How to Actually Use Your Roth Window
The mechanics of converting during the gap years, step by step
A few months ago, I wrote about the most dangerous years of retirement, the quiet stretch between your last paycheck and your first Required Minimum Distribution. That piece made the case for why those years matter. This one is about what to actually do with them.
Knowing the window exists and knowing how to use it are two different things. Most of the retirees I meet have heard of Roth conversions. Very few have a plan for them. Fewer still understand why the order and pacing of conversions matter as much as the decision to convert at all.
Let me show you what this looks like in practice.
The Lowest Tax Bill of Your Life Is a Warning Sign
Robert came to see me last fall. He is 67, has been retired for 2 years, and his wife retired shortly after he did. Between them, they collect $58,000 in Social Security. They spend about $90,000 a year, and they cover the difference with roughly $32,000 in withdrawals from Robert's traditional IRA, which holds $1.1 million. They also have $250,000 in a brokerage account and a healthy cash reserve.
Robert's federal tax bill last year was a little over $4,000. He told me, with some pride, that it was the lowest amount he had paid since his twenties.
I understand the pride. But that low tax bill is not a victory. It is a warning sign. It means Robert is sitting in the lowest brackets of his life while a large deferred tax liability compounds quietly in the background—and that is exactly when to act.
Here is the projection. If that $1.1 million IRA earns a modest 6% per year, it will be worth roughly $1.56 million when Robert turns 73 and Required Minimum Distributions begin. An RMD is the amount the IRS forces you to withdraw from pre-tax retirement accounts each year, whether you need the money or not. His first one will be about $59,000. By age 80, it will be closer to $86,000. By 85, well over $100,000.Robert does not need $100,000 a year from his IRA. He needs $32,000. But the IRS does not ask what you need. Those forced withdrawals will stack on top of Social Security, push more of his benefits into taxation, and eventually shove him from the 12% bracket into the 22% bracket and beyond. The excess gets reinvested in a taxable account, where it generates even more taxable income.
Robert built this problem the same way most people do: one diligent 401(k) contribution at a time. The window to defuse it is open right now, and each January narrows it.
What the Window Actually Is
A Roth conversion is the act of moving money from a traditional IRA to a Roth IRA. You pay ordinary income tax on the amount you convert this year. In exchange, that money grows tax-free for the rest of your life, comes out tax-free, never generates an RMD, and passes to your heirs tax-free.
The gap years are the stretch between retirement and the year your RMDs begin. That is age 73 for most people retiring now, or 75 if you were born in 1960 or later. During those years, something unusual is true: your income is artificially low. The paycheck is gone. The forced withdrawals have not started. Your tax brackets are sitting half empty.
That emptiness is the asset. A conversion is simply a decision about when to pay a tax you already owe. Pay it now, while your brackets are empty, or pay it later, when RMDs have filled them up. Same money, but wildly different prices.
Bracket Room, Defined
The core concept is what I call bracket room: the distance between your current taxable income and the top of your target tax bracket.
For 2026, a married couple filing jointly stays in the 12% bracket up to $100,800 of taxable income, and in the 22% bracket up to $211,400. Taxable income means income after your deductions, and the standard deduction for a couple, Robert's age, runs north of $33,000 once you include the additional amounts for taxpayers 65 and older.
Robert's current taxable income is about $39,000. That means he has roughly $62,000 of room left in the 12% bracket every single year. Money converted in that space is taxed at 12 cents on the dollar. The same money, left in the IRA until RMDs force it out, will very likely come out at 22 cents or more. In some scenarios I describe below, considerably more is required.
That 10-point spread is the whole game. It is not exotic. It is not a loophole. It is simply choosing the cheaper year to pay a bill that is coming either way, and that choice is where value lives.
Five Steps to Work the Window
Here is the process I walk clients through. None of it is complicated, but the order matters.
First, calculate your bracket room for this year. Start with your expected taxable income: Social Security, pensions, interest, dividends, and any withdrawals you are already taking. Subtract that from the top of your target bracket. For most retirees in the gap years, the target is the top of the 12% bracket at a minimum, and often the top of the 22% bracket, because the income waiting behind your future RMDs will land in 22% or higher territory. The difference is your conversion capacity for the year.
Second, convert consistently rather than all at once. Converting the entire $1.1 million IRA in one year would put Robert in the top brackets and defeat the whole purpose. The math works because you spread conversions across the window, filling the cheap brackets each year without spilling into the expensive ones. Robert's plan calls for about $60,000 per year for six years. That moves roughly $360,000 out of the traditional IRA at 12%, money that would otherwise be taxed at 22% or worse, and that is its own payoff.
Third, pay the conversion tax from your taxable account, if possible. You can have taxes withheld from the conversion amount itself, and sometimes that is the only practical option. It is just not the ideal one. Every dollar withheld is a dollar that never reaches the Roth, which means you lose decades of tax-free growth on it, and if you are under 59 and a half, the withheld portion can even trigger an early withdrawal penalty. Paying from outside funds keeps the full conversion working for you. Robert's brokerage account exists for exactly this job. Paying roughly $7,000 of tax from taxable savings so that a full $60,000 can grow tax-free forever is one of the best trades available in retirement planning.
