There is a period in most retirements — often five to ten years, sometimes longer — when your taxable income is lower than it has been since your 30s. You've stopped working. Your Social Security hasn't started yet, or you've intentionally delayed it. You're drawing from savings or a taxable brokerage account, not from your IRA. Your income is modest on paper, even if your net worth isn't. This is the window. And most people let it close without using it. A Roth conversion moves money from a traditional IRA — where every dollar withdrawn will eventually be taxed as ordinary income — into a Rot
The window opens when earned income stops and closes when mandatory distributions begin — typically at age 73 under current law. For someone who retires at 62 and delays Social Security to 70, that's potentially eight full years of artificially low taxable income. During those years, your marginal tax bracket may be among the lowest it's been in decades. A couple with modest investment income and no Social Security yet might fall entirely within the 12% or 22% federal bracket — rates that are historically low by post-World War II standards, and that the One Big Beautiful Bill Act of 2025 extended and in some cases stabilized. Converting traditional IRA dollars to Roth during those years means paying at today's known, lower rate rather than tomorrow's unknown, potentially higher rate. Every dollar converted is a dollar permanently removed from your future RMD calculation.
The most common execution method is called bracket filling. The idea is straightforward: each year during the conversion window, you calculate how much room you have left in your current tax bracket, then convert that amount — no more. For a married couple filing jointly in 2026 with $60,000 in other taxable income, the top of the 22% bracket falls at approximately $211,400. That leaves a conversion budget of roughly $151,400. Converting up to that amount keeps every dollar in the 22% bracket. Converting beyond it pushes income into the 24% bracket — still manageable, but worth a deliberate decision. 2026 Tax Bracket Income Range Conversion Strategy (MFJ) Note 10% $0 $24,800 Always fill during valley years — extremely low rate 12% $24,801 $100,800 Historically low; high priority for conversion 22% $100,801 $211,400 Most common 'filling' target for middle-income retirees 24% $211,401 $403,550 Target for higher-net-worth retirees with large IRAs 32%+ Over $403,550 Generally not the target; stop conversions before this point Source: Tax bracket estimates based on OBBBA-stabilized rates. Exact thresholds are inflation-adjusted annually. The goal is not to convert everything at once. It's to convert as much as possible each year at the lowest rate available, over as many years as the window stays open.
The financial case for Roth conversions becomes sharper when heirs are part of the picture. When a non-spouse beneficiary — an adult child, for example — inherits a traditional IRA, the SECURE Act's 10-year rule requires them to fully distribute the account within 10 years of the owner's death. If that heir is in their peak earning years, those distributions land on top of their existing income. A $1,000,000 inherited traditional IRA distributed over 10 years adds $100,000 of ordinary income per year — enough to push many professionals into the 32% or 37% bracket, or higher with state taxes. A $1,000,000 inherited Roth IRA has the same 10-year distribution rule, but the distributions are generally tax-free. The heir can let the entire balance compound for 10 years — potentially growing to $1,700,000 or more at 5% growth — and withdraw it all in year 10 without federal income tax.
Roth IRAs have two separate five-year requirements, and confusing them creates problems. The first rule applies to earnings: for investment gains in a Roth IRA to be distributed tax-free, the account must have been open for at least five years and the owner must be at least 59½. If you open your first Roth IRA at 62, you'll need to wait until 67 to access earnings tax-free. Converted principal is not subject to this restriction — only earnings. The second rule applies to converted principal for those under 59½. Each conversion starts its own five-year clock on the penalty-free withdrawal of that specific converted amount. If you're under 59½ and withdraw converted principal before five years have passed, the 10% early withdrawal penalty applies — even though you already paid income tax on it. For most of the 5575 demographic, the age-based exception to the early withdrawal penalty removes much of the complexity of the second rule. But anyone considering conversions in their late 50s with plans to access converted funds quickly should understand this distinction before proceeding.
The income limit on Roth conversions was eliminated permanently in|If your children inherit your traditional IRA while they're in their|That's not tax avoidance. That's tax arithmetic.
Tax bracket estimates based on OBBBA-stabilized rates. Exact