What Is the Roth Conversion Window?

Money in a traditional 401(k) or IRA hasn’t been taxed yet. It’s generally taxed as income when it comes out, unless it goes to charity (through qualified charitable distributions from an IRA, from age 70½). Until 2006, people saving in their 401(k)s had no Roth option, so people retiring now may have a lot of their savings pre-tax. The Roth conversion window is the stretch of years after work stops and before required withdrawals start, when taxable income can be low. In this illustration, a couple with $3.2 million pre-tax at 65 drops to the 12% bracket in retirement, rises to 24% when required withdrawals start at 75, and the surviving spouse reaches 35% filing single. Converting to a Roth each year from 65 to 74, up to the top of the 22% bracket, means paying tax at 22% in those years instead of at higher rates later: the couple stays at 22% through 84, and the survivor at 24%. Their average federal rate from 65 to 92 comes out about 17.5% instead of about 20.2%. Converting can also cost more, if tax rates turn out lower later, and a conversion can’t be undone.

Retiring with a big 401(k)

Retiring with a big 401(k) can look like the start of lower taxes, and for a few years it can be. The paycheck stops, and a pension, Social Security and some taxable interest might put a couple in the 12% bracket. Then required withdrawals start, at 75 for anyone born in 1960 or later. They’re figured from the account’s balance, so a large balance means large withdrawals, and in this example they push the couple into the 24% bracket.

When one spouse passes, the survivor files single on nearly the same income, and single brackets are half as wide as a couple’s up through the 32% bracket. Here, that means 35% for the surviving spouse. In this example, whatever is left then goes to their kids: adult children who inherit an IRA generally have to empty it within 10 years, on top of their own income.

Using the lower-tax years

A Roth conversion moves money from a pre-tax account to a Roth. The amount converted is taxed as income that year; after that, qualified withdrawals from the Roth are tax-free. In this example, the couple converts each year from 65 to 74, up to the top of the 22% bracket: about $151,000 a year. They pay more tax in those years than they would doing nothing. In return, their required withdrawals later are smaller: they stay in the 22% bracket through 84, and the survivor stays in 24%.

Converting has costs. The tax is due in the year of the conversion; in this example, it’s paid from savings outside the IRA. A conversion raises the income Medicare looks at two years later, which can mean higher premiums, and it can make more of their Social Security taxable. It can’t be undone. And if tax rates turn out lower later than the rate paid to convert, converting costs more than doing nothing.

Weighing your situation

Every situation is different. Whether converting fits, and how much, depends on:

• How big the pre-tax balances are next to other savings, and whether there’s cash outside the IRA to pay the conversion tax.
• Other income in retirement (a pension, interest, Social Security), and when Social Security starts.
• How long each spouse lives; the survivor’s single brackets are where the gap is widest.
• Who inherits, and their own brackets when the 10-year rule makes them empty an inherited IRA.
• Charitable giving: qualified charitable distributions can satisfy required withdrawals without adding them to taxable income, and money left to charity owes no income tax, which can favor keeping some of it pre-tax.
• Medicare premium surcharges: Medicare charges more for Part B and Part D when income is higher, based on the tax return from two years before. In this example, converting adds a surcharge at the lowest tier from 67 to 76. Doing nothing adds none in those years, but its larger required withdrawals bring a higher-tier surcharge from 78 to 84. After one spouse passes, the survivor pays a surcharge either way. The surcharges aren’t in the average rates above; they’re a topic of their own.
• Retiring before 65: conversions can reduce marketplace health insurance credits.
• Required withdrawals start at 75 for people born in 1960 or later (73 for those born 1951–1959).
• In Illinois: under current rules, the state doesn’t tax distributions from IRAs and 401(k)s, and it treats an amount converted to a Roth the same way. Both are subtracted from Illinois income, as Social Security is. So for Illinois residents, converting doesn’t add state tax, and the decision comes down to federal tax. Other states differ, and moving to or from another state can change the math.

Comparing every year

The chart shows the couple’s taxable income each year, both ways. Doing nothing, their top bracket goes from 22% while working to 12%, then 24% and 35%. Converting, it stays at 22% through 84 and reaches 24% for the survivor. Converting, their children inherit about $3.0 million in a Roth and about $1.4 million pre-tax; doing nothing, about $2.4 million, all pre-tax. Those are account balances, before the income tax the children pay on the pre-tax part. The tax on the conversions came out of the couple’s taxable savings, so converting leaves less there: about $2.3 million at 92 instead of about $4.3 million. A Roth they inherit generally has to be emptied within 10 years too, and generally comes out tax-free once the account has been open five years; the pre-tax part is taxed as income when they take it.

Assumptions. A married couple, both 60 in 2026:

• Saving $34,000 a year pre-tax (employee and employer) from 30 to 65, growing 5% a year after inflation while working, which reaches about $3.2 million at 65; 3% a year after inflation from 65.
• $195,000 a year of taxable wages to 65.
• $1.0 million of taxable savings at 60, growing 2.5% a year after inflation and treated as principal when spent (no capital gains).
• Retiring at 65, spending $140,000 a year after tax, from taxable savings first; the tax on conversions is paid from those savings too.
• In retirement, a $25,000 pension and $15,000 of interest and dividends a year; Social Security claimed at 65, $39,000 and $26,900 a year in today’s dollars.
• The first death at the end of 84, so the survivor files single from 85 to 92.
• Two adult children, each married filing jointly with $160,000 of their own taxable income, inherit the IRA and spread its withdrawals evenly over 10 years. Because the parents had already started required withdrawals, the 2024 final rules also require the children to take at least a minimum each year in years 1 to 9, then empty the account by the end of year 10. Spreading it evenly, as here, takes out more than those yearly minimums.
• 2026 federal brackets, standard deductions and Medicare surcharge tiers held constant in today’s dollars; the temporary $6,000 senior deduction (2025–2028) left out. Federal income tax only.

Figures: Toft Wealth calculation [9].

This is an illustration. The couple, their savings and their income are chosen to show how tax brackets can change over a retirement. It is not the result of any actual account or Toft Wealth portfolio, and not a forecast. It assumes retirement accounts grow 5% a year after inflation while working and 3% after 65, every year, before fees and expenses, and holds 2026 federal tax law constant. Actual returns vary and can be negative, and tax law can change. With lower growth the difference between converting and not shrinks, and it can reverse.