Roth Conversions in Your 60s: Is $1M in 403(b)s Too Late?
A couple earning $345K with $1M in 403(b)s wonders if Roth conversions still make sense. Here's the tradeable answer.
You're in your 60s, pulling in $345,000 a year, and sitting on $1 million in 403(b) retirement accounts. The question on the table: is it too late to convert those pre-tax dollars into Roth money? Short answer — no. But the math matters more than ever at this income level.
The core argument for converting now is simple. Your heirs get tax-free distributions from Roth accounts. That's not a small deal. Under current rules, inherited traditional IRAs force non-spouse beneficiaries to drain the account within 10 years, potentially getting hammered by taxes during their peak earning years. A Roth flips that script entirely.
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The catch is your income. At $345,000, you're already deep in a high tax bracket. Every dollar you convert on top of that gets taxed at your marginal rate — and that stings. The strategic move here isn't to convert everything at once. It's to run the numbers annually and convert only up to the ceiling of your current bracket, or better yet, wait for a lower-income year — say, after you stop working but before Social Security and RMDs kick in. That gap is your golden window.
Required Minimum Distributions are another pressure point. Once you hit 73, the IRS forces withdrawals from your 403(b), whether you need the cash or not. Those RMDs inflate your taxable income every year you delay converting. Acting before RMDs start gives you more control over your tax trajectory — and your kids' inheritance.
Bottom line: late-stage Roth conversions aren't a desperation play. Used tactically, they're a legitimate wealth-transfer tool. The best time to start was yesterday. The second-best time is now. Continue reading at MarketWatch.com
