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The gap between retirement and age 73 (RMDs) is the golden window for Roth conversions — pay 12-22% tax now to avoid 32-37% later.
After retiring but before Social Security/RMDs begin, your taxable income drops dramatically. This is the ideal time to convert traditional funds to Roth at low tax rates.
12-22%
Convert at Rate
During low-income years
32-37%
Avoid Future Rate
When RMDs + SS stack up
100%
Tax-Free at 73+
Roth has no RMDs
Cumulative Roth Conversion ($50K-$75K/year)
Traditional vs Roth in Retirement
| Feature | Traditional IRA/401(k) | Roth IRA |
|---|---|---|
| Required Distributions (73+) | Yes — forced taxable withdrawals | NONE — ever |
| Tax on Withdrawals | Taxed as ordinary income | Tax-FREE |
| Stacks with SS | Increases SS taxation | No impact on SS taxation |
| IRMAA (Medicare) | RMDs increase premiums | No impact on premiums |
| Inheritance | Heirs pay income tax | Heirs inherit tax-free |
Convert Amount = Top of Current Bracket − Current Taxable Income
Fill up low brackets: convert just enough to stay in the 12% or 22% bracket
Calculate Your 'Gap'
22% bracket tops at $94K (single) / $190K (married). Convert up to that limit each year.
Convert Over Multiple Years
Don't convert $1M at once (pushes you to 37%). Spread over 5-10 years at lower brackets.
Pay Tax from Outside Funds
Pay conversion tax from taxable accounts, NOT the IRA itself. Preserves full Roth balance.
Watch IRMAA Thresholds
Medicare surcharges hit at $103K+ (single). Don't convert so much you trigger IRMAA.
Consider State Taxes
Some states don't tax retirement income. Convert before moving TO a tax-free state.
Ages 60-72: The Sweet Spot
Don't Forget ACA Subsidies
Key Takeaways