Roth Conversion
Pay tax NOW on Traditional IRA / 401(k) dollars to convert them into a Roth — future growth and withdrawals become tax-free forever.
Why convert
Traditional retirement accounts are tax-deferred — every dollar is taxable on withdrawal AND counts toward your RMDs at 73/75. Roth dollars are tax-free out and have NO RMDs. Converting in low-income years (early retirement, sabbatical, business loss) can lock in today's bracket on tomorrow's growth.
The window
The 'sweet spot' is usually the years between retirement and the start of Social Security + RMDs — often ages 60–73. Filling up the 12% and 22% brackets in those years can save 6-figures of lifetime tax.
Watch the cliffs
Conversions raise Modified AGI — which can spike Medicare IRMAA premiums (with a 2-year lookback), trigger the Net Investment Income Tax, and push Social Security taxation higher.
Watch out for
- •No do-overs — recharacterizations were eliminated in 2018.
- •Pay the conversion tax from OUTSIDE the IRA, otherwise you torch the math.
- •Coordinate with ACA subsidies if pre-Medicare.
Educational only — not tax, legal, or investment advice. Talk through your specific situation with a qualified advisor.