He Converted $[240,000] in the Nine Years Between His Last Paycheck and His First RMD. His Brother Converted $0.

Two brothers retired the same year with roughly the same traditional IRA balance. Nine years later, one had shifted $240,000 into a Roth account. The other had done nothing. The gap between them is the story of a planning window most retirees never use, and the arithmetic is worth reviewing before assuming it applies only to wealthy households.

The window opens the day a retiree stops earning a paycheck and closes the year required minimum distributions begin. Under SECURE 2.0, the RMD age is 75 for anyone born in 1960 or later, which means a person who retires at 66 has nine tax years with almost no earned income before the IRS forces withdrawals from tax-deferred accounts. Those nine years are the only stretch in a saver’s life when income is low by choice and traditional balances are large by design.

The Math Behind the $240,000

Spreading $240,000 across nine years works out to roughly $26,667 per conversion. For a single filer, the 12% federal bracket runs up to $48,475 of taxable income, and the 22% bracket runs from there to $103,350. Layered on top of Social Security and a modest amount of interest income, an annual conversion that size can often fit entirely inside the 12% band. The lifetime tax bill on the full $240,000 lands somewhere near $29,000, paid in installments across nearly a decade.

Brother B left the money in a traditional IRA. The balance kept compounding, and by the time RMDs began at 75, the required withdrawal was calculated against a larger number. Layered onto Social Security, which is tracking a 3.1% COLA for 2027, those RMDs push more of the benefit into the taxable zone and drive the marginal rate higher. The money he saved was the same. The timing of the tax payment was different.

Why the Window Exists at All

The setup is a byproduct of how the retirement system is built. Fidelity’s Q3 2025 analysis of 24.8 million participants shows Baby Boomers holding an average 401(k) balance of $267,900 and an average IRA balance of $257,002. Most of that money was contributed pre-tax, which means the IRS is a silent partner on every dollar. The conversion window is the only stretch when that partner can be paid off cheaply.

The gap between average and median tells the rest of the story. Vanguard’s dataset shows an average 401(k) of $148,153 against a median of $38,176. Averages get pulled up by a small group of very large accounts, and those accounts are the ones most exposed to future RMDs. A retiree with $500,000 in a traditional IRA who ignores the window is making a larger bet than one with $50,000, because the compounded balance at 75 will generate a much larger required distribution and a higher marginal rate.

The calculator makes the tradeoff concrete: a balance left to compound at a pre-tax rate versus the same balance converted in slices, with the tax paid at today’s brackets rather than tomorrow’s required rate.

What Brother B Was Doing Instead

Wes Moss, speaking on The Clark Howard Podcast, described the pattern: “You may find yourself today in the 15% tax bracket, but in retirement you’re going to be in the 20% bracket. So if taxes in the future are higher, then it’s very likely that a Roth conversion today would make some sense for you to pay at a lower rate. Just be careful not to do too big of a conversion all at once because the conversion itself increases your income, which increases your tax bracket.” His recommended approach is to run conversions “in chunks spread out over time.”

Passive holding looks safer because the tax bill is invisible until it arrives. Leaving the money in a traditional IRA earning something close to the 10-year Treasury yield of 4.7%, or a savings position paying the national average 12-month CD rate of 1.7%, leaves the tax exposure in place and compounds it.

What the Data Actually Shows

The nine-year window is a natural consequence of two rules: earned income drops at retirement, and RMDs do not begin until 75. Brother A’s $240,000 conversion was arithmetic applied to a calendar. Brother B’s zero was the same arithmetic ignored. For a retiree with a large traditional balance, the practical starting point is a projection of taxable income at 75 with no conversions, compared against the same projection after filling the top of the 12% or 22% bracket each year in between. The wider that gap, the more the window is worth using.

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