The Roth Conversion Window Most Pre-Retirees Miss

The years between the day you stop working and the day required minimum distributions (RMDs) begin (age 73 if you were born from 1951 through 1959, age 75 if you were born in 1960 or later) are usually the cheapest stretch of your life to move traditional individual retirement account (IRA) money into a Roth. Most pre-retirees let that window close unused and pay more tax on the same dollars than they ever needed to.

The Bracket-Filling Math

Retire at 62 and delay Social Security to 70 and your taxable income can drop. A modest pension plus some portfolio interest may leave you well inside the 12% or 22% federal bracket with room to spare.

In 2026, the 22% bracket for married couples filing jointly runs up to $211,400 of taxable income. Add the $32,200 standard deduction for a couple under 65 and that bracket holds about $243,600 of income. A couple with $40,000 in other income could convert roughly $200,000 in a single year and stay inside it. Conversions half that size, repeated for 5 or 6 years, can move $500,000 or more into Roth at a rate that may sit below what RMDs would force in your 70s. (Couples 65 and older get a larger deduction: $1,650 more per spouse, plus the new $6,000 senior deduction per person for 2025 through 2028, which phases out once modified adjusted gross income (MAGI) passes $150,000.)

Two Tripwires: ACA Subsidies and IRMAA

Retired but not yet on Medicare, your household likely buys coverage through the Affordable Care Act (ACA) marketplace. Premium tax credits shrink as your MAGI rises. The enhanced credits of 2021 through 2025 have expired, so for 2026 coverage the credit stops entirely above 400% of the federal poverty level, about $84,600 for a household of 2 in the lower 48 states. A large conversion can wipe out thousands of dollars in subsidies, pushing the real marginal cost well above 22%.

The Income-Related Monthly Adjustment Amount (IRMAA), the Medicare surcharge on Part B and Part D premiums, creates a similar tripwire two years later. For 2026 premiums the first IRMAA threshold is $218,000 of MAGI for a married couple filing jointly; the line for 2028 premiums will be indexed and has not been published yet. If you are 63 or older, a conversion that pushes 2026 MAGI past it can raise your 2028 Part B premiums. At 2026 rates, the first tier adds about $81 per person per month, close to $975 a year, before any Part D surcharge. That argues for sizing conversions carefully.

How State Taxes Change the Answer

Some states, including Pennsylvania and Illinois, exempt most retirement income from state tax, and converting while you live in one may avoid state tax on the converted amount (eligibility rules vary by state, so confirm the details). If you're in California or New York today but plan to retire somewhere with no income tax, it may pay to wait: converting $100,000 while you are in California's 9.3% bracket adds about $9,300 of state income tax that the same conversion in Nevada or Florida would avoid.

The Takeaway

Two things decide your answer: how much taxable income you already have in those first retirement years, and which state you expect to be living in when the money finally comes out.

The people who get hurt here usually sized a conversion correctly for the federal bracket and forgot the same dollars also set their ACA subsidy this year and their Medicare premium two years out. The bracket math was right and the all-in cost still landed higher than planned.

How conversion size, subsidies, IRMAA, and your state of residence interact across a multi-year schedule is worth a conversation before you convert a dollar this year.

The information provided is for educational purposes only and does not constitute investment, legal, or tax advice. Consult with qualified professionals for guidance specific to your situation.