The Roth Conversion Ladder: Quietly the Best Tax Move of Your 60s

Most people stop contributing to retirement accounts the day they stop working. Many sophisticated savers don't. They start converting.

The setup

For decades you saved into traditional 401(k)s and IRAs. Every dollar in those accounts is a dollar the IRS hasn't taxed yet. Starting at age 73 (75 for some), Required Minimum Distributions (RMDs) force you to withdraw — and pay taxes — whether you need the money or not.

That's why the window between retirement (often early-to-mid 60s) and your first RMD is so valuable. You usually have:

• Low or zero earned income
• Full control over what you "show" on your tax return
• Room inside the 12%, 22%, or 24% brackets

What a Roth conversion actually is

You move dollars from a traditional IRA into a Roth IRA, pay ordinary income tax on the amount converted, and from that point on the money grows — and is withdrawn — tax-free.

A simple ladder

You don't convert everything at once. You "ladder" conversions across multiple years to fill up specific tax brackets without spilling into the next one.

1. Estimate your taxable income for the year.
2. Identify the top of your current bracket (e.g., 22%).
3. Convert just enough to reach — but not exceed — that ceiling.
4. Pay the tax from a taxable account, not the IRA itself.

Where conversions go wrong

• Triggering IRMAA — Medicare premium surcharges kick in at specific income levels. Cross the line by $1 and your premium can jump $1,000+.
• Pushing Social Security into more taxation.
• Converting too late. Once RMDs start, the strategy gets much harder.

When conversions don't make sense

They're not for everyone. Conversions may not be a fit if:

• Your retirement tax bracket will clearly be lower than today.
• You plan to leave the IRA to charity.
• You have no taxable account to pay the conversion tax from.

A Roth conversion is a tax decision. Talk to a qualified tax professional before pulling the trigger — ideally well before December 31.