Retirement may create one of the most valuable tax-planning periods of your financial life.

After your paycheck ends—but before Social Security benefits and required minimum distributions add income to your tax return—you may have an opportunity to convert part of a traditional IRA or retirement plan to a Roth IRA at a more favorable tax cost.

But that window does not open automatically on your retirement date. And the right strategy is not simply to convert enough to “fill a tax bracket.”

For pharmaceutical professionals and executives, the real opportunity may begin only after final bonuses, restricted stock units, severance, deferred compensation, and other employment-related income have ended.

What is the Roth conversion window?

A Roth conversion moves money from a pretax retirement account into a Roth account. The taxable portion of the conversion is generally included in your income for the year. In exchange, future qualified Roth withdrawals can be tax-free, and a Roth IRA does not require distributions during the original owner’s lifetime.

The years between retirement and required minimum distributions may offer lower taxable income than your working years or later retirement. Under current law, RMDs generally begin at age 73, although people born in 1960 or later generally begin at 75. Social Security benefits, pensions, portfolio income, and other cash-flow needs may add taxable income before then. The IRS explains the current RMD rules and deadlines.

That creates a limited planning question: Should you intentionally recognize some income now to create greater tax flexibility later?

Why retirement does not always mean lower income

Suppose a pharmaceutical executive retires at 61. Salary stops, but the final year may still include:

  • A final bonus or severance payment
  • RSUs that vest or settle after employment ends
  • Nonqualified deferred compensation
  • Accrued paid time off
  • Company-stock sales and capital gains
  • Interest, dividends, and mutual-fund distributions

Converting in that same year could stack additional ordinary income on top of those amounts. The following year may provide more room—but only after the remaining compensation schedule and other income sources are mapped.

The retirement date is therefore not the starting signal for a conversion. It is one date on a multi-year income timeline.

How much should you convert?

“Fill the bracket” is common Roth-conversion advice. It is also incomplete.

A tax bracket tells you the federal rate applied to the next dollar of taxable income. It does not show the full cost of recognizing that income. Before selecting a conversion amount, consider how it could affect federal and state income taxes, Medicare premiums, the taxation of Social Security benefits, investment gains and losses, deductions and credits, future RMDs, the surviving spouse’s future filing status, and cash available to pay the tax.

For 2026, the federal tax brackets provide useful boundaries, but they should be treated as inputs—not targets. The IRS publishes the applicable 2026 tax thresholds. The best conversion amount may stop below a threshold, cross one intentionally, or be zero for the year.

Medicare can shorten the apparent window

Medicare adds another timeline. Higher-income Medicare beneficiaries can pay income-related monthly adjustment amounts, commonly known as IRMAA, in addition to their standard Part B and Part D premiums. Medicare generally determines these amounts using tax information from two years earlier.

That means a Roth conversion completed in 2026 may affect Medicare premiums in 2028. CMS publishes the current Medicare premiums and IRMAA tiers.

IRMAA should not automatically prevent a conversion. Paying a higher premium for one year could be an acceptable trade-off if the conversion supports a stronger long-term strategy. But crossing a threshold accidentally—particularly by a small amount—is different from crossing it intentionally after comparing the costs.

The conversion and the tax payment are separate decisions

A conversion creates taxable income, but it does not automatically create the right tax payment.

The projected liability should be compared with year-to-date withholding and estimated payments before the transaction is completed. Otherwise, someone may complete a sound conversion and still face an unexpected balance due or an underpayment penalty. IRS Publication 505 covers withholding and estimated-tax requirements.

The source of the tax payment also matters. Withholding taxes from the converted assets means less money reaches the Roth. For someone under age 59½, amounts withheld rather than converted may also create additional tax complications unless an exception applies.

Execution is part of the strategy—not an administrative detail.

Five mistakes that can narrow the opportunity

  1. Converting before identifying all remaining employment income.
  2. Treating the top of a tax bracket as the only limit.
  3. Ignoring Medicare’s two-year income lookback.
  4. Failing to plan how the conversion tax will be paid.
  5. Waiting until the final days of December to calculate and execute the transaction.

The IRS notes that Roth conversions completed after 2017 generally cannot be recharacterized. If the amount turns out to be larger than intended, taxpayers generally cannot simply reverse the conversion. That makes careful projections and operational follow-through especially important.

A conversion strategy should be recalculated every year

A Roth conversion is rarely a one-time yes-or-no decision. A multi-year strategy can be adjusted as markets move, income changes, Social Security begins, Medicare becomes relevant, tax laws change, and RMD projections evolve.

At LBT Wealth Management, we evaluate four questions:

  • Project: When will each source of retirement income begin?
  • Compare: How do different conversion amounts affect current and future trade-offs?
  • Coordinate: How does the decision interact with taxes, investments, Medicare, Social Security, and cash flow?
  • Revisit: What has changed since the strategy was last evaluated?

The question is not simply whether to convert. It is how much, when, how the tax will be paid, and what the decision changes across the rest of retirement.

Frequently Asked Questions

When is the best time to do a Roth conversion after retirement?

A potentially attractive period may occur after employment income declines and before Social Security and RMDs add income. The best year depends on the complete tax return, future income, Medicare exposure, cash available for taxes, and projected long-term trade-offs.

Should I convert my IRA before RMDs begin?

Converting before RMDs may reduce the balance used to calculate future required distributions, but that does not make a conversion automatically beneficial. The current tax cost should be compared with future taxes, Medicare costs, cash-flow needs, and estate objectives.

Can I complete a Roth conversion after RMDs start?

Yes. Eligible amounts may still be converted after RMDs begin. However, the year’s RMD must generally be distributed first because an RMD cannot be rolled over or converted.

Can a Roth conversion increase Medicare premiums?

Yes. A taxable Roth conversion increases modified adjusted gross income and may affect future Medicare Part B and Part D income-related adjustments, generally using a two-year lookback.

Can I undo a Roth conversion?

Roth conversions completed after 2017 generally cannot be recharacterized. This is why the amount, timing, and tax-payment plan should be evaluated before execution.

Should I convert everything at once or over several years?

Either approach may be appropriate depending on the circumstances. Spreading conversions across several years can allow the strategy to be recalculated as income, markets, tax law, Medicare exposure, and personal priorities change.