Roth Conversion Timing in 2026: The Windows, the Thresholds, and the Math

Susan retired at 62. She has a traditional IRA with $1.1 million, Social Security she hasn't claimed yet, and no pension. Her income from investments is modest — about $18,000 per year from dividends and interest.

For the next eight years — until she turns 70 and claims Social Security — her taxable income will be unusually low. Her standard deduction plus modest investment income means she's in the 12% bracket with significant room to spare.

That eight-year window is one of the best Roth conversion opportunities she'll ever have.

When she turns 73 and RMDs start, her income will jump. Social Security will be mostly taxable. Her effective tax rate will be higher than it is now. Every dollar converted at 12% today saves taxes at a higher rate later.

She's converting $35,000 per year. It takes discipline. But the math is clear.

Why Timing Is Everything

Roth conversions make sense when:

• Your current tax rate is lower than your expected future rate on withdrawals
• Future RMDs will be large and force income you don't need into high tax brackets
• You're in a low-income window between retirement and Social Security/RMD start
• Tax rates may increase (TCJA provisions are currently scheduled to partially sunset in 2026, though Congress has extended key provisions — the uncertainty alone is an argument for converting now)

They make less sense when:

• Your current rate equals or exceeds your expected retirement rate
• You'd need to use IRA funds to pay the conversion tax (versus paying from taxable savings)
• You're within 5 years of needing the money
• Converting would push you into a significantly higher bracket

The Key Thresholds to Watch

Sizing a Roth conversion isn't just about brackets. Several income thresholds create meaningful jumps:

Federal tax brackets (2026, married filing jointly):

Social Security taxation cliff:

• 0% of SS taxable below $32,000 combined income (MFJ)
• 50% of SS taxable at $32,000–$44,000
• 85% of SS taxable above $44,000

If you're already claiming Social Security, a Roth conversion that pushes your combined income above $44,000 causes more SS to become taxable. The effective marginal rate on a Roth conversion in this range can be significantly higher than the stated bracket.

IRMAA thresholds: IRMAA is based on MAGI from two years prior. A conversion in 2026 affects Medicare premiums in 2028. The first IRMAA cliff for married filers is at $212,000 MAGI. If your 2026 MAGI from a conversion crosses this threshold, your 2028 Part B premiums increase by approximately $74/month ($888/year per person).

The Optimal Conversion Window

Common high-value conversion windows:

When NOT to convert:

• Year of a property sale with large capital gains
• Year with large Roth 401(k) conversion if already happening through employer plan
• Year of a large Required Minimum Distribution that already fills your bracket

Calculating Your 2026 Conversion Amount

Here's a practical framework:

Step 1: Calculate your baseline taxable income — wages, Social Security (taxable portion), dividends, capital gains, and any pension income, minus deductions.

Step 2: Identify your target ceiling — the income level below the next bracket, IRMAA threshold, or SS taxation jump.

Step 3: Calculate the gap between baseline income and target ceiling.

Step 4: Convert that amount from your traditional IRA to Roth.

Example:

• Married couple, both 67, no employment income
• Baseline: $42,000 (SS + dividends)
• Target: Fill 22% bracket without crossing IRMAA threshold at $212,000
• Available bracket room: $206,700 − $42,000 = $164,700
• But IRMAA threshold is lower: $212,000 − $42,000 = $170,000
• Consider Social Security impact: already at $44,000 combined income — 85% of SS taxable regardless
• Reasonable 2026 conversion: $80,000–$100,000 (at 22%, doesn't trigger IRMAA for 2028)

This isn't a formula — it requires your specific numbers and a projection of the IRMAA consequences two years out.

Paying the Conversion Tax

The conversion amount is ordinary income. You'll owe taxes on it.

Best practice: Pay the conversion tax from taxable savings, not from the converted IRA funds. Using IRA funds to pay the tax:

• Reduces the amount actually converted
• May incur a 10% penalty if under 59½
• Represents a tax inefficiency — you're using tax-advantaged money to pay taxes

If you don't have sufficient taxable savings to pay the conversion tax, that's a signal to convert a smaller amount.

2026 Tax Rate Context

The Tax Cuts and Jobs Act originally set to partially sunset has seen several extensions. The current brackets are favorable by historical standards. Whether they remain in effect long-term is uncertain.

For retirement planning, this uncertainty is itself a reason to convert at known current rates rather than wait for certainty that may never come. Locking in tax-free Roth balances today is a hedge against higher rates in the future — regardless of whether those rates materialize.

Work with a retirement tax advisor to identify your optimal 2026 Roth conversion amount and model the long-term impact on your RMD trajectory and lifetime tax bill.