A Retired Couple Who Hasn’t Claimed Social Security Can Convert $47,500 Before Dec. 31 and Owe $0 Federal Tax. On Jan. 1 the Space Resets, and Whatever They Didn’t Use Is Gone

A married couple, both 65 or older, who are living on savings while they put off taking Social Security can do a Roth conversion in 2026 without owing federal income tax. If they have no other taxable income, they can move $47,500 from a traditional IRA into a Roth IRA this year and owe nothing to the IRS. Those deductions apply one tax year at a time, and any unused portion is lost by Dec. 31.

Three Deductions Add Up to $47,500

Three separate 2026 deductions add up to the figure. The IRS set the standard deduction for married couples filing jointly at $32,200. When both spouses are 65 or older, each one adds an extra $1,650.

The One, Big, Beautiful Bill added a new senior deduction on top of those: $6,000 per person ($12,000 if married filing jointly) for tax years 2025 through 2028. That deduction starts to phase out once income passes $150,000 for married joint filers, far above this conversion. A Roth conversion counts as ordinary income in the year it happens. For a couple with no pension, wages, or benefits, converting the full amount leaves taxable income at zero.

Why Waiting on Social Security Makes This Work

The plan only works if the conversion is the only income on the return. Once benefits start, conversion income goes straight into the formula that determines how much of each Social Security check is taxed. For joint filers, up to 50% of benefits become taxable when combined income falls between $32,000 and $44,000, and up to 85% above that.

A conversion this size on top of benefit checks would push most couples past both thresholds. That makes the years between retiring and taking Social Security a short window, and it’s the same low-tax stretch we sized up in a free guide to the Roth window. On a September 2026 episode of The Clark How Podcast, financial advisor Wes Moss described his method: “Do it slowly over time, only convert as much as won’t get you into the next higher marginal tax bracket.”

How the Space Compares With Typical Savings

According to the Federal Reserve’s Survey of Consumer Finances, households aged 65 to 74 average $609,230 in retirement savings, but the median is $200,000. A small number of very large accounts drag the average up. If 10 couples each hold $200,000 and one holds $5 million, the median remains at $200,000 while the average rises to roughly $636,000.

For the median household, $200,000 is about 4.2 years of tax-free conversions. Under current law, the senior deduction covers only 2026 through 2028, so that pace won’t hold. Once the deduction runs out, the same couple’s tax-free room shrinks to $35,500 at 2026 levels, which is the standard deduction plus the age-65 add-ons.

Converting More at Low Rates

Couples who want to go past the zero-tax amount still pay low rates. In 2026, joint filers pay 10% on taxable income up to $24,800, and the 12% bracket runs up to $100,800. Both rates are lower than many retirees face later, when required minimum distributions and Social Security are taxed together.

A couple converting $72,300 would use up the zero-tax room and the full 10% bracket and owe $2,480 in federal tax. A December 2025 episode of the same podcast spelled out the risk of waiting: retirees with big IRAs often “find themselves in higher tax brackets” in their 70s because those distributions are taxable income.

What to Check Before Dec. 31

• Other income on the return. Interest, dividends, capital gains, part-time wages, and pensions each reduce the zero-tax room dollar for dollar. To count for 2026, the conversion has to be finished within the calendar year. State income tax rules are separate and vary.
• Medicare premiums. Suze Orman has pointed out that traditional IRA income “is used to calculate what your Medicare B premiums are going to be.” Larger conversions can raise insurance premiums later.
• The five-year clock. Each conversion starts its own waiting period to determine when you can withdraw earnings tax-free. Because both spouses are past age 59.5, they can withdraw converted principal penalty-free at any time, but earnings must remain in the account until the five-year clock finishes. Orman’s advice is to “keep a record of how much you converted and the year that you converted.”

A Window That Closes Each Year

The $47,500 figure applies to one specific household: married, both 65 or older, no other income and no benefits yet. Couples who match that profile have until Dec. 31 to use this year’s deductions. On Jan. 1, the deductions start over with the new tax year, and you can’t recover any room left unused in 2026. The senior deduction is set to end after 2028, so under current law, 2026, 2027, and 2028 are the largest tax-free conversion years this group is likely to get.

Contact [email protected] for any questions or corrections.