Roth Conversion Planning
A Roth conversion moves money from a traditional account to a Roth account, which may create a current tax cost but can improve future tax flexibility. We review whether it may fit your plan and coordinate with your tax professional.
How Roth Conversions Fit Into Your Broader Plan
A Roth conversion rarely stands on its own as a decision. Moving money from a traditional IRA or 401(k) into a Roth account creates taxable income in the year of the conversion, so how much you convert and when depends heavily on your other income for that year, including wages, pension payments, and any Social Security benefits you have already claimed. Because converting too much in a single year can push you into a higher tax bracket, many people spread conversions across several years rather than doing one large conversion, coordinating the amount with their tax professional each year.
Timing also interacts with Social Security and Medicare. If you have not yet claimed Social Security, the years before you file can sometimes offer a window for conversions before other income sources begin, though this depends entirely on your individual income picture. Roth conversions can also affect Medicare, since income from a prior year helps determine Medicare Part B and Part D premiums, and a larger conversion could temporarily raise those premiums in a future year. We look at Social Security claiming age alongside conversion timing rather than evaluating either decision in isolation.
Required minimum distributions (RMDs) are another piece of the puzzle. Money converted to a Roth account is generally not subject to RMDs during your lifetime, so conversions completed well before RMDs begin may reduce the size of future required withdrawals and the taxable income they create. A review can help you see how conversion timing, RMD planning, and your broader retirement income plan fit together instead of looking at each piece on its own.
What a Retirement Clarity Review Considers
When we sit down to talk through Roth conversions, we typically look at questions such as: What tax bracket are you in this year, and how might a conversion change that? Do you expect your tax bracket to be higher, lower, or similar in retirement compared to today? How might a conversion affect your Medicare premiums or the taxation of your Social Security benefits? And how does converting now compare with waiting and managing required minimum distributions later? We also consider how converting fits alongside your retirement income plan and any legacy goals you may have for the assets you leave behind.
These are educational conversations designed to help you understand your options and the tradeoffs involved, not a sales pitch for a specific product. We do not guarantee any particular outcome, and every recommendation depends on your individual circumstances.
What we help with
- Conversion timing and amount questions
- Tax impact planning and coordination
- RMD and retirement income tradeoffs
- Future flexibility considerations
Considerations for Coloradans Approaching Retirement
For pre-retirees and retirees in the Denver metro area, Roth conversion questions often come up alongside broader questions about how Colorado treats retirement income compared to federal tax rules. Because state and federal tax treatment can change from year to year, we encourage coordinating any specific conversion-amount questions with your tax professional rather than relying on assumptions or figures that may be out of date.
Whether you are several years from retiring or already drawing income and want a second look at your tax strategy, working with a local advisor familiar with the questions Colorado retirees tend to ask can make it easier to talk through these decisions in person or by phone from our Englewood office.
Common questions
How much should I convert?
That depends on your tax picture, account balances, and the rest of your retirement income plan.
Will this raise my taxes now?
A conversion can create current taxes, so the timing and size matter.
Does a conversion make sense before RMDs?
Sometimes it may, especially when you want more tax flexibility later.
How do I avoid a bad tax surprise?
We help you think through the tax tradeoffs and encourage you to consult your tax professional before filing.
How do Roth conversions affect Medicare premiums?
Because Medicare Part B and Part D premiums are based on income from an earlier year, a conversion can temporarily increase what you pay for Medicare in a future year. We can walk through how a conversion might affect your specific situation before you decide on an amount.
Ready to talk?
Request a Roth conversion planning review.
Related reading: When Should Coloradans Take Social Security? Key Timing Considerations
This article is for educational purposes only and is not individualized investment, tax, or legal advice. Please consult your tax professional regarding your specific situation.