If you have a traditional IRA or 401(k), part of that money was never really yours. The IRS has a claim on every pre-tax dollar in the account, and it will collect one way or another. The only question is whether you decide when, or they do. Right now, a temporary tax deduction has opened a Roth conversion window that closes after 2028, and most retirees don’t know it exists.
What a Roth Conversion Actually Does
First, let’s be precise. A Roth conversion is not a contribution. You’re not adding new money. You’re moving existing money from a traditional IRA or 401(k), money that has never been taxed, into a Roth IRA. The amount you convert gets added to your taxable income that year, and you pay ordinary income tax on it.
Paying tax now sounds like a bad deal. But deferral only wins if your tax rate later is lower than your rate today. For many retirees, the opposite is true. Required minimum distributions, Social Security taxation, and Medicare surcharges can push your rate in your 70s above what you’d pay right now. A Roth also has no required minimum distributions during your lifetime, and your heirs inherit it without owing income tax on the withdrawals.
So the real question is never “is a Roth better?” It’s “what rate do I pay converting now versus the rate I’ll be forced into later?”
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The New Senior Deduction That Changes the Math
Here’s the part most people are missing. The 2025 tax law created a temporary deduction of $6,000 per person age 65 and older, or $12,000 for a couple when both spouses qualify. It runs only through tax year 2028, and it stacks on top of everything else.
For 2026, a married couple both 65 or older can stack three layers:
- Standard deduction: $32,200
- Age 65 additional deduction: $3,300 ($1,650 per spouse)
- New senior deduction: $12,000
That’s $47,500 in total deductions. A couple with little other income, say they haven’t claimed Social Security yet and RMDs haven’t started, could convert up to $47,500 from a traditional IRA to a Roth and owe zero federal income tax. Even with some income, they might convert $20,000 to $40,000 in the 10% or 12% bracket.
One caveat: the senior deduction phases out above $150,000 of modified adjusted gross income for couples, or $75,000 for singles. But even a partial deduction can be worth it.
After 2028, that $12,000 disappears. The conversion that costs a couple nothing in 2027 costs real money in 2029. That’s the window.
The Tax Problem Waiting If You Do Nothing
Required minimum distributions begin at age 73, or 75 if you were born in 1960 or later. The IRS divides your prior year-end balance by a life expectancy factor. At 73, that factor is 26.5, so a $1 million IRA forces out roughly $37,700 in year one, whether you need it or not. Each year, the factor shrinks and the distribution grows.
Those RMDs stack on top of your other income. Push high enough and up to 85% of your Social Security benefit becomes taxable. Push higher and you trigger IRMAA, the surcharge on Medicare Part B and Part D premiums. The cruel irony: the account you built for financial freedom starts taking some of it back.
Your Conversion Runway
The best years to convert are usually the gap between retirement and your RMD start date, when your earned income is gone, Social Security may not have started, and your taxable income is the lowest it will be for the rest of your life. For most people, that gap runs five to ten years. The senior deduction widens this runway through 2028, but only through 2028.
Five steps to use it:
- Find your RMD age and count backward. Born in 1960 or later? RMDs start at 75. The years between now and then are your runway.
- Know your current bracket. If you’re in the 12% bracket now and RMDs will push you to 22%, the case for converting is strong.
- Watch three ceilings: the top of your bracket, the Social Security taxation thresholds ($32,000 and $44,000 combined income for couples), and the IRMAA lines ($218,000 for couples in 2026, based on income from two years prior). Crossing an IRMAA bracket by even $5,000 is expensive.
- Pay the conversion tax from outside the IRA. Use cash or a brokerage account so every converted dollar lands in the Roth.
- Model it before you do it, every year. Conversion amounts, bracket thresholds, two-year lookbacks, and RMD projections are multivariable math that’s easy to get wrong on a spreadsheet. Good planning software that maps your brackets year by year, or a session with a qualified planner, pays for itself here.
The takeaway: the senior deduction gives retirees over 65 a wider tax-free corridor for Roth conversions, but only through 2028. You don’t need to convert everything or convert aggressively. Even modest annual conversions inside your bracket can mean meaningfully more spendable income later. The most expensive mistake is the one made by default.
This article is for educational purposes only and is not personalized tax, legal, or financial advice. Tax rules and thresholds change, so confirm your situation at IRS.gov or with a qualified tax professional before converting.
Note Boldin is an affiliate relationship of Holy Schmidt!. This means if you purchase a product or use their service, we earn a small commission. This does not increase your cost.
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