Roth Conversion Before RMD Age 73: Using Your Retirement "Tax Window" Wisely

The Roth conversion window is the stretch of years after full-time work ends but before required minimum distributions start at age 73 and before both spouses fully claim Social Security benefits. The years between retirement and age 73 often feature lower taxable income, which means lower marginal federal income taxes on conversion dollars.

Think of it as "bracket space": the gap between your current taxable income and the top of the tax bracket you are willing to fill with conversion income. If you earn $60,000 in pension and investment income after deductions as a married filing jointly couple, and the 22% bracket tops out at $211,400 of taxable income in 2026, you have roughly $151,400 of bracket space you could fill with Roth conversion income while staying at 22%.

Converting during low-income years can optimize tax benefits because you are recognizing income at rates you may never see again. Every year without conversions is bracket space permanently lost. You cannot go back and fill the 2025 bracket once 2025 is over.

At Revolutionary Wealth, we model this conversion window year by year for clients in their early to mid-60s in Northwest Arkansas and beyond, mapping out exactly how much room each year offers.

Traditional IRA withdrawals are taxed as ordinary income. Roth IRA qualified withdrawals are tax free. The conversion itself bridges the two: you pay income tax now to avoid paying it later.

When you convert from a traditional IRA to a Roth, the conversion amount adds directly to your adjusted gross income (and taxable income) for that calendar year. That increase interacts with everything else on your return: investment income from dividends, interest, and capital gains; business income; pension income; and any other income sources.

The goal is not to avoid tax entirely. The goal is to trade some tax today, at a known rate, for the potential of avoiding higher future tax rates and Roth conversions can optimize tax management in retirement. Tax diversification is beneficial for managing annual tax liability because holding both pre-tax and Roth accounts gives you flexibility in any future tax environment.

When evaluating conversions, track both your current tax bracket and your projected future tax rates once RMDs, Social Security, and investment income are all in play.

The core question behind any Roth conversion strategy is this: will your tax rate later be higher than it is now?

For tax year 2026, married filing jointly couples face seven federal brackets: 10% on the first $24,800 of taxable income, 12% up to $100,800, 22% up to $211,400, 24% up to $403,550, then 32%, 35%, and 37% at higher levels. The 2026 standard deduction for married couples is $32,200. A couple with $80,000 in gross income after the standard deduction has a taxable income of roughly $47,800, sitting well within the 12% bracket. They could convert $53,000 and still stay in the 12% bracket, or convert more and move into 22%.

If that same couple, at age 75, faces $50,000 in Social Security income (partially taxable), $25,000 in RMDs, and $15,000 in investment income, their combined taxable income could land in the 22% bracket or higher, especially if the surviving spouse files as single after one partner dies.

Over longer horizons of 15 to 25 years, the ability to grow tax free inside a Roth often outweighs the upfront tax cost. If you reasonably expect higher future tax rates, whether from rising income, legislative changes, or the "widow's penalty" of switching to single filing, paying conversion taxes now can be the better trade.

At Revolutionary Wealth, we use tax projection software rather than rules of thumb to compare "convert vs. don't convert" for each client.

Conversion amounts are taxed as ordinary income tax for federal purposes (and for state income tax in most states). A $120,000 conversion on top of $50,000 in other income pushes total ordinary income to $170,000. Roth conversions can push clients into higher tax brackets if not managed. Sizing matters.

Paying conversion taxes from outside funds (cash savings, a taxable brokerage account) maximizes tax free growth because every dollar that enters the Roth stays in the Roth and continues compounding. Pay conversion taxes from outside funds to maximize tax free growth. If you instead pull money from the IRA to cover the tax bill, you reduce the amount growing tax free and, if you are under age 59½, may owe an additional 10% penalty on the portion used for taxes.

A simple example: you convert $120,000, and your effective federal rate on that conversion is 20%. That is $24,000 in federal income taxes. If you write a check for $24,000 from your taxable brokerage account, the full $120,000 lands in the Roth and can continue growing tax free for decades. If you pull the $24,000 from the IRA and only convert $96,000, you lost $24,000 of tax free compounding permanently.

Plan cash flow for conversion taxes ahead of time with your CPA and financial advisor to avoid surprises.

"Bracket filling" means converting just enough each year to reach, but not exceed, the top of a chosen federal tax bracket. Partial conversions can be more attractive than converting the entire IRA at once.

Here is a step-by-step approach:

1. Estimate your other income for the year: pension income, Social Security benefits, business income, investment income, and any other sources.

2. Subtract your standard deduction ($32,200 for married filing jointly in 2026) or itemized deductions.

3. The result is your baseline taxable income without any conversion.

4. Identify the bracket edge you want to fill. For a married filing jointly couple targeting the 22% bracket in 2026, that edge is $211,400.

