The Roth Conversion Window Most Pre-Retirees Are Missing Right Now

There's a tax planning window that closes the moment you stop working — and most people don't realize it's open until it's already shut.

It's the Roth conversion window. And if you're in the five to ten years before retirement, this may be the single highest-leverage financial move available to you right now.

Why the years before retirement are different

Your income peaks near retirement. Then it drops. Then — often significantly — it rises again once Social Security kicks in and Required Minimum Distributions begin at age 73.

The years between stopping work and those two income events can create a period of artificially low taxable income. That window is your Roth conversion opportunity. If you don't plan around it intentionally, you'll likely pay higher taxes on that money later than you needed to.

What a Roth conversion actually does

A Roth conversion moves money from a traditional IRA or 401(k) into a Roth IRA. You pay ordinary income tax on the amount you convert today. In exchange, that money grows tax-free and is never subject to Required Minimum Distributions.

The math works when the tax rate you pay today is meaningfully lower than the rate you'd pay later. In many cases — especially for people with large pre-tax retirement accounts — it is.

Why this connects to comprehensive tax planning

Roth conversions don't exist in isolation. How much you convert each year has to be coordinated with Medicare IRMAA thresholds, Social Security taxation, capital gains rates, and state income taxes. Texas has no state income tax, which changes the calculus significantly relative to states that do.

Good tax planning isn't about any single move. It's about coordinating every income source, every account type, and every tax lever available in a given year. That's what comprehensive planning looks like in practice.

The question I ask every client

Before we talk about how much to convert, I ask: what tax rate do you expect to be in at 75? At 80?

Most people haven't thought about it. When they do, the answer is often: higher than expected. Social Security, RMDs, and other income can stack up quickly in ways that are hard to reverse.

Roth conversions are one of the few tools that let you do something about future tax exposure now — while you still have control over the timing.

This is a decision with a deadline

If you retire this year or next, the window may already be partially open. If you're five years out, you have time to build a multi-year conversion strategy. Either way, this isn't something to defer.

The longer you wait to start the conversation, the fewer years you have to spread the conversions across. April 15 has come and gone, but tax planning isn't seasonal. It's a year-round discipline. And for most pre-retirees, the best time to start thinking about Roth conversions is now.

If you'd like to explore whether a Roth conversion strategy makes sense for your situation, schedule a conversation with us.