For many people in their 50s, retirement is no longer a distant concept. It’s a looming reality.
One of the most impactful tax moves you can make is converting traditional retirement savings into a Roth IRA. But the decision isn’t simple. Roth conversions come with trade-offs, and timing matters.
If you’re over 50, here’s what you need to know to decide whether, how, and when to convert.
Why consider a Roth conversion after 50?
There’s a common myth that Roth IRAs are only for young savers. But after age 50, the case for converting can become even more compelling.
As you approach retirement, you may have fewer earning years left, which can temporarily drop you into a lower tax bracket. When you turn 73, you must take required minimum distributions (RMDs) from traditional IRAs. Roth IRAs do not require RMDs during your lifetime.
This flexibility can be crucial in minimizing the tax burden associated with Social Security and Medicare as you move into your later retirement years. By carefully managing your withdrawals and income sources, you can potentially lower the taxes you must pay, thereby keeping more of your retirement benefits intact.
Contributing to a Roth IRA can also significantly benefit beneficiaries. When you die, your beneficiaries can inherit a Roth IRA and withdraw funds tax-free, provided the account was opened for at least five years.
Here’s another benefit.
Since contributions to a Roth IRA are made with after-tax dollars, all earnings grow tax-free. The growth that accumulates over time can be fully available to your heirs without taxes eroding the value of their inheritance.
Understand how Roth conversions work
A Roth conversion involves transferring assets from a traditional IRA (or 401[k], if rolled over) into a Roth IRA. When you do this, you pay ordinary income tax on the converted amount in the year of the conversion.
There’s no 10% penalty for converting, even if you’re under 59½. But taxes are due immediately. For this reason, Roth conversions should generally be done using outside funds to pay the tax bill.
The tax bracket sweet spot
The key to Roth conversions is managing your tax bracket. Many people are in their peak earning years after age 50. However, if you retire in your early 60s, there may be a window between retirement and when Social Security or RMDs kick in, when your taxable income is lower.
That window, from retirement to age 73, is your “conversion opportunity.” During these years, you might be in a much lower tax bracket than you were during your working years or will be later in retirement.
For example, say you retire at 62. You don’t take Social Security until 70, and RMDs don’t start until 73. During this time, you can convert portions of your IRA each year, staying below a chosen tax threshold (like the 22% or 24% marginal bracket), effectively smoothing your lifetime tax liability
How to plan conversions by tax bracket
A common strategy is to “fill up” your current bracket. Here’s how it works:
- Estimate your annual income, including wages, dividends, interest, and other sources.
- Identify the top of your current tax bracket.
- Convert just enough Roth IRA funds to bring your total taxable income to that threshold.
This approach avoids jumping into a higher tax bracket while taking advantage of lower rates.
For instance, in 2025, the 22% bracket for married couples filing jointly ends at $206,700. If your income is $160,000, you could convert roughly $46,000 without moving into the 24% bracket (numbers are illustrative; tax brackets may change).
Other factors
While tax brackets are the most obvious factor, they’re not the only one. Here are others you should weigh:
Medicare premiums: Roth conversions increase your modified adjusted gross income (MAGI), which can raise Medicare Part B and D premiums if your MAGI exceeds certain thresholds (called IRMAA brackets). For 2025, IRMAA surcharges kick in at $212,000 for joint filers.
Social Security taxation: If you’ve started receiving Social Security, Roth conversions can make more of your benefits taxable. It may be prudent to delay conversions until after retirement before claiming Social Security.
State taxes: Some states don’t tax retirement income. If you plan to move to a lower-tax state (or a no-income-tax state), consider delaying your Roth conversion until you relocate.
Time horizon: The longer you can keep Roth assets invested, the more powerful the conversion becomes. Ideally, you won’t need to touch the Roth account for at least 10 years.
Legacy goals: Roth IRAs can be an excellent estate planning tool if you plan to leave money to heirs. Beneficiaries must take RMDs from inherited Roth IRAs, but those withdrawals will be tax-free.
A middle-ground strategy
You don’t have to convert your entire IRA at once. Large conversions can spike your income and generate a hefty tax bill. Instead, consider doing partial conversions over several years.
This strategy allows you to manage taxes, stay within your bracket, and optimize Medicare and Social Security timing.
It also provides flexibility. You can stop, adjust, or skip conversions as circumstances change.
What about required minimum distributions?
Once RMDs start at 73, you can no longer convert those RMDs to a Roth. However, you can still convert amounts above your RMD.
That’s why many advisors recommend completing most of your planned Roth conversions before RMDs begin. It gives you complete control over how much you convert and when.
Work with a qualified advisor
Roth conversions require careful planning. Every decision affects not just this year’s taxes but your long-term financial picture. A qualified financial planner or CPA can account for potential changes in tax law, simulate the impact on Medicare premiums, and model various Social Security strategies.
Final thoughts
After age 50, Roth conversions can be a powerful tool in your retirement toolbox. The right move depends on your tax situation, income sources, plans, and estate goals.
