As we head into the last couple months of the year, many of us start thinking about holiday plans, family gatherings, and wrapping up projects before the calendar flips. But for retirees and people nearing retirement, November and December are also prime time for another kind of year-end activity — Roth conversions.

Every year around this time, I have conversations with clients who ask, “Is now a good time to convert some of my IRA to a Roth?” And the answer, quite often, is yes. But it’s not always a slam dunk — the timing, tax bracket, and overall plan all matter.

In this post, we’ll review  why the end of the year is often the best window for Roth conversions, how to approach them strategically, and what pitfalls to avoid before December 31st.

 

A Quick Refresher: What Is a Roth Conversion?

A Roth conversion happens when you move money from a pre-tax retirement account (like a Traditional IRA) into a Roth IRA. The catch is that you’ll pay income tax on the amount you convert this year — because that money was previously untaxed.

Once the money is inside your Roth IRA, though, it grows tax-free from that point forward. Withdrawals are tax-free in retirement, and — unlike a Traditional IRA — your Roth IRA doesn’t have required minimum distributions (RMDs) later in life.

So, in essence, a Roth conversion is a trade: you pay taxes now, in exchange for tax-free growth and flexibility later.

 

Why Bother Converting at All?

For many people in their 50s and 60s, Roth conversions can be a powerful tool. Here’s why they’re often worth considering:

1. Tax diversification. Having a mix of pre-tax, Roth, and after-tax savings gives you flexibility to control your income (and taxes) in retirement.
2. Managing future RMDs. Converting now reduces the size of your Traditional IRA, which in turn reduces future required distributions — and future tax bills.
3. Estate planning benefits. Roth IRAs can be left to heirs income-tax-free, giving your beneficiaries more flexibility than if they inherited a pre-tax IRA.
4. Locking in low tax rates. We’re currently in a historically low tax rate environment. Many retirees can benefit from “filling up” their lower tax brackets now while they still have the opportunity.

The question isn’t usually whether Roth conversions are beneficial — it’s when and how much to convert. And that’s where timing comes into play.

 

Why Late in the Year Works So Well

There are several reasons why November and December tend to be the sweet spot for executing Roth conversions. Let’s walk through them.

1. You Know Where You Stand Tax-Wise

The biggest variable in deciding whether to convert — and how much — is your tax bracket. A Roth conversion adds taxable income for the year. If you convert too much, you can push yourself into a higher tax bracket, trigger Medicare premium surcharges, or phase out certain deductions and credits.

By the end of the year, you have a much clearer picture of your total income:

• You’ve likely collected nearly all your wages, pension payments, or Social Security for the year.
• You can see realized capital gains, dividends, and interest income.
• You might know if you’re itemizing deductions or taking the standard deduction.

In short: you can estimate your final taxable income with more accuracy than you could in, say, April or July.

That means you can “fill up” your desired tax bracket strategically. For example, if you’re in the 22% bracket and have room to convert another $30,000 before bumping into the 24% bracket, you can target that exact amount — and stop there.

2. You Can Integrate It with Other Year-End Moves

November and December are already when most people (and their advisors) look at year-end tax planning. You might be harvesting capital losses, making charitable contributions, or finalizing your required minimum distributions. A Roth conversion can easily slot into that process.

Here’s how those pieces often work together:

• Tax-loss harvesting: If you’ve realized losses in your taxable investment account, those losses can offset gains or up to $3,000 of ordinary income — helping to soften the tax impact of a Roth conversion.
• Qualified charitable distributions (QCDs): For those 70½ or older, a QCD can satisfy your RMD and keep that income off your tax return — freeing up “room” to convert more IRA dollars at a lower effective rate.
• Charitable giving from a donor-advised fund (DAF): If you make a large charitable gift this year, that deduction could offset some or all of the income generated by a Roth conversion.

When you’re already reviewing these pieces in the fall, it’s natural to fold the Roth decision into the same conversation.

3. You Avoid Surprises with Withholding and Estimated Taxes

Another reason the end of the year is ideal: you can adjust withholding or make an estimated tax payment to cover the conversion taxes.

If you do a conversion early in the year and underestimate your total tax, you might face underpayment penalties or have to scramble to catch up. But if you convert in November or December, you can calculate the tax liability almost precisely — and pay it right away.

