Quick take

Partial Roth conversions let you convert a targeted portion of pre-tax retirement savings to a Roth IRA so you pay income tax now in exchange for tax-free withdrawals later. This strategy is most useful when you can convert within lower tax brackets, when you want to manage future required minimum distributions (RMDs), or when doing small, repeated conversions reduces the risk of pushing you into a higher marginal rate in any single year.

Why partial conversions matter

Full Roth conversions can create large, one-time tax bills and may push you into higher tax brackets, increase Medicare Part B and D premiums through IRMAA, or raise taxation of Social Security benefits. Partial conversions give you control — you decide how much income to recognize each year. Over several years this can convert substantial balances with a smaller yearly tax bite and smoother effect on benefit thresholds.

Key scenarios where partial conversions make sense

  • Low- or zero-income years: Years with reduced wages, a sabbatical, or a gap between jobs can be ideal windows to convert amounts while you’re in a low marginal tax bracket. (See IRS guidance on Roth IRAs for rules and tax treatment: https://www.irs.gov/retirement-plans/roth-iras.)

  • Before RMDs begin: Roth IRAs do not have lifetime RMDs for original owners. Converting in the years before RMDs start (currently age 73–75 depending on birth year and current law) can reduce future taxable RMD income. This is especially useful if you expect higher taxable income later.

  • Taking advantage of bracket “fill”: If you can convert up to the top of a lower tax bracket without crossing into the next one, you get tax-free growth afterward in the Roth. For example, converting just enough to stay inside the 12% or 22% bracket can be more efficient than a lump-sum conversion.

  • Managing Medicare IRMAA and Social Security taxation: Smaller conversions are less likely to trigger IRMAA surcharges or higher taxation of Social Security benefits that are based on your modified adjusted gross income (MAGI).

  • Estate and legacy planning: Roth assets pass to heirs income-tax-free (distributions depend on the five-year and qualified distribution rules). If estate tax is not the primary concern, converting can shift future tax on growth away from heirs.

How to plan and execute partial conversions (step-by-step)

  1. Project your taxable income for the year. Include wages, capital gains, Social Security, and other income to find the remaining headroom in lower brackets.

  2. Decide the conversion target. Convert only enough to fill the bracket or to meet a strategic goal (e.g., to avoid IRMAA thresholds). Keep an eye on state income tax consequences as well.

  3. Consider timing with other events. Coordinate conversions with years of lower income, before large taxable events (stock vesting, pension start), or while deductions offset income.

  4. Use tax-withholding or estimated payments. Since conversions increase tax liability, either increase withholding on the converted amount or pay quarterly estimated taxes to avoid underpayment penalties.

  5. Track five-year rules. Each Roth conversion begins its own five-year clock for avoiding the 10% early withdrawal penalty on converted amounts if you are under 59½. Document conversion dates and amounts carefully.

  6. Reassess annually. Tax laws and personal circumstances change. Reevaluate each tax year rather than setting-and-forgetting.

Tax mechanics and important IRS rules to know

  • Taxation: Converted amounts are included in taxable income for the year of conversion. There’s no income limit on conversions (the income-based prohibition was eliminated in 2010), but the tax hit can still be substantial; plan accordingly (IRS: Roth IRAs).

  • No recharacterizations of conversions: The Tax Cuts and Jobs Act (TCJA) eliminated the ability to recharacterize a Roth conversion back to a traditional IRA for conversions completed after 2017. That means conversions are effectively final, so get the math right before executing. (See IRS guidance and Publication 590-A.)

  • Five-year rule and early withdrawals: For each conversion, a separate five-year period applies for avoiding the 10% early withdrawal penalty on those converted amounts if you withdraw them before age 59½. Earnings in the Roth are subject to a separate five-year rule for tax-free qualified distributions after age 59½. Keep records of each conversion year.

  • Required minimum distributions (RMDs): Roth IRAs are not subject to lifetime RMDs for original owners. If you convert to a Roth 401(k) rather than a Roth IRA, remember Roth 401(k)s still have RMDs unless rolled into a Roth IRA.

  • State taxes: Some states tax conversions differently. Check your state tax rules; the federal tax outcome is not the only factor.

Common strategies and practical examples

1) The bracket-fill program
Convert the amount that brings taxable income up to but not beyond the top of a favorable tax bracket. Example: If your projected taxable income (after deductions) leaves $25,000 of room in the 12% bracket, convert up to $25,000 that year and then repeat in subsequent years.

2) The low-income window
During a low-income year — for example, a year between jobs or one with deductible losses — convert larger portions because the marginal tax rate will be low. I’ve executed this for clients who had a one-year drop in W2 income and saved thousands in lifetime taxes.

3) The Medicare/IRMAA avoidance trim
If you are near the IRMAA threshold, convert only the amount that keeps you under the IRMAA cutoff to avoid higher Medicare premiums. This requires careful MAGI forecasting.

Real-world case profiles (anonymized)

  • Mid-career couple: Ages 52 and 54, combined income $150,000. They converted $30,000 each year for five years, staying inside the 24% bracket and avoiding a jump to 32% in any single tax year. Over time, they built Roth balances that will provide tax-free withdrawals and reduce RMD pressure.

  • Pre-retiree with stock-option year: A client expected a heavy income year from option exercises the following year. We used two low-income years before the event to convert smaller slices, reducing taxable assets that would otherwise be compounded by future gains and taxed at a high rate.

Pitfalls and mistakes to avoid

  • Converting too much in one year and triggering a higher tax bracket or Medicare surcharges.

  • Forgetting the five-year clock for conversions; withdrawals of converted amounts within five years may be subject to the 10% penalty if you’re under 59½.

  • Using tax-deferred dollars to pay conversion tax. Generally better to pay conversion tax from outside retirement accounts so more of the retirement balance stays invested and grows tax-free in the Roth.

  • Assuming conversions are reversible. Since 2018 conversions can’t be recharacterized, don’t rely on undoing a conversion later.

How partial conversions fit in a broader retirement plan

Partial conversions are a tactical tool. They work best when they’re part of a multi-year tax plan that considers Social Security timing, RMDs, Medicaid/IRMAA exposure, estate goals, and expected future tax brackets. They’re not automatically the right move for everyone: clients planning to need converted funds within a short horizon or who can’t afford the conversion tax may prefer to leave assets tax-deferred.

Helpful tools and next steps

Further reading on FinHelp

Authoritative sources

Professional disclaimer

This article is educational and does not constitute individualized tax or investment advice. Tax rules change, and the best choice depends on your full financial picture. Work with a qualified CPA or financial planner before making conversion decisions.

About the author

I’ve worked with retirement clients for over 15 years and regularly use partial Roth conversions as one tool in multi-year tax plans. These examples reflect practical strategies I’ve used in client work, adapted for general education and planning guidance.