Converting a traditional IRA to a Roth after age 60 moves your retirement savings from tax-deferred to tax-free, but the converted amount is added to your taxable income for that year. Whether it’s worth doing comes down to a single comparison: the rate you’d pay on the conversion now versus the rate you (or your heirs) would pay on traditional IRA withdrawals later. People past 60 are often in a strong position to run that math because their income picture is settled, their Medicare and Social Security timing is in view, and they can estimate how many years of tax-free growth they’ll actually capture.
The short answer: a conversion tends to pay off when you can move money at a lower bracket than you expect to face during retirement withdrawals, when you don’t need the converted funds for living expenses, or when leaving tax-free assets to heirs is part of the plan. It tends to hurt when a single large conversion stacks a higher federal bracket, an IRMAA surcharge, and heavier Social Security taxation on top of each other in the same year.
What the Tax Bill Looks Like
The entire converted amount counts as ordinary income in the year of the conversion, with one exception. If you made non-deductible contributions to your traditional IRA, that portion, your basis, comes out tax-free because you already paid tax on it. Form 8606 tracks the basis and calculates the taxable and non-taxable portions of any conversion.1Internal Revenue Service. Form 8606 – Nondeductible IRAs If you’ve never made non-deductible contributions, the full conversion is taxable.
For 2026, the 24% federal bracket starts at $105,700 for single filers and $211,400 for joint filers. The 32% bracket begins at $201,775 and $403,550, and the 35% bracket at $256,225 and $512,450.2Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 A $200,000 conversion stacked on top of $80,000 of other income would push a single filer well into the 32% bracket, taxing part of the conversion at a rate that person might never actually hit on ordinary retirement withdrawals. That’s the scenario the math almost never justifies.
State income tax adds another layer. Most states tax conversion income as ordinary income just like the federal government. Nine states have no income tax at all. If you live in one of the others, build that rate into your cost estimate before deciding.
Why You Can’t Just Convert the Basis: The Pro-Rata Rule
You cannot cherry-pick only the already-taxed money in your traditional IRA. The IRS treats all your traditional, SEP, and SIMPLE IRAs as a single combined pool when it calculates the taxable portion of any conversion.
The calculation: divide your total non-deductible contributions across all traditional IRAs by the total balance of all those IRAs as of December 31 of the conversion year. That ratio is the tax-free percentage of your conversion. With $50,000 of basis inside $500,000 of total IRA balances, only 10% of anything you convert comes out tax-free. The other 90% is taxable ordinary income, no matter which specific account the money physically leaves.3Internal Revenue Service. Instructions for Form 8606 Employer plans like 401(k)s, 403(b)s, and 457(b)s aren’t part of the pool.
One workaround exists. If your employer plan accepts incoming rollovers, you can roll your pre-tax traditional IRA money into the 401(k), leaving only the basis in the IRA. A conversion of what’s left is then almost entirely tax-free. This only works if the plan allows it and its investment lineup is one you can live with.
The Medicare Premium Surcharge Two Years Later
Medicare Part B and Part D premiums include an income-related surcharge called IRMAA that hits higher-income beneficiaries. It’s based on your modified adjusted gross income from two years earlier, so a conversion in 2026 shows up in your Medicare premiums in 2028.4Centers for Medicare & Medicaid Services. 2026 Medicare Costs The lag is why the premium spike arrives after you’ve mentally moved on.
For 2026, the IRMAA thresholds and monthly Part B premiums are:
- Single income up to $109,000, joint up to $218,000: $202.90 per month, no surcharge.
- Single $109,001 to $137,000, joint $218,001 to $274,000: $284.10 per month.
- Single $137,001 to $171,000, joint $274,001 to $342,000: $405.80 per month.
- Single $171,001 to $205,000, joint $342,001 to $410,000: $527.50 per month.
- Single $205,001 to $499,999, joint $410,001 to $749,999: $649.20 per month.
- Single $500,000 and up, joint $750,000 and up: $689.90 per month.
The surcharge applies to each spouse individually, so a married couple pays it twice.5Centers for Medicare & Medicaid Services. 2026 Medicare Parts A and B Premiums and Deductibles Part D coverage carries its own separate IRMAA on top.6Social Security Administration. POMS HI 01101.020 – IRMAA Sliding Scale Tables A conversion large enough to jump you two tiers can cost thousands in premiums for a couple, and it doesn’t show up in your conversion cost estimate unless you look for it.
Social Security Gets Taxed More Heavily
Conversion income also raises your provisional income, which controls how much of your Social Security is taxable. If provisional income exceeds $25,000 single or $32,000 joint, up to 50% of benefits become taxable. Above $34,000 single or $44,000 joint, up to 85% can be taxed.7Internal Revenue Service. IRS Reminds Taxpayers Their Social Security Benefits May Be Taxable These thresholds have never been indexed for inflation, so most retirees are already above them. A conversion that shifts you from 50% to 85% taxability adds a hidden tax cost that isn’t visible on the conversion itself.
