A Roth conversion makes sense when the bracket you'd pay today is lower than the bracket that money would face later. That's the whole decision, and it happens most often in the years between retiring and Required Minimum Distributions at 73, when your income dips but your IRA hasn't started forcing money out yet. The 2026 math: a married couple with $20,000 of other taxable income can convert $80,800 a year without leaving the 12% bracket, paying an effective rate near 11.8% instead of the 20% a one-shot conversion triggers.
You move money from a traditional IRA or 401(k) into a Roth account, and the IRS treats the converted amount as ordinary income for that year. Write the check for the tax from outside funds, wait five years and, after age 59½, everything that comes out is tax-free, growth included. No RMDs during your lifetime either, which is why heirs and tax planners both like Roth accounts.
The catch is timing. Convert everything in one year and the stack of income climbs through 22% and 24% brackets that were never touched otherwise. Convert the same amount in slices across several years, and each slice lands in the 10% and 12% space your low-income years leave empty. That slicing is called a conversion ladder, and it's the single biggest lever most retirees have.
| Rate | Single: taxable income | Married filing jointly |
|---|---|---|
| 10% | up to $12,400 | up to $24,800 |
| 12% | up to $50,400 | up to $100,800 |
| 22% | up to $105,700 | up to $211,400 |
| 24% | up to $201,775 | up to $403,550 |
Conversion room is the cap minus your other taxable income. Single with no pension and no wages? You have $50,400 of room before 22% starts. Married with $40,000 of taxable interest and pension income? You have $60,800. Most ladders target the top of 12%, then deliberately spill a little into 22% if the IRA is large and the years are few.
Couple, both 63, retired with $20,000 of taxable income a year and a $300,000 traditional IRA. Option one: convert it all now. Taxable income jumps to $320,000, and the tax on the conversion is $59,996, a 20.0% effective rate, with part of it taxed at 24%.
Option two: convert $60,000 a year for five years. Each year the first $4,800 fills what's left of the 10% bracket and $55,200 lands in the 12% bracket, so the tax is $480 plus $6,624, or $7,104 a year. Total: $35,520, an 11.84% effective rate. The ladder saves $24,476, and by 68 the entire IRA is Roth, which means no RMDs at 73 and no tax drag on the growth in between.
Enter your filing status, other income, and conversion amount; get the year-by-year tax table and the all-at-once comparison.
Roth Conversion Calculator →Three clocks make the early 60s the classic conversion window. Wages stop, so brackets sit empty. Social Security hasn't started if you delay to 67 or 70, which keeps income low and keeps more of any benefits untaxed later. And RMDs haven't started, so the traditional IRA isn't forcing income on you yet.
At 73 the picture flips. RMDs on a large IRA can add $40,000 or more of forced income a year, stacking on top of Social Security, and once you're in the 22%+ brackets it's expensive to get out. Conversions before that point are prepaying tax at 12% to avoid paying it at 22%. That spread is the entire trade.
Two clocks, often confused. Each conversion has its own five-year period for penalty-free access to converted principal if you're under 59½. Separately, earnings need you to be 59½ plus five years since your first Roth account was opened to come out tax-free. After 59½, the conversion penalty clock stops mattering, which is another reason the early 60s are the easy window. Money you convert at 62 is freely accessible and tax-free well before most people need it.
Start with last year's tax return. Find your taxable income, strip out anything that won't repeat, and subtract it from the 12% cap for your filing status. That's your annual conversion room. Divide your IRA by that room to see how many years a full ladder takes, then check your projected MAGI two years ahead against the IRMAA thresholds before committing. Our Roth conversion calculator does the bracket slicing and the one-year comparison in one pass.
There is no universal cutoff, but converting at 10% or 12% is hard to beat and converting above 24% rarely pencils out. The comparison that matters is your rate on the conversion today against your expected rate on that same money later. Converting at 12% to avoid 22% later is a clear win; converting at 24% when you would have withdrawn at 12% in retirement is a clear loss.
It is spreading one large conversion across several tax years so each slice fills your unused 10% and 12% bracket space instead of stacking into 22% or higher. A couple with $20,000 of other taxable income can convert $80,800 a year under the 12% bracket's $100,800 cap in 2026. Five years of that moves $404,000 at an effective rate near 12%.
Once you stop earning, your taxable income often drops sharply, but Required Minimum Distributions from traditional accounts start at age 73 and can push you back into higher brackets permanently. The gap years let you convert at low rates before RMDs arrive, and they are also when delaying Social Security keeps your reported income down.
Yes. Medicare IRMAA surcharges are based on your modified adjusted gross income from two years earlier. A large conversion can add roughly $810 to $5,445 per person per year in Part B and D surcharges for a year or more. Planning conversions in chunks that stay under the IRMAA thresholds is half the strategy.