Is a Roth Conversion Worth It After Age 60?

Confessions of a Financial Advisor

A Discovery Visit That Raised an Important Question

Jennifer and Darren came in for a discovery visit. 

They were in their 60’s and had been referred to us by a friend—someone who had already experienced what it’s like to be part of the SWAN Capital family. They had also attended one of our gardening events. Jennifer told me she was drawn to how we build relationships with our client families. After that event, she “dragged” her husband to our office for a more serious conversation. 

As I went through their SWAN questionnaire, something jumped out:  
Most of their retirement assets were in traditional IRAs and 401(k)s. 

I paused and asked, “When your financial advisor met with you and your CPA—or at least reviewed your tax return—what was his advice this year regarding Roth conversions?” 

They both laughed . . . and then said in unison: 

“Well, our advisor was actually interested to hear what you had to say—and to ask you if we should convert any of our assets to a Roth.” 

I leaned back in my chair and chuckled. 

“You mean to tell me your financial advisor wants me, another financial advisor, to tell him how much you should convert to a Roth IRA?” 

They smiled and looked at each other again—this time with a smirk. 
The irony of the situation had just hit them. 

I raised my hand. 

“Hey, this isn’t uncommon. A lot of families have a financial planner who doesn’t do any tax strategy at all. That’s actually more common than you’d think.” 

Many brokers and advisors position themselves as the “investment guy” or “investment gal.” They’ll gladly talk about performance, but don’t want to get into tax strategy, legacy planning, income distribution, or long-term care. 

But like Jennifer and Darren experienced, that can be to your disadvantage.  

By not moving forward with Roth conversions, they were potentially missing out on tax savings, greater retirement flexibility, and the chance for tax-free growth for themselves and their heirs. 

Is a Roth Conversion Worth It?

If you’re wondering whether a Roth conversion makes sense in your situation, here’s what I told Jennifer and Darren.

Below are 10 real-life reasons we review Roth conversions with clients—especially those over age 60.

10 Reasons to Consider a Roth Conversion After Age 60

1. You think tax rates might go up

Tax rates are near historic lows. National debt is near historic highs. 
 
It doesn’t take a Nobel economist to wonder if we might be living in a “tax sale” right now—meaning paying taxes for your Roth conversion today could help you avoid paying more later. 

Tip: Only arrange a Roth conversion if you have the money outside the IRA to pay the taxes on the amount you are converting. Otherwise, you may want to take a step back and reconsider. 

2. You’re married—and only one of you may live long in retirement

If you’re filing jointly now but one spouse passes away, the surviving spouse could be forced into single filer tax brackets—which are almost always higher.  

Most widows won’t be spending a lot less after their spouse dies, but they will often be paying a lot more in taxes. Converting to a Roth now could lessen the tax bill on the surviving spouse later. 

3. You can’t grow your way out of the problem

Growing your IRA won’t reduce your taxes—it will increase them. 
 
The more your traditional IRA grows, the more you owe when you withdraw. Roth conversions don’t eliminate your tax bill completely, but they do give you control over when and how much you pay. 

Tip: Roth conversions only make sense if the money has time to grow. If you plan to withdraw it within 5 years, the tax hit may not be worth it. 

4. Your heirs may pay more than you ever would

Inherited IRAs are now subject to a 10-year spend-down rule, meaning heirs must withdraw all the money from the inherited IRA within 10 years of the original account holder’s death. 
 
If your children or grandchildren are in higher tax brackets, they could end up paying more on your IRA than you would have during retirement. By converting to a Roth while you’re alive, you can shift some of their future tax burden now, when you have control over the timing and tax impact. 

5. You want tax diversification

Tax diversification creates flexibility.

By converting some traditional IRA funds to a Roth IRA, you create multiple tax buckets:

• Taxable
• Tax-deferred
• Tax-free

Having these options allows retirees to choose where to withdraw from each year and potentially manage their tax brackets more effectively.

6. The market is down

If your account value has dropped due to a correction or recession, it may be a prime opportunity to convert. Why?  
 