5. The difference between your baseline taxable income and the bracket edge is your available conversion amount.

Suppose a married filing jointly couple has baseline taxable income of $110,000 after deductions. The 22% bracket for 2026 runs through $211,400. They could convert up to roughly $101,400 and stay entirely within 22%. Converting funds before age 73 may fill lower tax brackets after retirement that would otherwise go unused.

Build a cushion of $5,000 to $10,000 below the bracket edge. Unexpected year-end capital gains, a late dividend payment, or a small bonus can push you over. Conservative estimates prevent expensive surprises.

Properly sized annual conversions reduce the traditional IRA balance and, by extension, future RMDs, without overpaying taxes in any single year.

IRMAA (Income-Related Monthly Adjustment Amount) is the surcharge that raises Medicare Part B and Part D premiums for higher-income retirees. IRMAA surcharges can increase due to Roth conversions' impact on modified adjusted gross income.

Medicare uses your tax return from two years prior. Your 2026 income determines your 2028 Medicare premiums. For married filing jointly couples in 2026, a modified adjusted gross income at or below $218,000 triggers the standard Part B premium of $202.90 per month. Cross $218,001 and you enter the first surcharge tier, adding roughly $81.20 per month per person for Part B alone. Part D carries its own surcharges at the same thresholds.

That means crossing the $218,000 line by even $1 can add over $2,000 per year in combined Medicare premiums for a couple. Roth conversions can help manage future Medicare premiums, but only if you size them with IRMAA thresholds in mind.

If you are age 63 or older, every conversion dollar affects Medicare premiums two years later. Coordinate conversion amounts with IRMAA thresholds so you do not accidentally hand back savings in higher premiums.

Investment income from interest, dividends, capital gains, and rental income adds to both taxable income and modified adjusted gross income. Each dollar of investment income shrinks the "bracket space" available for a Roth conversion.

In a year when you plan to sell a rental property or liquidate a large stock position, the resulting capital gains may consume much of your conversion room. Staggering the sale and the conversion across two tax years can prevent a tax spike that pushes you into a 32% or higher bracket.

Conversely, a year with low capital gains and minimal dividends may be the ideal year to convert a larger amount. Coordinated planning between investment strategy and Roth conversion timing is a core part of Revolutionary Wealth's advisory work. We recommend that clients avoid making large asset sales in the same tax year as their biggest Roth conversion unless the combined tax impact has been modeled.

Scenario 1: The Northwest Arkansas Couple

A couple, ages 62 and 60, holds $1.2 million in traditional IRAs, collects a modest pension of $20,000 per year, and carries no debt. They plan to leave full-time work at 65. At that point, their pension plus investment income, after the standard deduction, leaves baseline taxable income around $50,000. They begin converting $80,000 per year, pushing total taxable income to $130,000, which sits in the 22% bracket (below the $211,400 MFJ edge). The extra federal tax is roughly $17,600 per year, paid from a taxable brokerage account. Over eight years (ages 65 to 72), they move $640,000 into the Roth. The remaining traditional IRA balance at 73 is smaller, producing RMDs well under $20,000 rather than the $45,000+ they would have faced on the full balance. Their heirs receive Roth assets free of income tax.

Scenario 2: The Business Owner Selling at 63

A Bentonville business owner expects a company sale at age 63 that will generate a large one-time capital gain and ordinary income. In the year before the sale, income is around $120,000, so she converts a modest $40,000 to stay under the 24% bracket edge. She skips conversions entirely in the sale year. After the sale, income drops to $30,000 per year. From ages 64 to 72, she converts $150,000 to $200,000 per year, filling the 24% and occasionally the 32% bracket. By age 73, her traditional IRA is a fraction of its original size, and her retirement funds sit largely in Roth accounts.

Scenario 3: The Widow Planning for Single Filing

A widowed client, age 67, has a large IRA and modest baseline income. When her late husband was alive, they filed jointly and stayed in the 22% bracket. As a single filer, the same income lands in the 24% or even 32% bracket because single-filer thresholds are roughly half of the married filing jointly thresholds. She converts $60,000 to $80,000 per year from ages 67 to 72, targeting the 22% bracket as a single filer. The conversions reduce her future RMDs, protect her from higher IRMAA tiers, and leave her children a Roth inheritance instead of a taxable one.

Social Security benefits become taxable based on your "provisional income," which is your adjusted gross income (excluding Social Security) plus tax-exempt interest plus 50% of your Social Security benefits. For married filing jointly couples, provisional income below $32,000 means no Social Security benefits are taxed. Between $32,000 and $44,000, up to 50% of benefits become taxable. Above $44,000, up to 85% are taxable.

Roth conversions increase AGI, which increases provisional income, which can cause more Social Security income to become taxable. This is the "tax torpedo." A $20,000 conversion does not just add $20,000 of taxable income; it can also cause an additional $10,000 to $17,000 of Social Security benefits to become taxable, raising the effective tax rate on that conversion well above the stated marginal bracket.

