Roth Conversions in Low-Income Years: The Retiree’s Window Before Required Distributions Begin
Between the last paycheck and the first required withdrawal, a narrow window opens where tax rates can drop to their lowest point in decades, but most retirees either miss it entirely or trigger costly surprises trying to use it.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
For many retirees, the paycheck stops years before the IRS starts requiring withdrawals from traditional IRAs, and in that gap, taxable income can fall to its lowest point in decades. The salary is gone, Social Security may not have started, and required distributions haven’t begun.
Those lean years open a window. A retiree who moves money from a traditional IRA into a Roth IRA during that stretch can pay tax on the transfer at lower rates. The move also reduces the balance that future required withdrawals are figured on, and the window closes on a fixed schedule that fits some households much better than others.
How a Roth Conversion Turns Taxable Money Into Tax-Free Money
Converting means moving assets from a traditional IRA into a Roth IRA. According to IRS guidance, the converted amount is normally included in income on your return for the year you convert it. The exception is any part that represents basis, meaning after-tax money you already put in. A properly completed conversion avoids the 10% additional tax on early distributions, and you report it on Form 8606.
The reward comes later. A qualified Roth withdrawal is tax-free, growth included. That generally means one taken on or after age 59½ once the account has passed a five-year holding test. Minimum distribution rules for traditional IRAs don’t apply to Roth IRAs while the owner is alive, per the IRS.
Why Low-Income Years Let You Fill Cheaper Tax Brackets
A tax bracket is a layer of income taxed at one rate, and income fills the lowest layer first, with only the dollars that spill over getting taxed at the next rate up.
The IRS rate schedule for tax year 2025 taxes married couples filing jointly at 10% on taxable income up to $23,850, then 12% up to $96,950 and 22% up to $206,700. If you file as single, the 12% bracket ends at $48,475 and the 22% bracket ends at $103,350.
Once wages stop, many of those lower layers sit empty. The aim is to convert just enough each year to fill a chosen bracket without going into the next one, then repeat until the window closes. The standard deduction covers income first. For tax year 2026, the IRS sets it at $32,200 for married couples filing jointly and $16,100 for single taxpayers. The IRS publishes separate 2026 bracket thresholds, and those apply to conversions completed in 2026.
Required Distributions Start at 73 and Close the Window
A required minimum distribution, or RMD, is the amount the IRS makes you withdraw from a traditional IRA each year. The 2025 edition of Publication 590-B is out. It says anyone who reaches age 72 after December 31, 2022, must begin receiving required minimum distributions by April 1 of the year following the year they reach age 73.
RMDs hurt in two ways. They add taxable income every year whether you need the cash or not. And they’re figured on the traditional balance, so every dollar converted earlier makes that base smaller. Once RMDs start, IRS guidance says you can’t convert amounts that must be distributed for that year, including the year you reach 73. The best years for converting run from retirement until then.
Side Effects That Can Make a Conversion Backfire
Medicare Surcharges
IRMAA, the income-related monthly adjustment amount, is an extra charge added to Medicare premiums for higher-income participants. CMS set the standard Part B premium for 2026 at $202.90 a month. Single filers with modified adjusted gross income above $109,000, and joint filers above $218,000, pay $284.10. They also owe a Part D adjustment of $14.50. Each tier works as a cliff: go one dollar over the line and the full higher premium applies. Medicare bases the charge on income from an earlier tax return, so a big conversion can raise premiums years later.
More Taxable Social Security
Conversion income also counts in the test that determines whether Social Security benefits are taxed. Publication 554 (2025) adds half your benefits to all your other income and compares the total with a base amount of $25,000 if you file individually or $32,000 if you file jointly. A second threshold is set at $34,000 ($44,000 if you are married filing jointly). If you convert after taking benefits, more of each check can become taxable, which raises the real cost of each dollar you convert.
Two Five-Year Clocks
A new five-year period begins with each conversion. For a February 2025 conversion, Publication 590-B says that period begins January 1, 2025. If you withdraw converted money before the period ends, the 10% additional tax may apply, although reaching age 59½ is an exception. A separate five-year test, measured from your first Roth contribution, determines whether earnings come out tax-free.
No Do-Overs
Under Publication 590-A (2025), conversions made in tax years beginning after December 31, 2017, cannot be recharacterized, meaning they can’t be switched back to a traditional IRA. If the market drops after you convert, you still owe tax on the amount you converted.
Who Gains From the Window and Who Should Slow Down
The window fits retirees with a large traditional IRA, several low-income years before 73, and cash outside the IRA to pay the conversion tax. People close to an IRMAA line, those already collecting Social Security, and anyone who expects a lower tax rate later should be careful. It’s worth running the numbers with a qualified professional before converting (we sized up those quiet years between the last paycheck and the first RMD in a free Roth window guide if you want a deeper explanation).
Contact [email protected] for any questions or corrections.
Vilma Rios is a tax professional and tax content contributor with more than 15 years of experience in tax and accounting. She specializes in federal tax research, tax education, and translating complex tax rules into clear, practical information for individuals, families, and small-business owners.
Vilma is a Content Tax Contributor II with the National Association of Tax Professionals (NATP), where she contributes to tax education and professional content. She has also presented tax information through webinars, including Spanish-language tax education, and has appeared on Telemundo 47 discussing tax topics and helping viewers understand important tax-filing requirements.
Her experience also includes tax and accounting work, tax research, IRS-related matters, and public tax education. While in college, Vilma volunteered in an IRS-sponsored tax assistance program and was recognized for her community service by local and state officials.
Known as “Your Tax Geek,” Vilma is passionate about making taxes easier to understand and helping people navigate an increasingly complex tax system.