Fourth, coordinate around unusual income years. Selling a house, realizing a large capital gain, or receiving deferred compensation can eat your bracket room for a year. In those years, convert less or skip entirely. In years with unusually large deductions, such as major medical expenses, convert more. The plan flexes. The direction does not.
Fifth, model lifetime taxes, not this year's bill. This is where most do-it-yourself plans fall apart. A conversion always raises this year's taxes. Judged on a single year, it looks like a mistake every time. The only honest comparison is total taxes paid over your lifetime, and your spouse's, and often your children's. When Robert saw that his six-year conversion plan cost about $45,000 in taxes now and saved well into six figures over the life of the plan, the decision made itself.
One more note before you act on any of this. Conversions are permanent. Congress eliminated the ability to undo them back in 2018, so there is no reversing course if you overshoot a bracket. Measure twice. This is a place where an hour with a CPA before you convert is worth far more than a correction that no longer exists.
The Side Effects Nobody Prices In
Bracket arithmetic understates the case in both directions. Three things make the real math bigger than it looks.
The first is what tax professionals call the tax torpedo. As your income rises, more of your Social Security becomes taxable, up to a cap of 85%. That means the first dollars you convert can carry a higher effective rate than the bracket suggests, because each conversion dollar drags some Social Security into taxation along with it. Once you hit the 85% cap, the effect disappears, and your marginal rate settles down. The lesson is not to avoid converting. The lesson is to run the actual numbers instead of eyeballing the bracket table.
The second is Medicare. IRMAA, the Income-Related Monthly Adjustment Amount, is a surcharge added to Medicare premiums when your income crosses certain thresholds, starting around $218,000 for a couple in 2026. It works on a two-year lookback, so income at 63 or 65 can raise your premiums at 65 or 67. Large uncontrolled RMDs late in retirement are one of the most common causes of IRMAA surcharges I see. Conversions done deliberately in the gap years, sized to stay under the thresholds, are how you prevent that.
The third is the one nobody wants to think about, so I will be brief. When one spouse dies, the survivor keeps most of the income but files as a single taxpayer, where every bracket is roughly half as wide. A widow taking an $86,000 RMD on single-filer brackets lands in the 22% or 24% bracket almost immediately, and often crosses an IRMAA threshold at the same time. Every dollar you convert together at 12% is a dollar the surviving spouse will never be forced to withdraw alone at twice the rate. I will have much more to say about this in a future piece, but it belongs on this list because, for married couples, it is frequently the single largest number in the analysis.
And beyond your own lifetimes, there are your kids. Under current law, most children who inherit a traditional IRA must empty it within ten years, usually during their own peak earning years at rates of 24% or higher. A Roth passes to them tax-free. If leaving something behind matters to you, the conversion decision is partly theirs too.
When Conversions Do Not Make Sense
I would not be doing my job if I told you this works for everyone. It does not. If you are still earning a high salary, expect a large windfall, or already sit in a bracket you do not want to cross, pause before converting. Run the numbers first, then decide whether the window is truly open for you.
If you plan to leave your IRA to charity, stop. Qualified Charitable Distributions let you give pre-tax dollars directly from an IRA with no tax, which beats converting and giving after-tax money. If you have large pension income that keeps you in the 24% bracket or higher, even in the gap years, the spread that makes conversions work may not be available to you. If you genuinely expect to be in a lower bracket later, which is rare but happens, waiting wins. And if you cannot pay the conversion tax without raiding the IRA itself or compromising your cash reserves, the trade gets much weaker.
The point of the gap years is not that everyone should convert. The point is that everyone should run the projection. The retirees who get hurt are not the ones who chose not to convert. They are the ones who never looked.
The Deadline That Actually Matters
Here is the part that gives this strategy urgency without any salesmanship: Roth conversions are calendar-year transactions. A conversion for 2026 must be completed by December 31, 2026. There are no extensions. Miss the year and that year's bracket room is gone forever.
And the window itself is finite. Robert has six conversion years left. Next year he will have five. Every year that passes is a year of 12% bracket room that expires unused while the IRA grows larger and the eventual RMDs grow with it.
If you are in your gap years right now, the single most valuable thing you can do this month is run a projection of your RMDs at 73 and your lifetime taxes with and without conversions. You can do a rough version yourself with an online RMD calculator and this year's bracket tables. Or you can have someone like me build the full multi-year model, including Social Security taxation, IRMAA thresholds, and survivor scenarios. Either way, look at the numbers before this December, not after.
The brackets are sitting half empty. Fill them while they are.
If you found this useful, the companion piece is The Most Dangerous Years of Retirement Are the Quiet Ones, which covers why this window exists and why it goes unnoticed. For more retirement tax planning like this, subscribe to The Pensioner's Paradox, my free weekly newsletter, at phil.cpa.