Consider a married filing jointly couple with $30,000 of non-Social Security income and $40,000 of Social Security benefits. Their provisional income is $50,000 ($30,000 + $20,000), already above the $44,000 threshold. A $20,000 Roth conversion pushes provisional income to $70,000 and makes additional Social Security dollars taxable.

Conversions during the early retirement years, before Social Security starts, often let you sidestep this torpedo entirely. At Revolutionary Wealth, we model these interactions year by year rather than guessing at their impact.

Under the SECURE Act's 10-year rule, most non-spouse heirs must empty an inherited IRA within 10 years. If that inherited IRA is a traditional account, every dollar withdrawn is taxable as ordinary income. Many heirs are in their 30s, 40s, or 50s, often in their peak earning years and already in a higher tax bracket. Forcing large taxable distributions on top of their existing income can push them into 32% or 35% territory.

Roth conversions can leave a tax free inheritance for beneficiaries. Heirs who inherit a Roth IRA still must empty it within 10 years, but their withdrawals come out income-tax-free. Beneficiaries can withdraw Roth IRA funds tax free after five years from the original conversion. Roth IRAs can grow tax free for multiple generations if structured properly within the 10-year distribution window.

Paying conversion taxes from your taxable estate shrinks the estate subject to potential estate taxes while shifting more after-tax wealth into protected Roth accounts. Roth conversions can provide a tax free legacy for heirs.

Clients in Northwest Arkansas often prioritize leaving "tax-smart" inheritances. Pre-73 conversions fit naturally into broader estate and legacy planning alongside trusts, beneficiary designations, and charitable giving.

The most frequent errors we see:

• Converting too much in one year. Pushing taxable income from the 22% bracket into the 32% bracket erases much of the benefit. Partial Roth conversions, spread across multiple years, keep rates manageable.

• Ignoring IRMAA thresholds. A conversion that crosses the $218,000 MAGI line for a married filing jointly couple triggers higher Medicare premiums two years later.

• Paying conversion taxes from the IRA itself. This reduces the Roth balance and defeats the purpose of letting dollars grow tax free. If you are under 59½, it can also trigger additional taxes.

• Overlooking state income tax. Most states tax conversion amounts. A planned move from a state with income tax to one without (or vice versa) can change the math on when and where to convert.

• Ignoring the five-year rule. Each conversion has its own five-year rule for penalty-free withdrawals of the converted amount. Converting at age 68 means those specific dollars become fully accessible penalty-free at 73.

• Forgetting that conversions are irreversible. Under current law (since the Tax Cuts and Jobs Act of 2017), you cannot recharacterize a Roth conversion back to a traditional IRA. Planning with a qualified tax professional and financial advisor is non-negotiable.

A multi-year Roth conversion plan is an annual schedule from roughly age 60 to 73, specifying conversion amounts, expected tax brackets, IRMAA implications, and RMD projections. It is not a one-time decision. It is an ongoing process.

Revolutionary Wealth uses tech-driven planning tools to model multiple scenarios: no conversion, moderate conversion, and aggressive conversion. We compare after-tax wealth over 20 to 30 years, incorporating expected investment returns, income needs, business sale timing, and evolving future tax rates.

Each year before age 73, revisit actual income, investment gains or losses, unexpected events (an inheritance, a property sale, a change in tax laws), and adjust accordingly. Tax cuts or bracket changes in a given year may open up additional conversion room.

For high-net-worth readers, especially business owners and pre-retirees with $500,000 or more in retirement savings, Roth conversion is an ongoing process, not a checkbox.

Large liquidity events like business exits, stock option exercises, or property sales can create one or two years of very high gross income. These are usually the worst years to do a Roth IRA conversion because the additional ordinary income stacks on top of an already elevated tax situation.

The approach: "bookend" the event. Before the sale year, do modest conversions if bracket space allows. Skip conversions in the sale year itself. Then accelerate conversions during the lower-income years that follow.

A Bentonville business owner who sells at age 61, generating $1.5 million in combined ordinary and capital gains income, would skip conversions that year. From ages 62 to 70, with business income gone and retirement funds not yet subject to RMDs, she converts $150,000 to $200,000 per year, filling the 24% or 32% bracket depending on other retirement income and investment income. By age 73, her traditional IRA is substantially reduced.

Coordinating conversion strategy with the timing of capital gains also helps manage the 3.8% Net Investment Income Tax, which applies to modified adjusted gross income above $250,000 for married filing jointly filers.

Revolutionary Wealth specializes in this integration for business owners in Northwest Arkansas and across the region.

Consider these factors:

Tax diversification matters. Holding both pre-tax and Roth accounts gives you the flexibility to manage your tax situation year by year, regardless of what Congress does with future tax rates.

We encourage involving both a fiduciary financial advisor and a tax advisor to stress-test the strategy before executing large conversions. At Revolutionary Wealth, as a fiduciary firm in Northwest Arkansas, we provide personalized Roth conversion analysis rather than blanket recommendations.

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