Did I Blow My Window for a Roth Conversion? I’m 75 and Already Taking RMDs

This week’s Wealth Wise column asks experts how people in their 70s and older can still approach Roth conversions, while keeping costs under control and preserving an inheritance.

Dear Wealth Wise: I’m 75 and have a large traditional IRA balance. I’m already taking RMDs. I want to leave a tax-efficient inheritance, but a Roth conversion would only push up my tax bill and IRMAAs. Did I miss my chance? — Late to the Roth Party

Dear Late to the Roth Party: In theory, retiring with a sizable traditional IRA is a nice problem to have. In practice, it can complicate your finances.

A large traditional IRA can produce large required minimum distributions (RMDs), which can mean higher taxes. It can also trigger income-related monthly adjustment amounts, or IRMAAs, potentially increasing Medicare premiums by hundreds of dollars a month.

From just $107.88 $24.99 for Kiplinger Personal Finance

Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues

Sign up for Kiplinger’s Free Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

A large traditional IRA can also create a tax problem for heirs. When a non-spouse inherits an IRA, they generally must empty the account within 10 years. That can be painful if the beneficiaries are in their highest-earning years and face steep taxes on those withdrawals.

For all of those reasons, Roth conversions can still be worth considering even after RMDs begin. Our reader wants to know whether that opportunity is gone. Here’s what the experts say.

Roth conversions are still on the table

Once RMDs have started, a Roth conversion can feel intimidating, especially if higher Medicare costs are a concern. But Al Kingan, JD, an estate and business planning executive at MassMutual, says, “I would not say that this person missed a Roth conversion opportunity.”

Kingan suggests filling up the available tax bracket, particularly if the top applicable rate is 22% or 24%, and then determining how much can be converted each year. RMDs must be taken first from a traditional IRA and cannot themselves be converted to a Roth. After the RMD is withdrawn, any additional amount may be converted.

For instance, the reader may be able to convert $50,000 a year to a Roth IRA without moving into a higher bracket. If that also stays manageable from an IRMAA perspective, it may still be worthwhile even if only part of the traditional IRA gets converted during the reader’s lifetime.

Using excess RMDs for investing can help heirs

“Putting the surplus into a taxable investment account can improve the overall inheritance picture for heirs,” Kingan says. “Any appreciation in that account gets a step-up in basis at death. Those assets could be sold right away after death to support surviving beneficiaries without tax consequences.”

He adds that if a taxable account continues to grow after it is inherited, only the increase that occurs after death is taxed. And since there is no 10-year rule attached to this approach, heirs have more flexibility.

Charitable giving can ease the tax burden

Even without Roth conversions, large RMDs can create substantial tax bills. But if the goal is to complete at least part of a conversion, Kingan says the reader may want to look at qualified charitable distributions, or QCDs.

QCDs let IRA owners move money directly from an IRA to a qualified charity, which satisfies RMDs and reduces adjusted gross income, or AGI. That can keep taxable income lower and leave room in the current bracket for a partial Roth conversion without pushing taxes higher.

“The QCD limit in 2026 is $111,000,” Kingan says, leaving plenty of room to use the break while doing some good.

Life insurance may also deserve a look

Because the reader wants to avoid leaving heirs with a large tax bill, Charles Czajka, founder of Macro Money Concepts, says life insurance is worth considering.

“I have hundreds of clients who are able to enjoy their retirement and spend what they want to, knowing that upon death, a tax-free death benefit will go to beneficiaries,” he says. “This is also a good way to help your heirs pay the taxes on the qualified money you leave them.”

Czajka suggests using the part of the RMD that is not needed for living expenses to buy life insurance. Then, if heirs still receive a sizable traditional IRA during their highest-earning years, they could use the death benefit to help cover the taxes owed.

Do you have a question for our Wealth Wise experts? We want to hear about your retirement-related financial dilemmas. You will remain anonymous. Fill out this Google Form or submit your question to [email protected]. Not all questions will be published. We may edit your questions for clarity.

Article continues below. ⬇️

The right inheritance strategy matters

There is a reason many advisers say Roth conversions should be planned over many years. Once RMDs begin, it is often difficult to convert a large balance in a tax-efficient way.

Kingan says the reader should accept that a full Roth conversion may not be realistic. But he adds that inheritance distributions can still be coordinated with beneficiaries’ tax brackets.

“For example,” Kingan says, “someone might leave more traditional IRA assets to lower-tax bracket beneficiaries, and Roth assets or other non-qualified investments to higher tax bracket beneficiaries.”

In a hypothetical case, if the reader managed to convert $1 million to a Roth IRA and still had $3 million in a traditional IRA, the Roth money could be split among children while the $3 million goes to grandchildren, who may be earlier in their careers and earning less.

A note from Wealth Wise

This reader has run into a fairly common challenge. Years of disciplined saving can create a difficult estate-planning situation later on. That is why it often helps to work with a financial professional during the wealth-building years. If the reader had begun Roth conversions years earlier, more choices might be available now.

That does not mean the reader is in a bad situation. The larger lesson is that ongoing planning can improve estate-planning results. With the amount of wealth expected to change hands in the years ahead, it is a reminder worth keeping in mind.

Not all questions submitted will be published, and some may be condensed and/or combined with other similar questions and answers, as required editorially. The answers provided by our writers and experts in this advice column are for general informational purposes only. While we take reasonable precautions to ensure we provide accurate answers to your questions, this information does not and is not intended to constitute independent financial, legal, or tax advice. You should not act, or refrain from acting, based on any information provided in this feature. You should consult with a financial adviser regarding any questions you may have in relation to the matters discussed in this article.