There's a window in retirement that most people don't know exists, and by the time they find out about it, it's often already closing.
It opens the day you stop working. It closes the day your Required Minimum Distributions begin (currently age 73 under the SECURE 2.0 Act). And in between, for many retirees, there's a period of unusually low taxable income that represents one of the best tax planning opportunities of your entire financial life.
It's called the Roth conversion window. And if you use it well, it can save your family hundreds of thousands of dollars in lifetime taxes.
Why This Window Exists
To understand why this window matters, you need to understand what drives your taxable income in retirement.
Before you retire, your income is dominated by your salary or business income. After RMDs begin at 73, your income is driven by Social Security, RMDs from your traditional IRA and 401(k), and any other distributions you take. Both phases tend to push you into higher tax brackets.
But in between, something interesting happens. You've stopped working, so your earned income drops to zero. You may not have started Social Security yet (especially if you're delaying to 70 for the higher benefit). Your RMDs haven't started. If you're living off savings or a modest portfolio withdrawal, your taxable income can be dramatically lower than it was during your working years, sometimes low enough to put you in the 12% or even 10% federal bracket.
That's the window. And it's the ideal time to convert traditional IRA or 401(k) dollars to Roth.
What a Roth Conversion Actually Does
When you convert traditional retirement funds to a Roth IRA, you pay ordinary income tax on the converted amount in the year of conversion. In exchange, those dollars grow tax-free and are never subject to RMDs. Qualified withdrawals in retirement are completely tax-free.
The math works in your favor when the tax rate you pay today on the conversion is lower than the tax rate you (or your heirs) would have paid on those dollars later. And that's exactly the situation the Roth conversion window creates.
Here's a simplified example. Suppose you retire at 63 with $1.2 million in a traditional IRA and $300,000 in a taxable brokerage account. You delay Social Security until 70. Your RMDs won't start until 73. From age 63 to 70, your taxable income might be quite low, perhaps $40,000 to $50,000 per year from portfolio withdrawals. That puts you in the 12% or 22% federal bracket, depending on your filing status and deductions.
If you do nothing, here's what happens: your traditional IRA continues to grow, untouched, until age 73. At that point, the IRS requires you to start taking distributions. On a $1.2 million IRA growing at 6% annually for 10 years, you'd have roughly $2.1 million. Your first RMD would be approximately $77,000. Add Social Security, and your taxable income could easily push you into the 24% or 32% bracket, where it may stay for the rest of your life.
If instead you convert $50,000 to $80,000 per year during the window (filling up the 22% bracket each year), you systematically reduce the IRA balance that will eventually be subject to RMDs, and you build a tax-free Roth balance that can grow for decades without ever triggering a required distribution.
The IRMAA Problem
There's another reason to think carefully about Roth conversions before RMDs: Medicare.
Medicare Part B and Part D premiums are income-based. If your Modified Adjusted Gross Income (MAGI) exceeds certain thresholds, you pay surcharges called IRMAA (Income-Related Monthly Adjustment Amount). In 2025, a married couple with MAGI above $212,000 pays an additional $838 per year per person in Part B premiums alone. At higher income levels, the surcharges are significantly larger.
Large RMDs can push retirees into IRMAA territory unexpectedly, sometimes permanently. Roth conversions during the window, done carefully to stay below IRMAA thresholds, can reduce the RMD burden enough to keep Medicare costs manageable for the rest of retirement.
The Bracket-Filling Strategy
The most common approach to Roth conversions during the window is what planners call "bracket filling." The idea is to convert just enough each year to fill up a lower tax bracket without crossing into the next one.
For a married couple filing jointly in 2025, the 22% bracket runs from roughly $94,300 to $201,050 in taxable income. If your income from portfolio withdrawals and other sources puts you at $60,000, you have roughly $34,000 of room in the 22% bracket before you'd cross into 24%. Converting $34,000 from your traditional IRA to Roth costs you 22 cents on the dollar today, and those dollars will never be taxed again.
Done consistently over 7 to 10 years, this strategy can meaningfully reduce the traditional IRA balance subject to RMDs, lower lifetime Medicare costs, reduce the tax burden on a surviving spouse (who will file as single after the first spouse dies, facing higher tax rates on the same income), and leave a more tax-efficient legacy for heirs.
What to Watch Out For
Roth conversions during the window are powerful, but they require careful execution. A few important considerations:
Social Security taxation. Up to 85% of Social Security benefits can be taxable, depending on your combined income. If you're collecting Social Security while doing conversions, the conversion income can trigger additional Social Security taxation, effectively raising your marginal rate higher than the bracket alone suggests.
The 5-year rule. Each Roth conversion has its own 5-year holding period before converted funds can be withdrawn penalty-free (if you're under 59½). If you're already over 59½, this is generally not an issue, but it's worth understanding.
State taxes. Federal brackets are only part of the picture. Some states tax Roth conversions; others don't. North Carolina, for example, taxes retirement income including Roth conversions at a flat rate. This affects the math.
The right amount. Converting too aggressively can push you into higher brackets, trigger IRMAA surcharges, or increase the taxation of Social Security. The goal is precision, not speed.
Is the Window Right for You?
The Roth conversion window is not a universal strategy. It works best when you have a meaningful balance in traditional retirement accounts that will generate large RMDs, when you expect to be in a higher tax bracket in your 70s and 80s than you are now, when you have funds outside your IRA to pay the conversion taxes (so you're not shrinking the IRA to pay the tax bill), and when you have a surviving spouse who will face higher tax rates as a single filer.
If you retired at 65 with a modest IRA, already collecting Social Security, and plan to start RMDs at 73 with relatively low income, the math may not favor aggressive conversions. But if you have a large traditional IRA, a delayed Social Security strategy, and a 7 to 10 year window before RMDs, this is one of the most impactful tax planning moves available to you.
The window doesn't stay open forever. And once RMDs begin, your flexibility narrows considerably. The time to plan is now.
Jason Rindskopf is the founder of Two Waters Wealth Management and creator of the SMART Retirement Blueprint®. He works with high-achieving professionals and couples in the Charlotte, NC area who are within 10 years of retirement or recently retired. If you'd like to talk through your Roth conversion strategy and tax planning in retirement, book a complimentary consultation here.