income picture | Planning considerations |
|---|---|---|
| Early window: after leaving full-time work, before Medicare | Earned income is lower; investment income or part-time income may remain | Fill available lower-bracket space; pay the tax from taxable savings, not the IRA; if you buy health coverage before Medicare, check how MAGI affects premium credits |
| Medicare years, before Social Security | Income remains relatively low | IRMAA looks back two years, so each year's conversion is sized against the thresholds that will apply later |
| Approaching Social Security | Income is about to rise as benefits begin | Conversion space may narrow; consider how benefits become taxable and how the claiming age interacts with the ladder |
| Social Security begins | Benefits plus other income | Conversions may be reduced or paused; the math is re-evaluated each year |
| RMD years | Benefits plus required distributions from the remaining traditional balance | A smaller traditional balance may mean smaller required distributions, which is the long-term aim of the ladder |
Because conversions in earlier phases may reduce the traditional IRA balance, the required distributions in later phases may be smaller than they otherwise would have been. Whether that result is worth the tax paid along the way depends on each household's numbers, which is why the analysis is done with your own figures. For a broader look at managing income between career and RMDs, see our guide to managing tax brackets before RMDs.
Why Coordinated Planning and Tax Preparation Matter
Roth conversion analysis is a clear example of why financial planning and tax preparation work well together.
A conversion decision is not simply a financial planning question (“does the math work over 20 years?”). It is also a tax question that depends on your current-year AGI, your itemized versus standard deduction, your capital gains, your MAGI relative to IRMAA thresholds, and your state income tax position, all at once. Without the actual tax picture in front of them, a financial planner is estimating. Without the long-term projection, a tax preparer is optimizing only for this year.
At United Financial Planning Group, our team of CFP® professionals, CPAs, and Enrolled Agents works side by side on this kind of analysis. We build multi-year conversion models from tax-return-level detail: your specific account balances, expected income sources, IRMAA thresholds, NIIT exposure, and New York State tax impact, modeled together so each year's conversion can be reviewed against the whole picture.
Because our advisors work alongside our tax professionals, the conversion amounts we plan in the spring can be reviewed against your tax return in the winter, and adjusted as your income picture changes. We are a fee-only fiduciary. No commissions, ever. You can also learn more about our tax planning service.
Is This the Right Time for You?
The conversion window is time-limited by definition. Once RMDs begin, your annual taxable income rises mechanically, and once Social Security starts, your combined income rises too. That does not mean you should act quickly. It means the years available to you are worth mapping out on a timeline that fits your situation.
The question is not only whether Roth conversions can be valuable. It is how much to convert, in which years, and how to coordinate it with the rest of your income, tax, and investment picture. That is where the planning work happens. If you are within five to ten years of retirement, or have already stopped working, you may want to have that analysis done. Learn more about our approach to tax planning and retirement planning.
Let's Start With a Conversation
We serve clients in Hauppauge, Manhattan, Lake Success, and throughout New York, as well as clients nationwide who value integrated planning. In a first conversation, we can review your current account structure, talk through your projected RMDs and Social Security income, and discuss whether a multi-year Roth conversion approach fits your situation.
No sales pitch. No obligation. Contact United Financial Planning Group whenever you are ready.
Sources
- IRS, Tax inflation adjustments for tax year 2026 (Revenue Procedure 2025-32), October 9, 2025
- IRS, Retirement topics: Required minimum distributions
- Congressional Research Service, Required Minimum Distribution (RMD) Rules for Original Owners
Sources reviewed September 29, 2026. Tax rules, brackets, and thresholds can change.
Disclosures
This article is provided for general educational and informational purposes only and does not constitute personalized financial, tax, investment, or legal advice. Roth conversion analysis involves complex variables specific to each individual’s income, tax bracket, account balances, state of residence, and long-term financial goals. Tax laws, Medicare premium schedules, IRMAA thresholds, and RMD rules are subject to change. The examples and scenarios described are for illustrative purposes only and should not be relied upon as a projection or guarantee of results. Please consult a qualified financial advisor and tax professional regarding your specific circumstances before making any decisions.
Frequently Asked Questions
- What is a Roth conversion and how does it work?
- A Roth conversion moves money from a traditional IRA (or other pre-tax retirement account) into a Roth IRA. The converted amount is added to your taxable income in the year of the conversion and taxed at your ordinary income rate. In exchange, the funds may grow tax-free inside the Roth IRA and are not subject to Required Minimum Distributions during the original owner's lifetime. Qualified withdrawals are generally free of federal income tax.
- What is the Roth conversion window for pre-retirees?
- The conversion window is the period between leaving full-time work, or significantly reducing earned income, and the start of Required Minimum Distributions and Social Security benefits. During this period, some pre-retirees are in a lower tax bracket than during their peak earning years and possibly lower than the bracket they expect once RMDs begin. Whether a conversion makes sense depends on your income, brackets, and plans.
- At what age do Required Minimum Distributions start?
- Under SECURE 2.0, the RMD starting age is generally 73 for people born from 1951 through 1958 and 75 for people born in 1960 or later. People born in 1959 fall between the two rules, so confirm current IRS guidance for your situation. Your start age affects how long your conversion window may be.
- What is IRMAA and how does it affect Roth conversion planning?
- IRMAA stands for Income-Related Monthly Adjustment Amount. It is a surcharge added to Medicare Part B and Part D premiums for beneficiaries whose Modified Adjusted Gross Income (MAGI) exceeds certain thresholds. Because IRMAA is based on income from two years earlier, a Roth conversion that pushes MAGI above a threshold can raise Medicare premiums later. The surcharges work in steps, so conversions are typically sized with the current thresholds in view.
- What is the Roth five-year rule?
- There are two five-year rules for Roth IRAs. The first applies to earnings: to take qualified, tax-free withdrawals of earnings, the account must have been open for at least five tax years and the owner must be age 59½ or older. The second applies to each conversion: converted funds generally must stay in the Roth for five years before withdrawal to avoid the 10% early withdrawal penalty if the owner is under 59½. For owners already over 59½, the conversion penalty rule is generally less of a concern, but the earnings rule still matters when opening a first Roth IRA.
- Should I pay Roth conversion taxes from my IRA or from outside funds?
- Paying the tax from outside the IRA, such as from a taxable brokerage account or savings, generally allows the full converted amount to move into the Roth. Withholding tax from the IRA itself reduces the amount converted and, if you are under age 59½, may trigger a 10% early withdrawal penalty on the withheld portion. The right choice depends on your situation.
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