Roth Conversion Before RMDs: Using Your 5–10 Year Tax Window Wisely

A Roth IRA conversion means moving money from a pre-tax retirement account - a Traditional IRA, old 401(k), 403(b), or even a SIMPLE IRA - into a Roth IRA. Roth conversions require paying taxes on the converted amount as ordinary income in the conversion tax year. But once inside the Roth account, the rules change entirely.

This is different from a Roth IRA contribution, which is capped at $7,000–$8,000 per year and subject to income limits. A Roth conversion has no annual dollar cap and no income ceiling. You can convert $50,000 or $500,000 in a single year if the tax math supports it.

Traditional IRAs offer tax-deferred growth until withdrawal. Roth IRAs flip the script:

• Roth conversions allow tax-free growth and withdrawals in retirement

• Roth IRAs allow tax-free withdrawals after five years (and age 59½)

• Roth IRAs have no required minimum distributions during the owner's lifetime

• Qualified distributions pass to heirs tax free under current rules

The after tax nature of Roth dollars means the IRS already got paid. That's the whole point. Many clients consolidate multiple Roth accounts into the same IRA over time for simplicity.

The tax window is the 5–10 years between the end of full-time earnings and the age when RMDs begin. During this stretch, your taxable income often drops. Maybe you're living on savings, a modest pension, or investment income. Your tax bracket is lower than it was - and lower than it will be once RMDs and Social Security stack up.

Converting to a Roth IRA during these low-income retirement years lets you pay taxes at today's favorable rates instead of tomorrow's forced, higher ones. Converting a traditional IRA to a Roth IRA in advance of RMDs can lead to better long-term tax efficiency for three reasons:

• Smaller future RMDs. Every dollar you move from a Traditional IRA to a Roth IRA is one less dollar the IRS uses to calculate your required minimum distribution. Roth conversions can reduce future RMD amounts significantly - or even eliminate future RMDs on those converted retirement assets entirely.

• Tax diversification. Having both pre-tax and Roth account types gives you flexibility in managing future tax rates and your overall tax bill year by year. Tax diversification allows flexibility in managing future taxes.

• More control. Instead of the IRS telling you how much to withdraw, you decide. Tax-free withdrawals from a Roth IRA can provide flexibility in retirement income planning - whether for travel, home renovations, or helping adult children.

Consider a 62-year-old couple with $1 million in retirement funds, $50,000 in pension income, and $20,000 in investment income. They could convert $50,000–$80,000 per year through age 72, staying within the 22% federal bracket. The conversion taxes might total around $100,000 over the decade. But the payoff - reduced RMDs, lower tax liability in their 70s and 80s, and eliminated IRMAA surcharges - could save well over $200,000 in lifetime taxes.

Here's the rule that catches people off guard: you must satisfy total IRA RMD before converting to Roth IRAs. Period. RMD dollars themselves cannot be rolled into a Roth. You cannot convert to Roth until RMDs are fulfilled for that year.

The ordering works like this:

1. Calculate your total aggregated IRA RMD across all Traditional IRAs

2. Withdraw the full RMD amount (taxable as ordinary income)

3. Only then can you convert additional funds from an IRA to a Roth

For someone with a $1,000,000 IRA balance at age 73, the required minimum distribution is roughly $36,500. That $36,500 must come out first. Only money above that taxable amount is eligible for conversion. And that $36,500 has already eaten into your lower brackets, leaving less room to convert without jumping into a higher tax bracket.

For IRA owners with multiple accounts, the total aggregated RMD must be calculated across all IRAs. You can withdraw from any combination, but the full amount must be satisfied before any Roth conversion for that year.

This is the trap: people who postpone conversions until after RMDs begin find they can't convert aggressively without spiking their income. The RMDs consume the lower brackets. The conversion opportunity shrinks. And it never comes back.

The real power of a Roth conversion strategy isn't just tax free growth inside the Roth. It's reshaping your taxable income profile from your 70s through your 90s. Three levers do the work:

• Smaller RMDs. Roth conversions can eliminate future RMDs on traditional IRAs. Converting $500,000 over 8–10 years could cut your annual RMD by $20,000–$30,000 starting at 73, saving six figures in combined tax over a lifetime.

• Lower Social Security taxation. Large RMDs can increase the taxation of Social Security benefits up to 85%. By keeping traditional withdrawals lower, your "provisional income" stays closer to thresholds where less - or none - of your Social Security is taxed.

• Reduced IRMAA surcharges. Medicare premiums jump when your modified adjusted gross income crosses specific IRMAA thresholds. For 2026, the first IRMAA tier threshold is $218,000 for married filing jointly. Exceeding it by even $1 can cost thousands per year in higher premiums.

The framework is simple. Step 1: intentionally raise income in your low-tax 60s with Roth conversions. Step 2: enjoy lower forced income in your 70s and 80s when healthcare costs and benefit taxation are in full swing.

