Roth Conversions in Your 60s: Why the Math Often Wins

Roth Conversions in Your 60s: Why the Math Often Wins

The useful question is which dollars to convert, and when

September 19, 2026

The years between a final paycheck and required minimum distributions can offer a valuable planning window. A Roth conversion moves money from a traditional IRA to a Roth IRA and generally adds the taxable portion to income in the conversion year. In exchange, qualified Roth distributions can later be tax-free, and the original owner has no lifetime Roth IRA RMD. Whether the trade works depends on today's full tax cost versus the future taxes and flexibility it may avoid.^1,2

Measure the cost of the next conversion dollar

For 2026, the federal 22% bracket for a married couple filing jointly runs from $100,800 to $211,400 of taxable income; the 24% bracket begins above $211,400. Those are marginal brackets, so crossing the line does not reprice all prior income.³

Suppose a hypothetical couple in their early 60s projects $160,000 of 2026 taxable income before any conversion, has a wholly pre-tax traditional IRA, and has no deductions, credits, surtaxes, or state tax changes caused by the conversion. There is $51,400 of 22% bracket room. Converting $80,000 would put $51,400 at 22% and $28,600 at 24%, for $18,172 of incremental federal income tax. Figure 1 breaks down that calculation. It is an illustration of marginal tax cost, not a projection of lifetime savings.³

Why the timing can be attractive

A conversion may help when current marginal tax cost is below the rate expected on later IRA withdrawals, when future RMDs may compress other income choices, or when a family wants more tax-free withdrawal capacity. Paying the tax from outside the IRA can preserve more of the converted balance, but it uses cash that might have another purpose. A long time horizon helps; a near-term need for the converted funds can weaken the case.

The answer can change if a conversion raises Medicare income-related premiums, affects credits, increases state tax, or interacts with capital gains and other income. Medicare generally uses tax return information from two years earlier to determine income-related premium adjustments. We would model those effects before picking an amount.⁴

Know the operational limits

A required minimum distribution is not eligible for Roth conversion; in an RMD year, take the required amount first. A conversion of pre-tax IRA money is taxable even if the transfer occurs directly between custodians. Traditional IRA basis can make part of a conversion nontaxable, but the aggregation and reporting rules must be respected. A conversion made after 2017 generally cannot be recharacterized back to a traditional IRA.^1,2,5

This strategy may be a poor fit when the current marginal rate is unusually high, cash to pay the tax is scarce, the future tax rate is likely lower, or a near-term withdrawal would run into Roth qualification rules. Coordinate the tax return details with your CPA and the account transfer with the custodian.

Closing

I would compare several conversion amounts each year, including zero. The best amount often fills a useful tax band without triggering costs that exceed the longer-term benefit. Document the assumptions and revisit the decision annually as income, law, and retirement timing change.

All my best,

Brandon VanLandingham, CFA, CMT, CFP
Founder / CIO

Citations

1. IRS, Publication 590-B (2025), Roth conversion and distribution rules, accessed September 18, 2026. https://www.irs.gov/publications/p590b
2. IRS, "Retirement plan and IRA required minimum distributions FAQs," accessed September 18, 2026. https://www.irs.gov/retirement-plans/retirement-plan-and-ira-required-minimum-distributions-faqs
3. IRS, "IRS releases tax inflation adjustments for tax year 2026," October 9, 2025, accessed September 18, 2026. https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill
4. Medicare, "How income affects your premiums," accessed September 18, 2026. https://www.medicare.gov/publications/11469-income-and-drug-premiums.pdf
5. IRS, "Instructions for Forms 1099-R and 5498 (2026)," accessed September 18, 2026. https://www.irs.gov/instructions/i1099r

Important Disclosures

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