Retirees with large traditional IRA balances face a predictable tax squeeze once they turn 73 and mandatory withdrawals begin. Those forced distributions, calculated by dividing the prior year-end balance by a factor from the IRS Uniform Lifetime Table, land on the tax return as ordinary income and can push Social Security benefits into higher taxation brackets. A growing number of tax planners argue that converting portions of a traditional IRA to a Roth during the lower-income years between retirement and age 73 can shrink later required minimum distributions and keep combined income below the thresholds that trigger federal tax on up to 85 percent of Social Security benefits.
How Pre-73 Roth Conversions Reduce Future RMD Pressure
Under SECURE 2.0, the RMD starting age is 73 for many taxpayers, with the first distribution deadline falling on April 1 of the year after reaching that age. The math behind the strategy is straightforward: every dollar moved from a traditional IRA to a Roth before that birthday permanently leaves the RMD calculation. Because the annual RMD equals the prior December 31 account balance divided by the applicable life-expectancy divisor, a smaller traditional IRA balance produces a smaller mandatory payout each year.
The conversion itself is taxable in the year it occurs and must be reported on Form 8606, which tracks nondeductible IRA basis and flows to Form 1040. That tax hit is the trade-off. But for someone in the gap years between leaving full-time work and turning 73, taxable income often drops before RMDs, pensions, and full Social Security claiming stack up. Paying tax on a conversion at a 12 or 22 percent bracket can cost less than absorbing the same income later at a higher effective rate once RMDs are added on top of other retirement cash flows.
The Social Security angle sharpens the case. The Social Security Administration defines combined income as adjusted gross income plus tax-exempt interest plus half of Social Security benefits. Once that figure exceeds $25,000 for single filers or $32,000 for joint filers, up to 50 percent of benefits become taxable. Above $34,000 and $44,000, respectively, up to 85 percent of benefits face federal tax. RMDs flow directly into AGI, so a large traditional IRA balance can push retirees well past those lines every single year after 73.
Importantly, the agency notes that while no more than 85 percent of benefits can be taxed, many beneficiaries pay tax on a smaller portion depending on their income mix. The official explanation of how benefits become taxable underscores why shifting future withdrawals from tax-deferred to Roth accounts can be so powerful: Roth qualified distributions do not increase adjusted gross income and therefore do not raise combined income for this calculation.
IRS Final Regulations Clarify the Post-SECURE RMD Framework
The regulatory backdrop for this planning window became clearer when Treasury issued final regulations in Internal Revenue Bulletin 2024-33, published as Treasury Decision 10001. Those rules, effective September 17, 2024, updated RMD administration to reflect changes enacted by both the original SECURE Act and SECURE 2.0, resolving several open questions about distribution timing and beneficiary treatment that had lingered since the laws passed. With those rules now settled, taxpayers and advisors can model conversion strategies against a stable regulatory baseline rather than guessing at future RMD interpretations.
Among other items, the regulations clarify how the 10-year payout rule applies to many non-spouse beneficiaries and how annual “stretch” distributions interact with that outside limit. While these beneficiary provisions do not change the mechanics of an owner’s own lifetime RMDs, they do affect long-term planning for families hoping to leave tax-deferred accounts to heirs. A smaller traditional IRA balance at death-achieved in part through earlier Roth conversions-can reduce the taxable income heirs must recognize in the years after inheriting the account, particularly if they are in their peak earning years.
The final rules also reinforce that Roth IRAs owned by the original contributor remain exempt from lifetime RMDs. That distinction is central to the conversion strategy: shifting dollars from a traditional IRA into a Roth not only shrinks future required withdrawals but also moves assets into a vehicle that can continue compounding without mandatory distributions during the owner’s life. For retirees who do not need every dollar of their RMD to cover living expenses, this creates more flexibility in choosing when and how to tap tax-free funds.
Coordinating Conversions With Social Security and Tax Brackets
Executing pre-73 conversions effectively requires careful coordination with Social Security claiming decisions and annual tax brackets. Starting Social Security early raises combined income and can crowd out room for conversions within a lower bracket. Delaying benefits, by contrast, may create a wider window in which to recognize conversion income while staying below key thresholds for both ordinary tax brackets and Social Security benefit taxation.
Many planners model a series of partial conversions over several years rather than a single large transaction. Spreading conversions can help keep each year’s income from jumping into a higher bracket or triggering additional Medicare premium surcharges. It also allows retirees to adjust as circumstances change-such as unexpected portfolio gains, part-time work, or shifts in spending needs-without locking into an overly aggressive tax bill in any one year.
Ultimately, the appeal of pre-73 Roth conversions lies in trading some tax certainty now for potentially lower lifetime taxes later. By understanding how RMD formulas, Social Security combined income thresholds, and the clarified post-SECURE regulations interact, retirees can better decide how much of their traditional IRA to convert, when to do it, and how to balance the upfront cost against the long-term benefit of reduced RMD pressure and more control over taxable income in their seventies and beyond.