Even better, withholding from a retirement distribution is considered paid evenly throughout the year (unlike estimated payments). So if you’re a little short on taxes for the year, a late-December conversion with sufficient tax withheld can help you catch up and avoid penalties.

That’s a handy timing advantage.

4. Market Conditions Can Work in Your Favor

If markets have pulled back during the year — as they sometimes do in the fall — that can make late-year conversions even more attractive.

Let’s say your IRA was worth $800,000 in January but drops to $700,000 in November. If you convert $50,000 while values are temporarily lower, you’re effectively paying tax on a smaller base. When the market recovers inside your Roth IRA, all that future growth will be tax-free.

No one can predict short-term market moves, of course. But if the timing happens to line up with a modest pullback, you can think of it as getting a little “Roth on sale.”

5. You Have Flexibility to Evaluate Your Whole Financial Picture

In many cases, a Roth conversion isn’t just about taxes — it’s part of a bigger retirement income strategy.

At the end of the year, you can step back and look at:

• How much you’ve withdrawn from IRAs so far.
• What your expected income looks like for next year.
• Whether you’re approaching key age milestones (like 63, when Medicare’s income-based premiums are determined).

All of this helps you gauge whether a conversion fits into your broader plan — not just your tax plan.

 

A Quick Example

Let’s make this concrete with an example.

Imagine Sarah, age 60, recently retired. She hasn’t started Social Security yet and is living off cash savings and a small taxable brokerage account. Her income this year will be roughly $40,000, putting her near the top of the 12% federal tax bracket.

Sarah also has a $900,000 Traditional IRA. Once she turns 73, she’ll need to start taking RMDs, which will likely push her into a much higher tax bracket.

So she decides to do a $40,000 Roth conversion this year, bringing her total taxable income to about $80,000 — right up to the top of the 12% bracket. She’ll pay around $4,800 in federal tax now, but that $40,000 will grow tax-free for the rest of her life.

By executing the conversion in late November, Sarah can be confident in her total income and fine-tune the amount. She can even use a bit of withholding from the conversion to cover her tax bill without underpayment penalties.

Over time, repeating this “bracket-filling” strategy for a few years can dramatically reduce the taxes she’ll owe later in retirement — and give her more control over withdrawals in her 70s and 80s.

 

Things to Watch Out For

Roth conversions are powerful, but they’re not something to rush into blindly. A few key cautions:

1. Be Aware of Medicare Premium Surcharges

If you’re 63 or older, your conversion this year could affect your Medicare Part B and D premiums two years from now. These surcharges (called IRMAA) kick in if your modified adjusted gross income crosses certain thresholds. The brackets start fairly low — around $206,000 for married couples in 2025 — so it’s important to model this out before converting.

2. Watch Your State Income Taxes

Not all states treat Roth conversions the same way. Some fully tax the conversion; others offer exemptions for retirement income. If you’re close to relocating (say, to a no-income-tax state), it might make sense to wait.

3. Don’t Pay Taxes Out of the IRA

Ideally, you should pay the conversion taxes from a taxable account, not by withholding from the converted amount. That way, the full amount gets into the Roth and continues growing tax-free. Paying taxes from the IRA itself effectively reduces your contribution and undermines some of the benefit.

4. No Do-Overs

Prior to 2018, you could “recharacterize” (undo) a Roth conversion if you changed your mind. That rule is gone. Once you convert, it’s permanent. So run the numbers carefully and avoid converting more than you can handle tax-wise.

Wrapping It Up

When you boil it down, Roth conversions are about controlling when you pay tax — on your terms, not the IRS’s.

For many people in the pre-RMD years (roughly ages 55–72), converting some IRA money each year can be one of the most effective long-term tax moves available. And the end of the year is often the perfect time to do it:

• You have clear visibility into your income and deductions.
• You can coordinate it with charitable giving, capital gains, or loss harvesting.
• You can settle up taxes efficiently with late-year withholding.
• You can potentially take advantage of lower asset values.

Like most good financial planning, Roth conversions work best when they’re intentional, measured, and tailored to your unique situation. There’s no one-size-fits-all formula — but there’s a lot of opportunity for those who plan ahead.

If you’re considering a Roth conversion before year-end, take a little time in November or early December to run the numbers. It’s a conversation worth having — before the ball drops and the tax year closes for good.