By Matthew J. Renaud Sr., ChFC®, President and Founder, Renaud & Company Registered Investment Advisors, a fiduciary RIA, who has served clients since 1998. Tax preparation is available through Renaud Tax & Accounting LLC (Jeannie Renaud, CPA), a separate firm in the same office. Information as of October 2026.
Quick answer: A Roth conversion moves money from a pre-tax IRA or 401(k) into a Roth IRA, and the converted amount is taxed as ordinary income in the year you convert. It can reduce future required minimum distributions and create tax-free withdrawals, but it also raises your income for tax brackets, Social Security taxation, and Medicare IRMAA two years later. For retirees in O’Fallon and St. Charles County, the years between retirement and RMDs are often the window to review.
What a conversion does
You pay income tax now on the amount you convert. In return, that money can grow inside a Roth IRA, original owners are not required to take RMDs from a Roth IRA, and qualified withdrawals are generally free of federal income tax. Missouri income tax generally applies to the conversion as well.
Why the 60s get attention
Many people see lower taxable income after they stop working and before they claim Social Security or start RMDs. That gap may leave room to convert at a tax rate you are comfortable with. Large pre-tax balances, a surviving spouse who may file as a single taxpayer, and heirs who would inherit a large IRA are other reasons people review conversions.
The trade-offs to model first
- Tax brackets. The converted amount stacks on top of your other income.
- Social Security taxation. More income can make more of your benefit taxable at the federal level.
- IRMAA. Medicare looks at your income from two years earlier, so a conversion at 63 can show up in premiums at 65.
- Paying the tax. It is often easier to pay from non-retirement money, so the conversion is not shrunk by withholding.
- No undo. Conversions cannot be recharacterized under current law.
- Year-end deadline. A conversion must be completed by December 31 to count for that year.
- Survivor effect. After a spouse dies, the survivor usually files as a single taxpayer, so brackets can be tighter later.
A practical process
- Project the year’s income before converting.
- Find the room in your current tax bracket.
- Check the nearest IRMAA threshold for your filing status.
- Convert a partial amount, not necessarily everything at once.
- Pay estimated taxes and revisit every year.
Renaud & Company Registered Investment Advisors can model conversion amounts alongside withdrawals and Medicare premiums. Tax preparation is available through Renaud Tax & Accounting LLC, led by Jeannie Renaud, CPA, a separate firm with its own engagement and fees.
Frequently asked questions
Is there an income limit for Roth conversions?
No. Anyone with a pre-tax IRA or eligible plan can convert, regardless of income. The tax on the conversion is what you plan around.
Do I owe a penalty when I convert?
There is no penalty on the conversion itself, but the converted amount is taxed as ordinary income. Separate five-year rules can apply to withdrawals of converted amounts if you are under 59½.
Can I undo a Roth conversion?
Not under current law. Recharacterizations of Roth conversions are no longer allowed, so projections matter before you convert.
Does a conversion affect my Medicare premiums?
It can. Conversion income counts toward the income Medicare uses two years later to set IRMAA surcharges.
Questions about your own situation? Meet with Renaud & Company Registered Investment Advisors virtually from anywhere, or in person at 2112 Bryan Valley Commercial Drive, O'Fallon, MO 63366. Call (636) 240-5055 or email info@renaudco.com.
Educational purposes only. This article is general information, not individualized investment, tax, or legal advice. Rules and figures are as of October 2026 and can change; confirm them before acting. Renaud & Company, LLC is an SEC-registered investment adviser; registration does not imply a certain level of skill or training. Neither Renaud & Company, LLC nor its advisors provide tax or legal advice. Renaud Tax & Accounting LLC is a separate firm with separate engagements and fees. Some of our advisors may earn commissions on certain insurance products; we explain how we are paid before you decide. Our Form ADV Part 2A and Form CRS are available at adviserinfo.sec.gov or on request. All investing involves risk, including loss of principal.