The Roth Conversion Sweet Spot: How Much to Convert Before RMDs Begin
There is a stretch of years in most retirements when your tax rate falls to the lowest it will ever be. The paycheck stops. Social Security hasn't started. Required minimum distributions are still years away. For a couple with a paid-off house and a big traditional IRA, taxable income can drop close to zero.
Those years are the Roth conversion sweet spot. Money moved from a traditional IRA to a Roth during that window gets taxed at 10% or 12% instead of the 22%, 24%, or higher rate it might face later, when RMDs and Social Security stack up. The question is never really whether the window exists. It's how much to convert each year — and that comes down to arithmetic you can actually do.
What a conversion does
A Roth conversion moves money from a traditional IRA or 401(k) into a Roth IRA. The amount you convert counts as ordinary income in the year you convert it. You pay tax now. In exchange, the money grows tax-free, comes out tax-free, and — under current law — is never subject to required minimum distributions during your lifetime.
That last part matters more than most people realize. Every dollar you convert in your sixties is a dollar that won't be forced out of your account in your seventies and eighties at whatever rate applies then.
The window is wider than it used to be
Under the SECURE 2.0 Act, RMDs now begin at age 73 if you were born between 1951 and 1959, and at age 75 if you were born in 1960 or later.
If you were born in 1960 or after and retire at 60, that's potentially fifteen years of low-income tax years before your first RMD. Even retiring at 65 leaves a decade. Each of those years is a separate chance to convert a slice of your traditional balance at a low rate. Miss a year, and that year's low-bracket room is gone for good — bracket space doesn't roll over.
The 2026 numbers you're working with
Conversions are taxed as ordinary income, so the game is filling a target bracket without spilling into the next one. For 2026, per the IRS inflation adjustments:
The standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly.
For married couples filing jointly, the 12% bracket runs up to $100,800 of taxable income. The 22% bracket runs to $211,400, and the 24% bracket to $403,550. For single filers, those break points are $50,400, $105,700, and $201,775.
Here's what that means in practice. A married couple filing jointly can have $133,000 of gross income — $32,200 sheltered by the standard deduction, $100,800 filling the 10% and 12% brackets — before any dollar is taxed above 12%.
A worked example
Say you're a married couple, both 62, retired. You have $40,000 of ordinary income from a small pension and interest. After the $32,200 standard deduction, your taxable income is $7,800.
The top of the 12% bracket is $100,800. That leaves $93,000 of room. Convert $93,000 and your taxable income lands exactly at the bracket line.
The tax bill: the first $24,800 of taxable income is taxed at 10% ($2,480), and the remaining $76,000 at 12% ($9,120) — $11,600 total. You would have owed $780 without the conversion, so the conversion itself costs $10,820. That's an effective rate of about 11.6% on $93,000 moved permanently out of RMD territory.
If the same $93,000 came out later as an RMD stacked on top of Social Security and other income, much of it could easily be taxed at 22% or more — roughly double.
Couples with seven-figure traditional balances often go further and fill the 22% bracket, converting up to $211,400 of taxable income. Whether that makes sense depends on the rate you expect to face later — which is exactly the comparison worth modeling rather than guessing.
Three traps that aren't on the bracket chart
Filling a bracket is the easy part. Conversions raise your modified adjusted gross income, and several other systems key off that number.
The IRMAA lookback. Medicare premiums carry an income surcharge called IRMAA, and it looks back two years. Your 2026 premiums are based on your 2024 tax return. For 2026, the surcharge starts above $218,000 of MAGI for joint filers and $109,000 for single filers. A big conversion at 63 or later can raise your Medicare premiums at 65 — a cost that never shows up on the bracket chart. Cross a threshold by a single dollar and you pay the full surcharge for that tier.
ACA subsidies before 65. If you retire before Medicare and buy health insurance on the exchange, your premium credit is based on MAGI. A conversion raises MAGI dollar for dollar, and the lost subsidy acts like an extra tax on every dollar converted. For early retirees, this often matters more than the bracket itself.
The 0% capital gains bracket. For 2026, long-term capital gains are taxed at 0% up to $98,900 of taxable income for joint filers ($49,450 single). Conversions fill that space. If you were planning to harvest gains tax-free in the same year, the conversion can push those gains into the 15% rate. Pick one strategy per year, or size both together deliberately.
Two housekeeping rules round it out. Each conversion starts its own five-year clock before the converted amount can be withdrawn penalty-free if you're under 59½. And pay the conversion tax from cash in a taxable account if you can — every dollar of tax withheld from the conversion itself is a dollar that never makes it into the Roth.
When converting less — or nothing — is the right call
Conversions aren't automatic. If you expect your tax rate in retirement to be lower than your rate today, paying tax early is a loss, not a win. If you plan to give traditional IRA money to charity through qualified charitable distributions, those dollars may never be taxed at all — converting them first just adds a tax bill. And if you're planning a move from a high-tax state to a no-tax state, waiting a year or two to convert can change the state tax on the conversion from thousands of dollars to zero.
Timing within the year matters too. Many retirees convert in December, once the year's actual income is known, so the conversion can be sized to the bracket line instead of an estimate made in January.
Why this is a modeling problem, not a rule of thumb
Notice what the "right" conversion amount depended on in that example: your other income, your filing status, the bracket you're filling, your age relative to Medicare, whether you're on an ACA plan, whether you're harvesting gains, your state's tax treatment, and the rate you expect to pay decades from now when RMDs arrive. Change any one input and the answer moves.
That's why one-size advice like "always convert to the top of the 12%" fails people. A 58-year-old on an ACA plan and a 67-year-old on Medicare can have identical IRA balances and completely different right answers.
This is the kind of question Tally was built for. Its lifetime forecast models federal tax plus all 50 states, and its Roth conversion analysis lets you test a conversion plan as a what-if scenario — you see the tax bill this year and the effect on your lifetime runway, side by side, before you move a dollar. If you'd rather check the math than trust a rule of thumb, that's the way to do it.
The sweet spot is real, and it's measured in years, not tips. Every low-income year that passes unconverted is bracket space you don't get back.
Start your 14-day free trial at thetally.io — no credit card required.
Tally is not a tax advisor. Figures above are 2026 federal amounts from IRS inflation adjustments; confirm your own numbers before acting.