Roth conversions in the gap years before RMDs.
If you retire in your early sixties and your required minimum distributions don't start until 73, you have a decade-long window to convert pre-tax money to Roth at lower brackets. Used well, it can save six figures in lifetime taxes. Used carelessly, it costs you Medicare premium dollars you didn't see coming.
A Roth conversion is a voluntary tax event: you move money from a traditional IRA (or 401(k)) into a Roth IRA, pay ordinary income tax on the converted amount in the year of conversion, and the money grows tax-free from then on. No future RMDs. No future tax. For most retirees who plan ahead, conversions during the gap years are one of the highest-value tax moves available.
Why the gap years matter
The gap years are the period between when you stop earning (often 60–65) and when required minimum distributions kick in (age 73 under SECURE Act 2.0). During that window your taxable income is often dramatically lower than it was during your working years and lower than it will be once RMDs start. That's your conversion runway. Skip it and the IRS effectively makes the conversion decision for you — at the bracket you're in when RMDs land.
Filling brackets, not maxing them
The goal isn't to convert as much as possible; it's to fill the lower tax brackets and stop before the next bracket bites. If you're sitting in the 12% federal bracket with $20,000 of room before the 22% bracket starts, converting exactly $20,000 captures the cheap tax. Converting $30,000 means $10,000 of that conversion gets taxed at 22%. Often still worth it — but only if the math works for your situation.
The IRMAA cliff that trips people up
Roth conversions count as ordinary income for Medicare Income-Related Monthly Adjustment Amount (IRMAA) purposes. Cross an IRMAA threshold by one dollar and your Part B and Part D premiums jump for the entire following year — sometimes by hundreds of dollars per month, per spouse. Two years before you enroll in Medicare, your conversions don't matter for IRMAA. Two years before and onward, they very much do. Model the IRMAA brackets before you convert; never convert into one by accident.
Texas residents get a small but real edge
Texas has no state income tax. For converters in California or New York, a Roth conversion costs federal + state on the converted amount. For Texans, it's federal only. That doesn't change whether you should convert — it changes how much room you have to convert affordably. The break-even math is friendlier here.
What about Roth conversions for legacy?
If you don't need the money and your heirs are in higher brackets than you are, a conversion now shifts the tax burden from them (at their high rates) to you (at your lower rates). Under SECURE Act 2.0, non-spouse heirs generally must drain inherited IRAs within ten years, which compresses inherited-IRA distributions into the worst possible decade of their earning lives. Converting before death can be one of the more efficient inheritance moves available.
Common mistakes I see
Converting in December without modeling the full year's income. Converting from an IRA that has after-tax basis without filing Form 8606 to track it. Converting the wrong account first (Roth-from-401(k) when you have a tax-deferred IRA sitting around). Not coordinating with a spouse's RMDs. Converting too much in any single year and pushing into IRMAA + the next bracket simultaneously.
A simple framework
Project your taxable income for each year between now and age 73. Identify the years where you have the most room before a bracket or IRMAA tier. Convert into that headroom. Repeat annually. Adjust as income, markets, and tax law change. There's no single right answer — only the right answer for your situation, this year.
A conversion is one of the few financial moves where doing nothing has an explicit, calculable cost. Most retirees never run the numbers.