Roth Conversions in Your 60s: A Tax-Saving Playbook

Why the 60s window is unique

Between retirement and the start of RMDs at 73 (or 75 if you were born in 1960 or later, thanks to SECURE 2.0), many retirees have their lowest taxable income in decades. No more W-2. Social Security delayed to 70. No required IRA withdrawals yet. That's the cheapest time to convert traditional IRA dollars to Roth.

What a Roth conversion actually does

You move money from a traditional IRA (pre-tax) to a Roth IRA (after-tax). You pay ordinary income tax on the converted amount in the year of conversion. In exchange, that money — plus all future growth — is tax-free forever, with no RMDs ever, and passes to heirs tax-free for 10 years.

The classic playbook

1. Retire (or semi-retire) in your early 60s. Live off cash, taxable brokerage, or a small pension. Defer Social Security.
2. Each year, convert just enough to fill up the 12% or 22% bracket — but not so much that you tip into the 24% or 32% bracket.
3. Repeat for 8–10 years until RMDs begin.
4. By age 75, your traditional IRA is much smaller, so your RMDs are much smaller, so your taxable income (and Medicare premiums) stay lower for the rest of your life.

A worked example

Single retiree, age 65, has $1,000,000 in a traditional IRA and $400,000 in taxable brokerage. Annual spending: $60,000, funded from brokerage. Taxable income before conversion: ~$0.

The top of the 12% bracket in 2026 is around $48,000 for single filers (after the standard deduction). She converts $48,000/year for 8 years = $384,000 converted at 12%. Total tax paid: ~$46,000.

If she instead waited until RMDs at age 73, the same $384,000 would likely be withdrawn at the 22% or 24% bracket (because Social Security and RMDs stack), costing ~$90,000 in tax. Savings: ~$44,000, plus all the Roth growth from age 65 onward is tax-free.

Watch out for IRMAA cliffs

Medicare Part B and Part D premiums (the IRMAA surcharge) jump at specific income thresholds — $103,000 for single filers in 2026, $206,000 joint. A Roth conversion that pushes you $1 over the threshold can cost $900+/year in extra Medicare premiums for two years (IRMAA looks back 2 years). Always model conversions against the IRMAA brackets, not just income tax.

The 5-year rule (two of them)

• Each conversion has its own 5-year clock. Withdrawing the converted principal before 5 years and before age 59½ triggers a 10% penalty. After 59½, the penalty disappears — just the clock matters.
• Roth earnings are tax-free only if your first Roth account is at least 5 years old AND you're 59½. Open even a $100 Roth IRA today if you've never had one — start the clock.

Don't convert if…

• You'll be in a lower tax bracket later (rare for retirees, common for current workers).
• You have only IRA money to pay the tax on the conversion (paying conversion tax with IRA dollars destroys most of the benefit).
• You're applying for ACA subsidies — extra income can wipe out the premium credit.
• You plan to leave the IRA to charity — charities don't pay income tax on inherited IRAs anyway.

Mechanics

Most brokerages (Fidelity, Schwab, Vanguard) let you do a Roth conversion in two clicks from the traditional to the Roth account. You'll get a 1099-R the following January. Withhold zero tax from the conversion itself — pay it from taxable accounts via estimated payments instead.

Bottom line

For most retirees with $500k+ in traditional IRAs, converting $50k–$120k per year through your 60s can save six figures in lifetime taxes and dramatically reduce your heirs' tax bill on the inherited IRA. Run the math with a CPA before the year ends — conversions can't be undone after Dec 31.