We're in our 60s. My wife and I have $345,000 in annual pensions and $1 million in 403(b)s. Is it too late for Roth conversions?
This article looks at whether retirees in their 60s can still benefit from Roth conversions, especially when they have large pensions and retirement accounts. The guidance emphasizes smaller, staged conversions rather than moving everything at once.
Source: Morningstar ·
Grace's Take
Large pensions can actually *create* tax opportunities in retirement, not just lock you into a fixed tax bracket. For someone in their 60s with a pension covering most living expenses, that steady income becomes a double-edged sword—it funds lifestyle but also pushes ordinary withdrawals into higher tax brackets. Smaller, staged Roth conversions exploit the gap between pension income and tax bracket thresholds, letting you move pre-tax retirement savings into tax-free accounts while rates remain manageable. Worth asking a tax advisor how many years of modest conversions might fit before Social Security and required distributions kick in, since timing matters more than size.
- •Roth conversions can still make sense later in life.
- •Smaller conversions may be smarter than aggressive ones.
- •Large pensions can change the tax picture for retirees.
People nearing retirement may still be able to lower future taxes by converting part of their traditional savings to Roth accounts in a careful, tax-aware way.