How Much Should I Convert to a Roth IRA Each Year?

The short answer

There is no fixed dollar amount and no fixed percentage. The right yearly Roth conversion is the largest one whose marginal cost — this year and downstream — is still lower than the rate you'd otherwise pay on that money later. For most retirees that means converting up to a bracket ceiling in the low-income years between retirement and RMDs, but stopping short whenever the next dollar would trip a more expensive cliff.

The trouble is that the "cost" of a converted dollar is rarely just its tax bracket. Four other thresholds ride on the same income number, and any of them can turn a "cheap" 12% conversion into a 25%+ decision.

Step 1: start with the bracket

The baseline rule is real and worth doing. In a low-income year you have "room" below a bracket ceiling that you can fill with conversion income. For a couple filing jointly in 2025:

Retirement income (pension + taxable SS):   $40,000
Standard deduction (MFJ 2025):               $30,000
Top of 12% bracket (taxable income):         $96,950

Gross-income ceiling = 96,950 + 30,000    =  $126,950
Conversion room at 12% = 126,950 − 40,000 =  ~$87,000

So a first-pass answer is "about $87,000." The 22% and 24% versions push that ceiling higher for people who expect very large RMDs. This is exactly what RothHelper's bracket-fill strategies compute — and, importantly, its solver accounts for the fact that adding conversion income can itself make more of your Social Security taxable, so it lands on the ceiling instead of overshooting it.

Step 2: subtract the four cliffs

Now the bracket number gets trimmed. Each of these can sit below your bracket ceiling, and whichever comes first is your real limit for the year.

1. IRMAA (Medicare surcharge tiers)

Once you're within two years of Medicare, IRMAA becomes the binding constraint for many retirees. The tiers are hard cliffs — one dollar over Tier 1 (~$212k MAGI MFJ in 2025) adds about $2,100/year for a couple, and it's charged on income from two years prior. Notice that the 22%-bracket ceiling above ($236,700 gross) sails right past that threshold. If you're 63+ and filling the 22% bracket, you may be silently buying an IRMAA bill that lands at 65. Full breakdown in the IRMAA cliff post.

2. The Social Security tax torpedo

If you're already collecting Social Security, each conversion dollar can also make 50–85 cents of your benefit taxable. That adds roughly 8–10 points to your true marginal rate inside the phase-in zone — the reason a nominal "12% bracket fill" so often behaves like a 22% conversion. The torpedo math is here.

3. ACA premium subsidy cliff (pre-Medicare)

Retirees on an ACA marketplace plan before 65 get premium tax credits that shrink as income rises. Under non-enhanced rules, crossing 400% of the federal poverty level wipes out the subsidy entirely — a cliff that can cost $10,000+/year. A conversion that looks cheap on the tax line can quietly cost multiples of that in lost subsidy.

4. The 0% long-term capital gains threshold

If you have appreciated shares in a taxable brokerage, there's a competing use for that same low-income headroom: realizing capital gains at the 0% federal rate (taxable income under ~$96,700 MFJ in 2025). Conversion income stacks underneath your gains and can push them out of the 0% zone. Some years a conversion wins; some years a tax-free gain harvest wins. They compete for the same room.

A worked example

Take that same couple — $40k of fixed income, both age 63, on an ACA plan until 65, with a $1.1M Traditional IRA they'd like to shrink before RMDs. Here's how the "right" number moves as constraints switch on:

Bracket-only answer (fill 12%):        ~$87,000
Respect ACA 400% FPL cliff:            drops to ~$25,000 (this year)
At 65, ACA gone, respect IRMAA Tier 0: rises to ~$146,000
At 73, RMDs start:                     conversions blocked; RMD fills income

The same household has a "right" conversion of $25k in one year and $146k a few years later — driven entirely by which cliff is active. This is why a single rule of thumb can't answer the question, and why year-by-year modeling matters: the low-income window is only a handful of years wide, and each year has a different ceiling.

How aggressive should you be?

Two forces push in opposite directions:

• Convert more if you have a large Traditional balance, a long time horizon, expect higher rates later (or a TCJA sunset), want to protect a surviving spouse from the single-filer tax cliff, or plan to leave IRA money to heirs facing the 10-year distribution rule.
• Convert less if you'll be in a lower bracket in retirement anyway, need the money within a few years, would cross a costly IRMAA or ACA cliff, or live in a high-tax state you plan to leave.

The honest goal isn't to convert as much as possible — it's to convert at the lowest available rate, filling the cheapest brackets first and stopping before the expensive ones.

How RothHelper answers this for your situation

Rather than pick one rule, the RothHelper calculator runs your actual numbers year by year under several strategies at once — no conversions, fill-to-12%, fill-to-22%, fill-to-24%, a custom fixed amount, and an Optimize strategy that searches for the conversion path minimizing your projected lifetime tax, including IRMAA surcharges, NIIT, ACA premium changes, and capital-gains tax — not just this year's federal bracket.

The Projections table shows the recommended conversion, marginal rate, IRMAA tier, and ACA net premium for every year, so you can see exactly where each cliff starts to bind. If you'd rather hold a specific number below a threshold, the Custom-amount strategy lets you set your own target.