When should I convert my traditional IRA to a Roth?
David TalleyUpdated December 6, 2025
Quick Answer
Convert when you're in a lower tax bracket than you expect to be in retirement, typically during early retirement, gap years, or lower-income periods. The sweet spot is often between ages 55-73, after you stop working but before RMDs begin. Convert enough to "fill up" lower tax brackets without jumping into higher ones. Always have non-IRA funds available to pay the conversion tax.
Roth conversions are one of the most powerful tax planning tools available, but timing is everything.
The basic trade-off:
Convert traditional IRA to Roth → pay income tax now on the converted amount → never pay tax on that money or its growth again.
When conversions make sense:
1. **The gap years (55-73)**: You've stopped working, your income is lower, but RMDs haven't started yet. This is the golden window.
2. **Market downturns**: If your portfolio drops 30%, convert the same shares for 30% less tax.
3. **Years with unusual deductions**: Large medical expenses, business losses, or other deductions create "room" for conversion income.
4. **If you expect higher tax rates in the future**: Either personally (higher income later) or legislatively (tax law changes).
When to be careful:
- If conversion income pushes you into IRMAA (Medicare premium surcharges)
- If it triggers the 3.8% Net Investment Income Tax
- If you don't have cash outside the IRA to pay the taxes
- If you need the money within 5 years (5-year rule on converted amounts)
The strategy we use:
Each year, look at where you are in the tax brackets. If you're in the 22% bracket with room before hitting 24%, convert just enough to "fill" that 22% bracket. Stay there. Don't jump brackets unnecessarily.
Over 10-15 years of doing this, you can systematically convert substantial IRA balances at favorable rates and dramatically reduce lifetime taxes and future RMDs.
The key insight:
This isn't about one year. It's a multi-year strategy. And it requires someone who actually runs the projections.
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