Retirees Get an 11-Year Window to Convert to a Roth at Low Rates. The Average One Converts $0.

Between the year a worker retires and the year Required Minimum Distributions kick in at age 73 under SECURE 2.0, most households have roughly an 11-year window during which their taxable income drops sharply. Wages stop coming in. Social Security and modest portfolio withdrawals take over. For many, that means falling into the 12% or 22% federal bracket for the first time in decades. It is the cheapest stretch of tax life an American ever gets, yet the average retiree converts $0 of their traditional IRA to a Roth during it.

The Window the Tax Code Hands You

The math here is straightforward. In 2026, a married couple filing jointly stays in the 12% bracket up to $100,800 of taxable income and in the 22% bracket up to $211,400. The standard deduction is $32,200 for joint filers and $16,100 for singles. A retired couple living on Social Security and a small pension can convert a meaningful slice of their traditional IRA each year and still stay under the 22% ceiling. Once RMDs start, the same IRA gets taxed on the government’s schedule, not the retiree’s.

The size of the pot is not trivial. Fidelity’s Q4 2025 analysis of 18.9 million IRA accounts put the average IRA balance for Baby Boomers at $287,600. For Gen X, Q1 2026 data from Fidelity’s analysis of 19.6 million accounts places the average IRA balance at $118,700. Notably, IRA contributions rose 29% year-over-year in early 2026, suggesting the accumulation phase is still active for many households, even as the conversion opportunity goes largely unused. Left untouched, those balances compound inside a traditional account and eventually come out as ordinary income during a retiree’s 70s and 80s, often in higher brackets than during the window years.

Why the Average Conversion Is Zero

The tax opportunity is real. The behavior tells a different story. The personal saving rate fell to just 2.7% of disposable income as of June 2026, according to the Bureau of Economic Analysis, a sharp drop from the 4.5% reading in January 2026. Households are spending income faster than they are accumulating a cash buffer. Average annual expenditures reached $78,535 in 2024, up from $72,973 in 2022, and there is little reason to think that trajectory reversed in 2025 or 2026.

A Roth conversion demands the one thing households have the least of right now: cash to pay a tax bill out of pocket. Paying the tax from the IRA itself defeats much of the strategy, especially for anyone under 59.5, and shrinks the compounding base even for older retirees. The 2.8% Social Security COLA for 2026 does not free up meaningful room in a fixed-income budget that is already stretched by higher prices.

Consumer caution reinforces the inertia. Retirees surveying the current backdrop, with the 10-year Treasury yielding approximately 4.6% and inflation running at 3.5% year-over-year through June 2026, often choose to sit on cash rather than voluntarily write a check to the IRS to fund a conversion. The opportunity cost of that decision compounds quietly, year after year, until the window closes.

The Cost of Doing Nothing

The window closes without much fanfare. RMDs starting at 73 layer on top of Social Security, pension income, and any part-time earnings, often pushing retirees back into the 22% or 24% bracket for the rest of their lives. Surviving spouses face a sharper version, because filing status flips from joint to single and bracket thresholds roughly halve. Money that could have been moved at 12% ends up taxed at 24% or more, and heirs who inherit a traditional IRA now have 10 years to drain it under their own peak-earning tax rates.

The inflation picture also complicates the calculus. CPI rose 3.5% year-over-year through June 2026, well above the Fed’s 2% target, driven largely by energy prices elevated by geopolitical tensions. That pace of price increases will keep bracket indexing moving, but not fast enough to offset the compounding growth of a large untouched traditional IRA. In other words, the bracket structure retirees face today is roughly the one they will face for the next several years.

What the Data Points Toward

The retirees who use the window generally share three habits. They convert in slices sized to fill a specific bracket, most often stopping at the top of the 12% or 22% line. Financial educator Suze Orman has framed the same idea plainly: “Do not convert it all at once to a Roth because you will owe ordinary income taxes on it in the year that you convert. So do it little by little.” They also pay the conversion tax from a taxable brokerage account rather than drawing from the IRA itself, preserving the full compounding base. And they lean into down markets, which lowers the dollar value of the conversion for the same number of shares. As Orman put it, “When markets are going down, your portfolio value is going down, and that’s the time to convert.”

The window is an artifact of how the tax code interacts with a normal retirement timeline. The data show that most households finish the 11 years the same way they started them, with the traditional IRA untouched and the tax bill deferred to a future self who will face higher brackets, mandatory withdrawals, and fewer options.

Editor’s note: This article has been updated to reflect Fidelity’s Q4 2025 and Q1 2026 IRA balance data (Baby Boomers at $287,600 and Gen X at $118,700, respectively), the June 2026 personal saving rate of 2.7% from the Bureau of Economic Analysis, and the June 2026 CPI reading of 3.5% year-over-year from the Bureau of Labor Statistics.

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