What's the Best Age to Convert My IRA to ROTH?

This question of what's the best age to convert your Roth IRA is a hard one because it's really dependent on your specific situation.

But there is an age where I see, it seems to be the most common age that people start to convert their Roth IRA, and it seems like they're paying a little bit less in tax than other parts of their life.

This is also the time where they have the most flexibility and control over their income plan, and then they tailor their income plan during this period.

It's the period between age 60 and 70, right after they stopped working and right before they start social security.

The reason why that is, it's because this time when your taxable income might be the lowest that it's ever been. So when they convert their IRA to Roth, that money's taxable, but it's not taxed at the high tax bracket that they were just at when they were working.

So the next question is, where do we get the money to live if we're converting our IRAs and we're not taking money out of the IRA to live on, and if we're not working anymore?

The people that we've seen do this right, they plan ahead and they start pumping up their non-retirement accounts before their retirement age. So that's the money that they'll use to supplement their income when they start converting their Roth IRAs.

Usually, you can take non-retirement monies out of your accounts and you just have to think about the capital gains related to that, so it's still some tax planning to do.

Really, I'd say that's an important note. If you're in your 50s now, start planning ahead and thinking about this strategy, even though it's a ways off, and set yourself up for success now.

Then there's one very other important question that comes up and it's, what's the right dollar amount to convert?

Well, there's actually a Roth conversion sweet spot that we talk about, and I'm planning on making a video about that soon. It really depends on the new tax brackets that came out with some of the Trump tax changes a few years ago.

So if you can get in between these different sweet spots, then it should be advantageous to you. So look for that video coming up soon or subscribe so that you don't miss it. 

-Dave Zoller, CFP®