You’re paying taxes on a temporarily reduced value and when the market rebounds, that growth happens inside the Roth, completely tax-free. 

7. You want to avoid future RMDs

Traditional IRAs force Required Minimum Distributions (RMDs), which are mandatory withdrawals. Roth IRAs do not.  

If you believe your income will rise in retirement, or if RMDs at age 73+ are likely to push you into a higher tax bracket, converting part of your traditional IRA to a Roth IRA now—while your tax rate is lower—could help reduce your overall lifetime tax burden.  

A conversion also reduces the size of your traditional IRA, which in turn lowers future RMD amounts and the associated taxable income. 

If you don’t want the IRS telling you how much to withdraw (and when), a Roth can help you regain that control. 

Tip: If you intend to leave part of your IRA to charity, you may want to rethink a Roth conversion. Charities can receive traditional IRA assets tax-free, so converting would only create an unnecessary tax bill for you. 

8. You plan to make a large one-time purchase in retirement

Need to pay off your mortgage? Buy an RV? Help with a grandchild’s wedding? 
 
Pulling a large sum from your traditional IRA in a single year could push you into a higher tax bracket, meaning you’ll owe significantly more in taxes for that year.  

In contrast, if you convert portions of your IRA into a Roth IRA gradually in the years leading up to that big expense, you may be able to avoid a surprise tax bill. The converted amounts are still taxed, but by spreading them over several years, you avoid a large one-year income spike. 

Then once the funds are in the Roth IRA and you’ve met the required holding period, withdrawals are tax-free, giving you more flexibility to cover major expenses. 

9. You want to avoid IRMAA penalties on Medicare premiums

Higher income means higher Medicare premiums. 

Roth conversions done strategically can help you manage your modified adjusted gross income to avoid triggering Income-Related Monthly Adjustment Amount (IRMAA) thresholds. 

10. You want to reduce taxes on your Social Security

Many retires are surprised to learn that Roth income doesn’t count toward the provisional income formula that determines how much of your Social Security is taxable. 
 
That alone can make Roth conversions worth reviewing. 

When a Roth Conversion May Not Make Sense

Roth conversions can be powerful—but they are not right for everyone.

A conversion may not be ideal if:

• You don’t have outside funds to pay the tax bill
• You plan to withdraw the money soon
• The IRA assets are going to charity

This is why Roth conversion decisions should always involve tax planning, not just investment planning.

Final Thoughts From a Financial Advisor

If your financial advisor hasn’t brought up Roth conversions—or asked to review your tax return—then who’s doing your tax planning?

The truth is, Roth conversions aren’t right for everyone. But they’re also not something to ignore or procrastinate about. They deserve thoughtful review from someone who understands how tax strategy and investment strategy work together.

At SWAN Capital, we have a Enrolled Agent in-house and regularly coordinate with our clients’ CPAs and tax preparers to answer an important question each year:

Is a Roth conversion a good idea for you this year?

Because if your advisor is waiting for another advisor to answer that question…

That might already be your answer.

COVERING OUR TAIL FEATHERS
Welcome to Swan Capital, LLC (“SWAN”), your friendly neighborhood Registered Investment Adviser (“RIA”). Now, while we may have a fancy title, remember that our registration doesn’t guarantee we’re flying high above the rest. This communication hasn’t been blessed or verified by the United States Securities and Exchange Commission (SEC) or any state securities authority. At SWAN, we believe in giving you personalized investment advice as unique as a swan’s graceful glide. We work with clients in their own states, making sure to play by all the regulatory rules or find the right exceptions. But here’s the scoop: all investments come with risks—like a wild swim in the pond—so no investment strategy can promise profits or protect you from the occasional splashdown. Just remember, past performance is like a cozy old story; it might be nice to reminisce about, but it doesn’t promise what’s coming next. 

SWAN Capital, LLC is an independent firm and is not affiliated with, endorsed by, or sponsored by the Federal Employee Retirement System (FERS) or any government agency. 

Thanks for gliding along with us at SWAN! We’re here to help you soar to new financial heights while ensuring you can truly Sleep Well At Night!