We are 70 years old, have $99,000 in retirement income, a $1.4 million IRA, and other investments. Is it too late to convert to Roth?

By | September 16, 2023

Steven Jarvis, accountant

Steven Jarvis, accountant

My wife and I are 70 years old. We paid for everything, including the house. Between my $29,000 pension and Social Security, we receive a gross income of $99,000 a year, which is more than enough. Our current savings in our brokerage account are $700,000. Our individual retirement account (IRA) is $1.4 million. Our Roth is worth $400,000. We both expect to live to be 90. At our age, is it too late to have a conversation about Roth?


The short answer is no. There is no age limit on your ability to convert to a Roth.

Additionally, there is no earned income required to convert to a Roth. As long as you have a balance in an IRA, in theory, you can continue converting to a Roth for as long as you want.

The bigger question is this: Does converting to a Roth further your goals for inheriting your wealth?

This should be your starting point before starting a Roth conversion strategy, regardless of your age. But it becomes especially important when considering Roth conversions as you get closer to and begin taking required minimum distributions (RMDs).

Most articles and conversations about converting to a Roth will focus on the years between retirement and taking the RMD. Those years can present a fantastic opportunity to convert IRA dollars to Roth. But they’re not your only opportunity. Answer this question: What do I want to happen to my wealth when I die? The answer is in the details. Here’s how to think through this strategy.

A financial advisor can help you understand how to handle the tax implications of a Roth conversion.

An argument against a Roth conversion

Ask an Advisor: Is It Too Late to Convert to a Roth?

Ask an Advisor: Is It Too Late to Convert to a Roth?

On the one hand, let’s assume that all your wealth will be donated to your favorite charity when you die. If a qualified charity receives your IRA when you die, there will be no taxes due and you should strongly consider not converting your IRA balance to a Roth during your lifetime.

In that case, converting to a Roth would mean choosing to pay taxes that you might otherwise never have to pay.

If you’re ready to be matched with local advisors who can help you reach your financial goals, it begins now.

A case for a Roth conversion

The opposite extreme would be if your goal was to leave all your wealth to your children, grandchildren, or other loved ones – and ensure they never have to worry about paying taxes on those dollars.

In this case, an argument could be made for trying to convert every last dollar of your IRA balance into a Roth before you die. This way, your beneficiaries will receive a huge tax-free pie and the IRS won’t be able to share a single slice. This may not result in the greatest tax savings, but it would be the best way to make sure your beneficiaries don’t worry about taxes.

The middle ground on Roth conversions

Ask an Advisor: We're 70 years old, have $99,000 in retirement income, a $1.4 million IRA, and other investments.  Is it ever too late to convert to a Roth?

Ask an Advisor: We’re 70 years old, have $99,000 in retirement income, a $1.4 million IRA, and other investments. Is it ever too late to convert to a Roth?

Most people will end up somewhere in the middle, where converting to a Roth can make a lot of sense but only up to a point.

Roth conversions make the most sense when you can choose to pay income tax on your IRA balance and move it to a Roth in a relatively low-income tax year. “Relative” is an important word here because it will be unique to each taxpayer’s situation.

The question to ask yourself here is this: Am I worried that, at some point in the future, I might find myself in a higher tax bracket than I am currently?

Keep in mind that even if Congress does nothing about taxes in the next three years, tax rates are already set to increase in 2026.

Roth conversion factors to understand

If you decide that a Roth conversion helps you reach your wealth goals, there are several factors to keep in mind when deciding how much to convert in a particular year. I am:

How much income tax will be due

In general, the more we can spread out our taxable income, the less federal income tax we will pay. This is an oversimplification. But it provides a starting point for thinking about how to put together a Roth conversion strategy.

In the example presented in this question, generally speaking, converting the entire $1.4 million from an IRA to a Roth in a single year would result in paying more taxes than spreading those conversions over the remaining expectation of lives of taxpayers.

Other tax implications

Federal income tax gets all the attention when Roth conversions emerge. But your marginal tax rate (the amount of tax you’ll pay on your next dollar of income) is hardly the only consideration.

In this example, 85% of the taxpayer’s Social Security (the highest possible amount) is already included in taxable income. But for taxpayers with lower taxable income, Roth conversions have the potential to change your Social Security tax rate.

Increases in taxable income may also change a taxpayer’s eligibility for tax credits and deductions. For taxpayers who have not started claiming Medicare, the premium tax credit can have a particularly significant impact.

Medicare Premiums

For taxpayers approaching age 65 or already enrolled in Medicare, it’s critical to remember that the amount you pay for Medicare is affected by your taxable income (particularly through your modified adjusted gross income) and can increase the real cost of a Roth conversion .

This can be especially dangerous because each income range for Medicare premiums is treated like a cliff. Then, once you’re just one dollar over the threshold, your rewards make the full leap to the next level. In other words, in for a penny, in for a pound.

What would happen if tax rules changed in the future?

I am often asked if I am concerned that Congress may change the Roth rules in the future and having large Roth balances could prove to be a liability.

My answer is always the same: The tax code is written in pencil and Congress can change anything it wants. We must do the best we can with the information we have and the laws currently in place.

What to do next

My crystal ball is still broken, so anything I say about future rule changes would just be a guess. What I know is that holding an IRA is like having an adjustable rate mortgage with the IRS where they have the ability to change the interest rate to whatever they want, whenever they want. It is always worth considering eliminating the IRS by converting IRA dollars to Roth dollars.

Steven Jarvis, CPA, is a financial planning columnist for SmartAsset and answers reader questions on personal finance and tax topics. Do you have a question you would like answered? Email AskAnAdvisor@smartasset.com and your question may be answered in a future article.

Please note that Steven does not participate in the SmartAdvisor Match platform and has received compensation for this article. The author’s taxpayer resources can be found at retirementtaxpodcast.com. The author’s financial advisor resources are available at retirementtaxservices.com.

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