Every Year a Retiree With $400,000 Skips a Roth Conversion Before 73 Costs About $3,500 in Extra Tax Later. Skip All 11 Years and the Bill Is About $38,500

Many retirees postpone Roth conversions year after year, mentioning a roof replacement, a market drop, or a family event, and expecting the next year to be simpler. For a retiree with $400,000 in a traditional IRA, each delayed year adds about $3,500 in extra tax later.

Skipping the whole 11-year window until withdrawals become required at 73 brings the total to about $38,500. Moving pretax money into a Roth IRA means paying income tax now and taking tax-free withdrawals later. Many retirees who would come out ahead still never do it.

Why a Skipped Year Can’t Be Recovered

Tax brackets reset every January. In 2026, married couples pay 12% on taxable income above $24,800. You hit the 22% rate above $100,800. Any unused low-bracket room disappears on December 31. The balance you didn’t convert keeps growing until required minimum distributions the withdrawals the IRS forces you to take- pull it out at whatever rate applies then.

The headline figures come from a simple model. It assumes about $35,000 is converted each year and taxed at 12% now, compared with the same dollars withdrawn later at 22%. It assumes no investment growth. Under those inputs, each skipped year costs $3,500 and the full window costs $38,500. Any growth would widen the gap.

Still, everything rests on that future 22% rate. If later withdrawals are taxed at 12%, the cost drops to almost nothing. A surviving spouse who has to file single, with narrower brackets, is one common way the later rate ends up higher.

Six Reasons Retirees Put It Off

• Paying tax early feels wrong. Sending the IRS money a decade early is uncomfortable for many retirees. What you get for it is a known rate on that money instead of an unknown one.
• The payoff is invisible. The bill arrives in April, and the benefit arrives years later. People tend to handle that kind of tradeoff badly.
• The math is hard. The right amount depends on a retiree’s tax brackets, Social Security, and Medicare premiums. Most of the advice out there is too generic to help.
• This year always seems unusual. A medical bill, a market drop, or a family event can make any single year look like a bad time.
• The tax has to be paid from somewhere. Retirees who watch their balances closely don’t want to spend down savings to cover it.
• It can’t be undone. Since January 1, 2018, under the Tax Cuts and Jobs Act, you can’t recharacterize a conversion, which means you can’t reverse it. That’s a fair reason to be careful, and one reason many people convert late in the year, once their income is clearer.

A Tax Bill That Already Exists

A traditional IRA balance has carried an unpaid tax bill the whole time. The statement balance includes the government’s share. A conversion pays that bill at a rate you pick. Waiting means paying it later at whatever rate the rules set then.

When Skipping Makes Sense

Some retirees are right to leave the money where it is. That includes people whose tax rate today is equal to or higher than the rate they expect later, and people with no cash outside the IRA to pay the conversion tax. It also includes people whose heirs are in low brackets and people planning a large charitable legacy, because a charity pays no income tax on an inherited traditional account. The last group is retirees who expect high deductible medical costs later, since those deductions could offset their withdrawals.

Limits That Cap Each Year’s Conversion

Medicare sets a practical limit, since the 2026 Part B premium is $202.90 a month. It rises to $284.10 once modified adjusted gross income passes $109,000 for individuals or $218,000 for joint filers.

The surcharge is based on your tax return from two years prior, so a conversion at 63 can raise your premiums at 65. It also applies to each person, so on a joint return above the threshold, both spouses pay it. Social Security sets the other limit. Benefits become taxable when half your benefits plus your other income exceed $25,000 for individuals or $32,000 for joint filers. Conversion income counts toward that total.

Turning It Into a Default

What usually beats procrastination is structure. One approach is to pick a date each fall and set a conversion ceiling once, based on the tax bracket and Medicare thresholds, so you don’t have to reargue the decision every year. Conversions then go up to that ceiling automatically unless there’s a specific reason not to (those quiet years between the last paycheck and the start of required withdrawals are the cheapest tax window most retirees will ever see, which is the whole subject of our free Roth window guide). When conversion is the default, a busy year needs a real reason to skip it. Without a default, every year starts with a fresh reason to wait.

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