Roth conversions move money from traditional (pre-tax) accounts to Roth (post-tax) accounts, paying income tax now in exchange for tax-free growth and withdrawals later.
The optimal conversion window is typically between retirement and age 73, when required minimum distributions (RMDs) begin. During this period, income is often lower, meaning conversions can be done in lower tax brackets.
The key metric is "bracket space" — how much additional income can you add before jumping to the next tax bracket? If a retired couple has $50,000 in income and the 12% bracket ends at $94,300, they have $44,300 of bracket space for conversions at 12%.
Compare this to their future RMD tax rate. If their traditional IRA will force $100,000/year in RMDs taxed at 22%, converting now at 12% saves 10% on every dollar converted — potentially hundreds of thousands over a retirement.
The analysis should also consider the impact on Social Security taxation (up to 85% of benefits can be taxable), Medicare IRMAA surcharges, and state income taxes. A comprehensive financial planning tool can model all these interactions.