Bracket management is the core tactic: convert just enough each year to fill your target tax bracket without spilling into the next one. Roth conversions trigger immediate tax liabilities that can affect future income brackets, so precision matters.

The process:

1. Estimate your taxable income from all sources - pensions, part-time work, dividends, Social Security

2. Identify how much room remains in your desired bracket

3. Convert up to that remaining amount from your Traditional IRA or 401(k) to a Roth IRA

For tax year 2026, a married couple filing jointly has a 22% bracket running from $100,800 to $211,400 in taxable income (after the $32,200 standard deduction). A 64-year-old couple with $70,000 of other income could have $40,000–$50,000 of room in the 22% bracket available for a Roth conversion - paying roughly $9,000–$11,000 in federal income tax on the converted amount while keeping their tax rate well below what they'd pay later.

Watch for interactions: capital gains stacking on top of conversion amounts, the pro rata rule if you have after-tax money in the same IRA, and the timing of Social Security claims that add to income.

Not every retirement plan calls for aggressive conversions. But converting to a Roth is especially compelling for:

• The Early Retiree Couple. Substantial pre-tax balances ($500,000–$2,500,000), retiring in their early 60s, creating years of low income before RMDs begin. They pay the conversion taxes now at favorable rates and build a tax-smart retirement portfolio for the decades ahead.

• The Business Seller. After an exit, income may drop sharply for several years, opening a temporary Roth conversion window before future tax rates climb with RMDs.

• The Newly Widowed or Single Filer. Moving from married filing jointly to single status means narrower brackets on the same income. Converting while still filing jointly - or while income is low - can lock in lower rates.

One critical detail: paying conversion taxes from outside funds (a taxable brokerage account or cash) maximizes Roth benefits. It keeps the full converted amount growing tax free inside the Roth account rather than shrinking it to cover the tax bill. Your time horizon matters - Roth investments generally need 5–10+ years to recover the upfront tax cost and compound.

Roth conversions aren't always the right move. Be cautious if:

• Your current tax rate is already high and your expected retirement rate looks meaningfully lower

• You plan to move from a high-tax state to a no-income-tax state in the next few years

• You intend to give large portions of IRAs to charity via Qualified Charitable Distributions, where RMDs may already be tax-efficient

• You'd need to tap retirement savings to pay the conversion taxes, jeopardizing emergency reserves or triggering penalties

Tax laws can change. Future tax rates aren't guaranteed. A good Roth conversion strategy remains flexible and gets revisited annually. Encourage your tax advisor and financial professional to model scenarios rather than assume "Roth is always better."

The timing of Social Security and Medicare enrollment heavily influences your conversion strategy. Delaying Social Security to age 67 or 70 can create several low-income years ideal for larger conversions. Early claiming at 62–64 raises taxable income sooner, shrinking the window.

On the Medicare side, IRMAA surcharges are based on MAGI from two years prior. A large Roth conversion at age 63 can push Medicare premiums higher at 65. If you're not watching the IRMAA tier thresholds - and building a multi-year calendar that aligns conversion years, Social Security start dates, and Medicare enrollment - you may trade one tax problem for another.

The solution is integrated planning: coordinating retirement tax strategy with benefit timing in one cohesive plan, not making isolated decisions.

At Revolutionary Wealth, we're an independent fiduciary financial planning firm in Bentonville, Arkansas with an in-house attorney. Our process for building a Roth conversion roadmap follows five steps:

1. Inventory all retirement accounts - Traditional IRAs, 401(k)s, 403(b)s, Roth IRAs - plus other assets, taxable accounts, and pensions

2. Project RMDs at age 73+ under current tax laws, highlighting likely future brackets and IRMAA exposure

3. Identify the tax window and simulate different conversion schedules - steady, front-loaded, or timed around market dips

4. Coordinate conversions with Social Security claiming, Medicare enrollment, and legacy goals

5. Revisit annually for tax law changes, market returns, and life events

We work with pre-retirees aged 59–67 with $750,000+ net worth, single or widowed women seeking clarity, and business owners earning $500,000+ who need integrated planning. We don't promise specific tax outcomes. We focus on reducing lifetime taxes through disciplined, data-driven modeling - always coordinating with your tax professional or CPA.

The window between retirement and age 73 doesn't stay open forever. Every year you wait is a year of lower brackets you'll never get back. Ask yourself:

• Am I within 5–10 years of retirement or already retired but not yet 73?

• Do I have significant pre-tax balances in a Traditional IRA or old 401(k)?

• Am I concerned about high RMDs, Medicare costs, or leaving taxable IRAs to my kids?

If you answered yes to any of those, schedule a complimentary consultation with Revolutionary Wealth. We'll review your retirement account balances, projected RMDs, and map a first-draft conversion and tax diversification strategy. Meetings are available in-person in Bentonville or virtually, with no obligation.

This article is for educational purposes only and does not constitute individual tax advice. Tax laws can change, individual results vary, and readers should consult a qualified tax professional before implementing any Roth conversion strategy.