Roth Conversions: Before or After Social Security?

Roth Conversions: Before or After Social Security?

If you're considering Roth conversions in your 60s, timing can make a significant difference. One of the most important decisions is whether to convert before you claim Social Security or after.

That decision can impact how much of your Social Security is taxed, whether you trigger higher Medicare premiums, and how much control you have over your tax bracket.

Why Timing Matters for Roth Conversions

Before you claim Social Security, you typically have more control over your taxable income. After you claim it, that control becomes more limited.

Once Social Security begins, up to 85% of your benefit can become taxable. Additional income from Roth conversions can increase how much of your Social Security is taxed.

The Low-Income Window Opportunity

Before Social Security begins, many retirees enter what can be considered a low-income window.

During this time, you may be retired, not yet taking required minimum distributions, and not yet receiving Social Security income.

This window can provide a unique opportunity to convert money at lower tax rates.

Example: Roth Conversion Timing Strategy

Imagine you retire at age 62 and delay Social Security until age 67. That creates a five-year window where you may have lower taxable income and more flexibility.

During those years, you may be able to strategically convert portions of your IRA while staying within a favorable tax bracket.

Before vs After Social Security: Key Differences

Three Guardrails for Roth Conversion Timing

When evaluating Roth conversions, there are three key factors to consider:

• Identify lower-income years before required minimum distributions begin
• Evaluate how much of your Social Security may become taxable
• Consider Medicare IRMAA thresholds and how conversions may impact premiums