At 74 He Still Converts to a Roth Every Year. The Rule Nobody Tells Retirees: Take the RMD First, and Everything Above It Can Still Go In

If you are 73 or older and still have money in a traditional IRA, here is the rule almost no one at the bank will volunteer: you can keep doing Roth conversions for the rest of your life. There is no age ceiling, and the catch that trips up most retirees is small but strict: you have to take your required minimum distribution first, and only the dollars above that RMD are eligible to move into the Roth.

That is why a 74-year-old can still convert every single year, shrink a future tax bill, and hand heirs a tax-free account. Most retirees never hear about it because the conversation stops at “you have to take your RMD.” It should not. (For the mirror-image play, using the low-tax years before RMDs kick in, we sized up that window in a free Roth conversion guide.)

Buried Rule Hiding Inside Your Traditional IRA

Congress killed the old age-70½ contribution cap years ago, but the Roth conversion rules were never age-limited. A conversion works as a taxable transfer of money you already have from a pre-tax IRA into a Roth IRA, distinct from an annual contribution. You can do it at 45, 65, or 95. The IRS does not care how old you are.

What the IRS does care about is the RMD. Once you hit RMD age, the first dollars you take from your traditional IRA each year count as your required distribution. Those dollars must land in a taxable account, not a Roth. Everything you pull after you satisfy the RMD is fair game to convert.

Where This Rule Actually Lives

The credibility anchor is Treasury Regulation §1.408A-4, which governs Roth IRA conversions. Its Q&A-6 spells it out: an RMD from a traditional IRA is not eligible for rollover, and therefore cannot be converted to a Roth. SECURE 2.0 reinforced the rule by pushing the RMD start age to 73 for anyone born between 1951 and 1959, and to 75 for those born in 1960 or later. Put those two facts together, and the strategy writes itself. Take the RMD. Then convert.

Who Gets to Use This, and Who Does Not

Any owner of a traditional IRA, SEP IRA, or SIMPLE IRA can convert at any age. You do not need earned income. You do not need to be under a certain income. High earners are not phased out of conversions the way they are phased out of direct Roth contributions.

Two groups are shut out. Beneficiaries of an inherited traditional IRA can never convert those dollars to a Roth. They must take the RMDs and pay ordinary income tax. And the RMD itself, no matter whose IRA it comes from, is never convertible.

How a 74-Year-Old Runs the Play

1. Calculate this year’s RMD using the IRS Uniform Lifetime Table and your December 31, 2025 balance. Withdraw it to a taxable brokerage or checking account before doing anything else.
2. Decide how much additional pre-tax money you want to convert. Most retirees stop at the top of the 12% or 24% federal bracket to avoid pushing income into the next tier.
3. Instruct your IRA custodian to move that additional amount directly to your Roth IRA as a conversion. Same institution, same day, one form.
4. Set aside cash from a non-IRA account to pay the tax on the converted amount. Paying the tax from the IRA itself defeats the point and, if you are under 59½, triggers a penalty.
5. Track the five-year clock. Each conversion starts its own five-year holding period before the converted principal can come out penalty-free, though at 74 the 10% early-withdrawal penalty is already off the table.

Gotcha That Wrecks the Strategy

The single biggest trap is sequencing. If your custodian processes the conversion before the RMD is out, the IRS treats the first dollars converted as your RMD, and those dollars become an excess contribution to the Roth. The penalty is 6% per year until you fix it.

Two more items worth watching. A large conversion can push your Medicare Part B and Part D premiums into a higher IRMAA bracket two years later, so retirees on Medicare should size conversions with that lag in mind. And the pro-rata rule still applies: if you hold any after-tax basis across your traditional IRAs, every conversion is treated as a proportional mix of pre-tax and after-tax dollars. Take the RMD first, size the conversion second, pay the tax from outside the IRA, and the rule works exactly as advertised.

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