Roth Conversions Before Social Security: Using the Pre-Retirement Window

There is a period in many retirements that looks modest on paper and turns out to be one of the most tax valuable windows available. It is the gap between leaving work and starting Social Security, often three to ten years where income drops, tax brackets open up, and the opportunity to move money into Roth at low rates is as good as it will ever be.

Most retirees don't plan for this window deliberately. They either start Social Security immediately, which closes it, or they delay Social Security but don't use the gap to do anything structural. The result is that they reach their seventies with a large Traditional IRA balance, mandatory RMDs forcing taxable income they didn't want, and Medicare premiums climbing because of it.

The retirees who use this window well often save tens of thousands of dollars over the course of their retirement, not through investment performance, but through tax structure.

Social Security income interacts with your other income in a way that makes it more expensive than it first appears.

Up to 85% of your Social Security benefit can become taxable, depending on your combined income, your AGI plus tax exempt interest plus half of your Social Security benefit. The threshold at which 85% of benefits become taxable is $44,000 for married couples filing jointly. Because that threshold isn't adjusted for inflation, it captures more households every year.

This creates a compounding effect: Social Security adds income, that income partially triggers Social Security taxation, and together they push you into a higher bracket than either source would alone. The result is an effective marginal rate in the Social Security taxation band that is often 50% higher than the stated bracket.

Before Social Security starts, none of this applies. Your taxable income consists only of what you actually withdraw from accounts and what you earn. That is typically much lower, and that is the gap.

The mechanics are straightforward. In a year with limited income, you calculate how much room you have before reaching the next meaningful threshold. Then you convert roughly up to that amount from a Traditional IRA to a Roth IRA.

You pay tax at the current year's rate. The converted balance grows tax free in the Roth account. When you draw from it in retirement, whether it's year two or year twenty five, there is no tax, no RMD, and no interaction with Social Security or Medicare calculations.

For a married couple filing jointly in 2026, the top of the 22% bracket is at approximately $211,400 of taxable income. The 12% bracket covers roughly $24,800 to $100,800. If their taxable income before conversions is $50,000, they have room to convert roughly $50,000 more while staying in the 12% bracket. Over five years of doing this, they might move $200,000 or more into Roth at 12%, rather than leaving it to face potentially higher rates once RMDs and Social Security combine in their seventies.

Medicare Part B and Part D premiums are based on your modified adjusted gross income from two years prior. The first surcharge tier begins at $109,000 for single filers and $218,000 for married filing jointly, adding roughly $1,000 per year per person above the standard premium. But IRMAA runs five tiers. A conversion sized to fill the 22% or 24% bracket rather than stopping lower can push MAGI into higher tiers, where the worst case surcharge reaches roughly $5,800 per year per person, and Part D premiums add further on top of that.

Roth conversions count as income in the year they occur. A conversion that pushes you over an IRMAA threshold costs the surcharge amount in addition to the conversion taxes. If the conversion is planned for the window before Social Security and you're also on Medicare, the threshold planning becomes two dimensional: stay below both the bracket you're targeting and the IRMAA tier above your current position.

The two year lookback means a 2026 conversion shows up in 2028 Medicare premiums, whose exact thresholds and surcharge amounts haven't been set yet. Use current published 2026 IRMAA thresholds as a reference point, but build in buffer rather than converting right up to the line. This is why avoiding IRMAA requires forward modeling, not just awareness of today's rates.

For retirees who retire before Medicare eligibility at 65 and purchase insurance on the ACA marketplace, there is a complication that operates in reverse: you need enough income to qualify for subsidies, but not so much that you lose them.

ACA subsidies in 2026 phase out sharply at 400% of the federal poverty level. The cliff that was temporarily lifted during 2021 to 2025 has returned. Above that threshold, subsidies disappear entirely. Roth conversions add to MAGI and can push a household over this line, turning a $20,000 conversion into a substantially more expensive decision once the lost subsidies are factored in. In states that expanded Medicaid, a separate lower income floor also applies. Falling too far below the subsidy range can shift coverage to Medicaid rather than a marketplace plan.

The planning implication is that conversions before Medicare and before Social Security may need to stay below an ACA income threshold rather than a tax bracket threshold. The two numbers don't always coincide.

The Roth conversion ladder is usually built over several years, not all at once. Each year, you estimate your income from all sources, identify the binding threshold for that year, whether it's a tax bracket, an IRMAA tier, or an ACA cliff, and convert up to that limit.

The ladder pays off over time in multiple ways. It reduces your future RMD burden, because a smaller Traditional IRA requires smaller mandatory distributions. It reduces your Social Security taxation exposure, because the Roth income you take later doesn't count toward combined income. And it reduces IRMAA exposure in the years when your Medicare premiums are set, because Roth distributions don't appear in MAGI.

None of this requires converting everything. It requires converting the right amount in the right years, and identifying those years before they pass.