Roth Conversion Strategy: Fill the Bracket, Skip IRMAA

A Roth conversion is a trade: you pay income tax on traditional IRA money now so it grows and comes out tax-free later, with no required minimum distributions. Whether that trade is good depends almost entirely on one comparison — your tax rate on the conversion today versus the rate those dollars would face later. A strategy is just a plan for converting only when that comparison is in your favor.

The gap years: your cheapest conversion window

For most retirees the best window opens when paychecks stop and closes when Social Security and RMDs start. Someone who retires at 63, delays Social Security to 70 and reaches RMD age at 75 has twelve years with unusually low taxable income. That's when conversions are cheapest.

Here's what that looks like on 2026 law. A married couple, both over 65, living on a $30,000 pension and $3,000 of interest, with Social Security not started yet, can convert about $115,300 in 2026 and still have their last dollar taxed at 12%. The federal tax on the conversion is about $11,600 — roughly 10%, because their deductions (a $32,200 standard deduction, the extra amount for age and the senior deduction) absorb the first part (IRS Rev. Proc. 2025-32).

Now start their Social Security at $48,000 a year and convert just $14,500. The tax on the conversion jumps to about 19% of it, because each converted dollar also makes more of their benefits taxable. Same couple, same bracket, nearly double the rate.

Three lines every conversion should respect

A conversion strategy is mostly about lines. Cross one by accident and the conversion costs far more than it looked like it would; stop just below it and you keep the low rate.

1. The top of your bracket. For married couples in 2026, the 12% bracket runs to $100,800 of taxable income and the 22% bracket to $211,400.
2. The IRMAA line two years out. A 2026 conversion counts toward 2028 Medicare premiums. The first projected 2028 line is about $230,000 Projected of joint MAGI — see the 2028 IRMAA brackets.
3. The Social Security "torpedo". Between the base amount and the point where 85% of benefits is taxable, each dollar of income can be taxed at almost twice your bracket (IRS Publication 915). The taxable Social Security calculator shows where your zone starts.

Should I Do a Roth Conversion? Five Yes Signs, Four No Signs

A conversion makes sense when today's rate is lower than tomorrow's and you can pay the tax without touching the IRA. Run through both lists; if you hit more "no" than "yes," skip it this year.

Five signs a conversion is likely worth it:

• You're in the gap years, before Social Security and RMDs.
• Your future RMDs look large enough to push you into a higher bracket or IRMAA.
• You're married and want to protect the survivor from single-filer brackets later — the "widow's penalty" shown on the qualifying surviving spouse calculator.
• You can pay the tax from savings outside the IRA.
• You'd like to leave tax-free money to heirs, who would otherwise have to empty an inherited IRA within 10 years, often in their peak-earning years.

Four signs to hold off:

• You'd have to pay the tax out of the IRA itself, shrinking what's left to grow.
• You expect to be in a clearly lower bracket later, for example after a planned move to a no-income-tax state.
• You might need the money within five years and are under 59½.
• The conversion would push you over an IRMAA line or into the torpedo zone for a small gain.

Paying the tax and the five-year rules

Paying the tax from a taxable account is what makes a conversion efficient: the full converted amount stays in the Roth. Make an estimated payment for the quarter you convert, or raise withholding elsewhere, to avoid an underpayment penalty.

Two five-year clocks apply. If you're under 59½, each conversion must sit five years before the converted amount comes out penalty-free. And earnings are tax-free only once your first Roth IRA has been open five years and you're 59½ (IRS Publication 590-B).

Conversions and your heirs

Who inherits your IRA changes the math. Most adult children who inherit a traditional IRA must empty it within 10 years, and if you had already started RMDs, they must also take yearly withdrawals along the way (IRS Publication 590-B). Those withdrawals often land in their highest-earning years, taxed at 24% or more.

An inherited Roth IRA follows the same 10-year deadline, but the withdrawals are tax-free. So a conversion at 12% that saves a child 24% later is a good trade even if you never spend the Roth yourself. A spouse who inherits can treat the IRA as their own, so the heir effect is strongest for single people and for couples planning the second estate.

The math runs the other way when heirs are in low brackets, or when the IRA is likely to go to charity — a qualified charity pays no income tax on an inherited traditional IRA, so converting money you plan to leave to charity wastes tax.

How much to convert each year

Most people do best converting a steady amount each year rather than one large conversion. A single big conversion usually lands in a higher bracket and over an IRMAA line; spreading the same total across the gap years keeps every dollar near your lowest rate.

A practical rhythm: run your projection in the fall, when you know most of the year's income, convert up to your chosen line in November or December, and repeat the next year. Conversions must be done by December 31, and since 2018 they can't be undone.

Market dips help. Converting shares after a decline moves more of them into the Roth for the same tax bill, and the recovery then happens tax-free. You don't need to time the bottom; a planned conversion that happens to land in a down month is simply a better deal.

Our take

Roth conversions are one of the few tax decisions retirees fully control, and the gap years are the time to use them. Convert steadily, to the top of a bracket you're unlikely to beat later, and stop short of IRMAA unless a bigger conversion clearly pays for the surcharge.

Start with your numbers on the Roth conversion calculator, and check what your future RMDs would be on the RMD calculator — they're the reason the conversion is worth doing at all. And if Medicare premiums are your main worry, read how to avoid IRMAA.