Roth Conversion Window: How to Use Your Low-Tax Years
A Roth conversion is a bet that you will pay less tax on that money now than you would later. The "window" is the stretch of low-income years when that bet is cheapest, and for many retirees it is shorter than they think. The 2025 tax act made today’s brackets permanent, so there is no deadline forcing you to act. What matters is your own income curve, and the ceilings that sit along it.
Meet Sam and Lee
Sam and Lee* are both 63 and recently retired. They have $40,000 of other ordinary income, no Social Security yet, and $1.5 million in traditional IRAs. For a couple filing jointly in 2026, the standard deduction is $32,200, so only $7,800 of that $40,000 is taxed. A conversion is taxed on top of it as ordinary income.
How much they convert decides the rate they pay:
$93,000 fills the 12% bracket. Federal tax is about $10,820, an effective rate of 11.6%.
$178,000 takes their income to $218,000, the first Medicare surcharge threshold for couples. Federal tax is about $29,520, or 16.6%.
$203,600 fills the 22% bracket but crosses that Medicare threshold. Federal tax is about $35,152, or 17.3%, plus a premium surcharge two years later.
The first slice is cheap. Each later slice costs more, and one of the steps has a cliff.
Who has a window
Early retirees between the last paycheck and the start of Social Security and required minimum distributions (RMDs).
Anyone with a low-income year: a sabbatical, a business loss, a big deduction year.
People about to move. States generally tax retirement income only for residents, and federal law generally bars taxing nonresidents on it, so timing a conversion before or after a move can change the state bill. California taxes a conversion as ordinary income.
The ceilings to watch
The federal brackets are only one limit. Conversion income also counts toward other thresholds.
Medicare IRMAA: surcharges start at $109,000 of income for singles and $218,000 for couples in 2026, based on income from two years earlier. A conversion at 63 can raise premiums at 65. It is a cliff, so a dollar over the line costs the full surcharge for the year.
ACA subsidies: if you buy marketplace coverage before Medicare, the enhanced subsidies expired at the end of 2025 and the 400%-of-poverty-level cliff is back. A large conversion can wipe out your subsidy. Check whether Congress has changed this before you convert.
Senior deduction: the temporary $6,000 deduction per person 65 and older phases out between $150,000 and $250,000 of income for couples, and ends after 2028. Conversion income can shrink it.
Where the window sits in life
Traps that catch people
You cannot undo it. Since 2018, a Roth conversion cannot be recharacterized back to a traditional IRA. Run the numbers before December 31.
Pay the tax from outside the IRA. Using IRA money to pay the bill shrinks what moves to the Roth, and before 59½ it can add a 10% penalty.
The pro-rata rule. If you have after-tax money in any traditional IRA, part of every conversion is taxable, no matter which account you convert from.
RMD first. Once you are subject to RMDs, you must take that year’s RMD before converting. The RMD itself cannot be converted.
How to plan it
Project the year in the fall. You can convert any time before December 31, when your income for the year is known.
Convert in slices, not all at once. Fill the bracket you are comfortable with, then stop before the next ceiling.
Look two years ahead. Check Medicare and ACA effects, not only this year’s tax.
Repeat each year. The right size changes as income, markets and law change.
*Illustration: married couple filing jointly, both 63, $40,000 of ordinary income, 2026 federal brackets and standard deduction, conversion taxed as ordinary income; state tax and Social Security ignored. Your numbers will differ. Not tax advice.
