Retirement tax window
Roth Conversions in the Retirement Tax Window: Model the Interaction, Not Just the Tax Bracket
The years after wages stop but before Social Security and required distributions fully shape taxable income can deserve analysis. A Roth conversion can be one tool—but it creates taxable income today.
Quick answer: A Roth conversion moves money from a traditional IRA or eligible plan into a Roth account. The converted pre-tax amount is taxable in the year of the conversion, and since 2018 a conversion cannot be undone. Converting in lower-income years, after the paycheck stops and before Social Security and RMDs, can reduce future taxable income. But it raises income now, which can affect Marketplace credits, Medicare premiums, the senior deduction and Social Security taxation. Model the whole picture before you convert.
The basic rules
- Taxable now. Pre-tax amounts converted are included in ordinary income for that year. After-tax basis in a traditional IRA (tracked on Form 8606) is not taxed again, but the pro-rata rule spreads basis across all your traditional, SEP and SIMPLE IRAs.
- No undo. Conversions made in 2018 or later cannot be recharacterized back to a traditional IRA.
- Deadline. A conversion counts in the calendar year it is completed. There is no April extension like there is for contributions.
- No 10% tax on the conversion itself. But if you are under 59½, withdrawing converted amounts within five years can trigger the 10% additional tax, and each conversion has its own five-year period.
- No lifetime RMDs from Roth IRAs. Since 2024, designated Roth accounts in employer plans also have no lifetime RMDs.
- RMDs come first. In a year you must take an RMD, that amount cannot be converted.
Why the retirement window can be different
For many households, the years after wages stop and before Social Security and RMDs begin are the lowest-income years of their adult lives. Later, Social Security, RMDs at 73 or 75, and possibly a survivor filing as single, can push taxable income back up. Converting some pre-tax money in the low years is a way to “fill” lower brackets now instead of facing higher brackets later. Whether that saves tax over a lifetime depends on future tax rates, which no one knows. That is why conversions are a modeling question, not a rule.
A worked illustration with 2026 figures
Hypothetical A married couple, both 66, files jointly in 2026. Neither has claimed Social Security. They have a $30,000 pension and withdraw $20,000 from a traditional IRA. They are on Medicare. All amounts are invented for illustration and do not reflect any real household or recommend any action.
| Line | No conversion | With $98,300 conversion |
|---|---|---|
| Pension + IRA withdrawal | $50,000 | $50,000 |
| Roth conversion | $0 | $98,300 |
| Income (also MAGI here) | $50,000 | $148,300 |
| Standard deduction ($32,200) + age-65 additions ($1,650 × 2) | −$35,500 | −$35,500 |
| Senior deduction ($6,000 × 2; MAGI under $150,000, so no phase-out) | −$12,000 | −$12,000 |
| Taxable income | $2,500 | $100,800 (top of the 12% bracket) |
| Approximate federal income tax | $250 | $11,600 |
In this illustration, converting $98,300 adds about $11,350 of federal tax, an average of roughly 11.5% on the converted amount. The conversion was sized so that MAGI stays just under the $150,000 point where the joint senior deduction begins to phase out. Several cautions apply. The senior deduction is scheduled only for tax years 2025 through 2028. Income in 2026 also sets the couple's 2028 Medicare premiums through IRMAA, and the 2026 joint threshold is $218,000. Paying the tax from outside savings, rather than from the IRA, keeps more money in the Roth but uses cash. And future tax law could make the comparison look better or worse.
Thresholds a conversion can cross
| Rule | 2026 threshold | Effect of crossing it |
|---|---|---|
| Federal tax brackets | 12% bracket ends at $50,400 single / $100,800 joint taxable income | The next dollars are taxed at 22% |
| Marketplace premium tax credit (under 65) | 400% of poverty: $62,600 single / $84,600 for two | Credit generally lost entirely for 2026 coverage |
| Medicare IRMAA (two-year look-back) | Above $109,000 single / $218,000 joint (2026 premiums use 2024 MAGI) | Higher Part B and Part D premiums two years later |
| Senior deduction phase-out (65+, 2025–2028) | MAGI over $75,000 single / $150,000 joint | Deduction reduced by 6% of the excess |
| Social Security taxation | Combined income over $25,000/$34,000 single, $32,000/$44,000 joint | More of your benefit becomes taxable |
| 0% long-term capital-gain rate | Taxable income up to $49,450 single / $98,900 joint | Gains above that are taxed at 15% |
Questions to model before converting
- What are my expected marginal rates now, in my RMD years, and for a surviving spouse?
- Which threshold in the table above am I closest to this year?
- Will I pay the tax from outside savings? Do I have the cash?
- How does a conversion compare with no conversion, and with a larger conversion, over 20 or more years?
- What are my estate goals? Heirs generally must empty inherited IRAs within 10 years, and inherited Roth money is generally tax-free to them.
Frequently asked questions
Can I undo a Roth conversion if the market drops or my income is higher than expected?
No. Conversions made in 2018 or later cannot be recharacterized. Many people wait until late in the year, when income is clearer, and complete the conversion by December 31.
Is there an income limit for Roth conversions?
No. Anyone with eligible pre-tax money can convert regardless of income. Income limits apply to direct Roth IRA contributions, not to conversions.
Does a Roth conversion affect Medicare premiums?
It can. Converted amounts increase MAGI, and Medicare's income-related premiums (IRMAA) use MAGI from two years earlier. A conversion at 63 or later can raise Part B and Part D premiums two years later.
What is the five-year rule for conversions?
If you are under 59½, withdrawing a converted amount within five years of the conversion can trigger the 10% additional tax. Each conversion has its own five-year clock. A separate five-year rule determines when Roth IRA earnings can be withdrawn tax-free.
What to do next
- Get the Retirement Tax Window Guide and fill in its year-by-year planner.
- Read the retirement tax window for the bigger picture, and healthcare before Medicare if you are under 65.
- Review any conversion with a qualified tax professional, or schedule a conversation to connect it with your income plan.
Sources
- IRS — IRA FAQs (conversions and recharacterizations)
- IRS Publication 590-B — Distributions from IRAs
- IRS — Instructions for Form 8606
- IRS — 2026 tax inflation adjustments
- IRS — Enhanced deduction for seniors
- CMS — 2026 Part B premiums and IRMAA
- IRS Publication 915 — Social Security taxation
- Congressional Research Service — ACA premium tax credit after 2025
Tax outcomes depend on individual facts and changing law. This page is general education and is not a recommendation to complete a Roth conversion or tax advice.
Next step
Identify the years that deserve tax modeling.
The Retirement Tax Window guide helps organize wages, Social Security, Medicare and RMD milestones before specific tax strategies are considered.
Read the Tax Window GuidePrepared by Strong Tower Advisors for general retirement education. Rule-based content is linked to primary public sources where practical and is reviewed periodically because tax, retirement-plan, Social Security, healthcare and Medicare rules can change.
About Strong Tower Advisors · Editorial and sourcing standards · Last reviewed October 2026