If You’re Already Taking RMDs
The current RMD starting age is 73 for people born between 1951 and 1959, and 75 for those born in 1960 or later. If you’re past that age, you have to take your full RMD for the year before converting anything else. The RMD itself cannot be converted; it has to leave the account as a regular taxable distribution.8Internal Revenue Service. Retirement Topics – Required Minimum Distributions
Your RMD equals your total traditional IRA balance as of December 31 of the prior year divided by the life expectancy factor from the IRS Uniform Lifetime Table. A 75-year-old with $500,000 divides by 24.6, producing an RMD of about $20,325. Only what remains is eligible to convert.
Missing an RMD triggers a 25% excise tax on the shortfall, dropping to 10% if you correct it within two years.9Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs Satisfy the RMD first, always.
The upside: Roth IRAs have no required minimum distributions during the original owner’s lifetime.8Internal Revenue Service. Retirement Topics – Required Minimum Distributions Every dollar you convert is a dollar the government will never force you to withdraw. If you don’t need it for expenses, it keeps compounding tax-free for the rest of your life.
The Five-Year Rule Over Age 59½
The five-year rule is the most misread piece of Roth conversion mechanics, and the scariest version of it doesn’t apply once you’re past 59½. The 10% early-withdrawal penalty on converted amounts pulled within five years only applies to people under 59½.10Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions You can pull converted principal at any time with no penalty and no additional tax, because the tax was paid on the way in.
The version that still matters to you covers earnings. For earnings to come out completely tax-free, you must be at least 59½ and the Roth must have been open at least five years. The clock starts on January 1 of the tax year you first funded any Roth IRA, whether by contribution or conversion. Open your first Roth with a December 2026 conversion and the clock runs from January 1, 2026 through January 1, 2031. Any existing Roth you funded years ago, even with a small deposit, already has its clock running and covers future conversions to any Roth in your name. Some advisors suggest opening a Roth with a token contribution well before conversion just to get that clock started.
What This Does for Your Heirs
For many people past 60, the estate planning case is the real reason to convert. Because Roths carry no lifetime RMDs, you can leave the account untouched and let it grow tax-free for decades. A traditional IRA forces mandatory taxable withdrawals starting at 73 or 75, drawing the account down whether you need the cash or not.
When a beneficiary inherits a Roth, withdrawals of contributions and converted principal come out tax-free. Most non-spouse beneficiaries have to empty the account within 10 years of the owner’s death, but those distributions are generally not taxable as long as the original owner’s Roth satisfied the five-year rule.11Internal Revenue Service. Retirement Topics – Beneficiary Earnings can still be taxable if the Roth was less than five years old at death. An inherited traditional IRA, by contrast, is fully taxable to the beneficiary as they draw it down, often during their peak earning years at their own marginal rate.
You’re prepaying the tax at your rate so your heirs don’t pay it at theirs. A $500,000 Roth is worth $500,000 to the heir. A $500,000 traditional IRA might be worth $350,000 to $375,000 after taxes.
Convert in Slices, Not All at Once
Nothing requires converting the whole balance in one year, and for people over 60 a single large conversion is usually the worst approach because it stacks the higher federal bracket, the IRMAA surcharge (potentially for two years or more), and heavier Social Security taxation on top of each other.
The measured approach is to convert only enough each year to fill your current bracket without spilling into the next one. A single filer with $80,000 of other income in 2026 could convert about $25,700 and stay in the 22% bracket, or roughly $121,775 and stay in the 24% bracket.2Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 Either way, you’re deciding the tax cost rather than letting a lump sum decide it for you.
The gap between retirement and RMD age is prime conversion territory. If you retire at 62 and delay Social Security until 67 or 70, those low-income years let conversion income fill lower brackets cheaply. Once RMDs start, they eat up bracket space, so the earlier you start planning, the more you can move at favorable rates.
How to Actually Do It
A Roth conversion has to be completed by December 31 to count for that tax year. Unlike Roth contributions, conversions cannot be backdated to the prior year at the April filing deadline. A conversion done on January 3, 2027 counts for 2027.
The safest method is a direct trustee-to-trustee transfer: your traditional IRA custodian sends the funds straight to the Roth custodian and you never touch the money. If both accounts are at the same institution, it’s usually an internal transfer. Ask for the Roth conversion form and specify no federal tax withholding; if the custodian withholds, you’d have to replace that cash from other funds to convert the full amount, and the withheld portion becomes a taxable distribution instead of part of the conversion.
An indirect rollover, where you receive the funds and have 60 days to deposit them into a Roth, is available but riskier. Miss the deadline by a day and the entire amount becomes a taxable distribution with no conversion benefit. The one-per-year rule on indirect IRA rollovers does not apply to conversions, so you can convert as many times in a year as you want.12Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions
Your custodian reports the conversion on Form 1099-R. You report the taxable portion on your Form 1040 and file Form 8606 to break out the taxable and non-taxable pieces based on your basis.1Internal Revenue Service. Form 8606 – Nondeductible IRAs Keep the records; you’ll need them for years to track basis and conversion dates.