Best and Worst Times for a Roth Conversion

Deciding to do a Roth conversion is step one. Deciding when to do it can save—or cost—you thousands.

Not sure if a Roth conversion is right for you? Start with our 5-question decision guide first.

This guide covers the timing question: when life circumstances make conversions most valuable, and when you should wait.

Best Times to Convert

Early Retirement (Before Social Security)

If you retire before claiming Social Security, you may have several years of unusually low income. This is prime conversion territory.

Age	Typical Income Sources	Why It's Good for Conversions
55-61	Savings, maybe part-time work	Very low taxable income
62-66	Savings, optional early SS	Still relatively low income
67+	Full Social Security + RMDs	Income rises, window closes

Example: A couple retires at 60 with $40,000/year from taxable savings. They're in the 12% bracket. They can convert up to $56,950 more (filling the 12% bracket) at historically low rates before Social Security and RMDs push them higher.

Did You Know?

The years between leaving work and starting Social Security are often called the "golden years" for Roth conversions. Don't waste them.

Gap Years Between Jobs

Lost your job? Taking a sabbatical? Starting a business with no income yet?

Low-income years are conversion opportunities. You're temporarily in a lower tax bracket than your career average.

Situation	Tax Bracket Opportunity
Laid off, job searching	May drop 1-2 brackets
Sabbatical or career break	Often 12% or lower
New business, early losses	Potentially 10-12%
One spouse stops working	Combined income drops

Important: Conversions must be done by December 31 of the tax year. If you expect income to rebound next year, convert before year-end.

Large Traditional IRA Balance

If you have a large traditional IRA, you'll face large required minimum distributions (RMDs) starting at age 73.

IRA Balance at 73	Approximate First-Year RMD
$500,000	$18,900
$1,000,000	$37,700
$2,000,000	$75,500

Based on IRS Uniform Lifetime Table for age 73.

Large RMDs can:

Push you into higher tax brackets
Trigger Medicare premium surcharges (IRMAA)
Make up to 85% of your Social Security taxable

Strategy: Convert portions of your traditional IRA before 73 to reduce future RMD amounts. Spreading conversions across multiple years often works best.

Expecting a Pension or Inheritance

If you know income is coming—a pension kicking in, an inheritance, a spouse's Social Security—consider converting now while your income is lower.

Future Income Event	Action
Pension starting next year	Convert this year
Spouse claiming SS at 70	Convert before they claim
Expected inheritance	Convert before it arrives
Selling a business	Convert before the sale year

The principle: Pay taxes at today's low rate, not tomorrow's higher rate.

Worst Times to Convert

Peak Earning Years

If you're in the 32%, 35%, or 37% bracket now, you're paying top-tier rates. Unless you expect to stay there in retirement (unlikely for most), wait for a lower-income year.

Your Current Bracket	Convert Now?
10-12%	Yes — historically low
22%	Usually yes — still favorable
24%	Maybe — depends on retirement expectations
32%+	Usually no — wait for retirement

Need the Money Within 5 Years

Roth conversions have a 5-year holding rule. If you withdraw converted funds before 5 years and before age 59½, you'll owe a 10% penalty on the earnings.

Your Age	Time Until You Need Funds	Convert?
Any age	Less than 5 years	Probably not
Under 59½	5+ years	Yes, if other factors align
Over 59½	Anytime	5-year rule is less critical

Note: After age 59½, the 5-year rule only applies to earnings, not the converted principal. The rule is more forgiving for older converters.

Can't Pay Taxes From Outside Funds

If you have to use IRA money to pay the conversion tax, you're undermining the strategy.

Example of what NOT to do:

Convert $100,000 from traditional IRA
Owe $22,000 in taxes
Pay taxes by withdrawing another $22,000 from IRA
If under 59½: owe 10% penalty ($2,200) on top

Result: You converted less than you thought and may have triggered penalties.

The Medicare Factor (IRMAA)

If you're 63 or older, Roth conversions require extra planning. Conversions increase your Modified Adjusted Gross Income (MAGI), which Medicare uses to calculate your premiums.

What Is IRMAA?

IRMAA (Income-Related Monthly Adjustment Amount) is a surcharge added to standard Medicare premiums for higher-income beneficiaries.

Key fact: Medicare uses your income from two years ago. Your 2026 income determines your 2028 premiums.

2026 IRMAA Thresholds

MAGI (Married Filing Jointly)	Part B Monthly Premium	Part D Surcharge	Annual Extra Cost
≤$218,000	$202.90	$0	$0 (standard)
$218,001-$272,000	$284.10	$14.50	$1,946/couple
$272,001-$326,000	$405.50	$37.40	$5,750/couple
$326,001-$410,000	$527.00	$60.30	$9,540/couple
$410,001-$750,000	$648.40	$83.20	$13,340/couple
>$750,000	$689.90	$91.00	$14,340/couple

Source: Medicare.gov. Annual costs assume both spouses on Medicare.

The IRMAA Cliff Problem

IRMAA thresholds are cliffs, not slopes. Going $1 over triggers the full surcharge.

MAGI	IRMAA Cost	Effective Tax on That $1
$218,000	$0	22% (federal tax only)
$218,001	$1,946	194,622% (tax + IRMAA)

Did You Know?

For clients near IRMAA thresholds, it's often better to convert less and stay under the cliff than to convert a little more and trigger nearly $2,000 in Medicare surcharges.

Smart IRMAA Strategies

Strategy	How It Works
Convert aggressively before 63	Your 60-62 income doesn't affect Medicare
Spread conversions over multiple years	Stay under threshold each year
Monitor MAGI carefully	Include all income sources in calculations
Consider "IRMAA-free" conversion room	Calculate exactly how much room you have

Common Questions

Can I undo a conversion if I change my mind?

No. Before 2018, the IRS allowed "recharacterization" of conversions. The Tax Cuts and Jobs Act eliminated this option. Conversions are now permanent.

Do I have to convert everything at once?

No. You can convert any amount, at any time, as many times as you want. Many people convert a portion each year ("partial conversions") to stay within a specific tax bracket.

What if I'm still working?

You can still convert, but your earned income may put you in a higher bracket. Consider:

Converting in a year you change jobs
Converting if you have a low-bonus year
Waiting until retirement for larger conversions

Is there an income limit for conversions?

No. Unlike Roth IRA contributions (which phase out at higher incomes), there's no income limit for conversions. Anyone can convert, regardless of income. This is sometimes called the "backdoor Roth" strategy.

When is the deadline to convert?

December 31 of the tax year. Unlike IRA contributions (which can be made until April 15), conversions must be completed by year-end to count for that tax year.

How do I report a conversion on my taxes?

You'll receive a Form 1099-R from your IRA custodian showing the conversion amount. You'll also file Form 8606 to calculate any non-taxable portion (if you had nondeductible contributions).

The Bottom Line

Your Situation	Timing Recommendation
Early retirement before SS	Convert now — low-income window
Between jobs	Convert this year
Large IRA, under 73	Convert gradually over several years
Age 63+, near IRMAA threshold	Convert carefully, stay under cliffs
Peak earning years	Wait for retirement
Need money within 5 years	Probably wait

Timing a conversion well can save you thousands. The best time is often when your income is temporarily low—early retirement, career transitions, or the years before Social Security and RMDs begin.

RetireArc's Roth Conversion Calculator can model your specific situation across multiple years, showing exactly when and how much to convert for maximum tax savings.

Sources

Last updated: February 2026. Tax rules and Medicare thresholds change annually. Verify current information at irs.gov and medicare.gov.