Roth Conversions in Your 50s & 60s: When Do They Make Sense?

As you approach retirement, tax strategy becomes just as important as investment strategy. For many people in their 50s and 60s, a Roth conversion can be a smart way to reduce taxes later in life and increase flexibility in retirement. But timing, income, and Medicare thresholds all matter — especially if you live in or around Sumter, Columbia, or Florence, South Carolina.

What Is a Roth Conversion?

A Roth conversion means moving money from a traditional IRA or 401(k) into a Roth IRA. You’ll pay taxes on the converted amount now, but your future withdrawals — including earnings — will be tax-free if you follow the rules.

For those nearing retirement, this strategy can help create tax diversification, giving you more control over which accounts you draw from when income needs or tax rates change.

Why Timing Matters

Your 50s and 60s are often peak earning years — but also the last chance to shift assets before Required Minimum Distributions (RMDs) begin. Converting at the right time, such as after retirement but before claiming Social Security or taking RMDs, may help you stay in a lower tax bracket.

Don’t Forget About IRMAA

If you’re on Medicare or will be soon, pay close attention to IRMAA — the Income-Related Monthly Adjustment Amount. Higher income from a large conversion can increase your Medicare premiums two years later. That’s why many Sumter retirees choose partial or multi-year conversions instead of doing it all at once.

Benefits of Multi-Year Planning

Breaking conversions into smaller portions across several years can:

• Keep you within your target tax bracket
• Help manage Medicare premium thresholds
• Allow flexibility to adjust as tax laws or income levels change

Working with a financial advisor familiar with South Carolina’s tax environment can make these calculations much more effective.

 

When a Roth Conversion Makes Sense

A conversion may be worth considering if:

• You expect your tax rate to be higher in retirement
• You want to reduce future RMDs
• You plan to leave tax-free assets to heirs
• You have cash available to pay conversion taxes

Local Expertise Matters

State-specific factors — like South Carolina’s tax exemption for retirement income — can affect how a Roth conversion fits into your broader plan. An advisor who understands the Sumter area economy, from retirees connected to Shaw AFB to professionals transitioning from nearby Columbia or Florence, can help design a strategy that fits your goals.

 

Let’s Build Your Retirement Tax Strategy

Every Roth conversion is unique. The right plan can help you keep more of what you’ve worked for while minimizing surprises at tax time.

 

Ready to explore your options?
Contact us today to schedule a retirement review with an experienced financial advisor in Sumter, SC. Let’s create a tax-smart plan that supports your financial independence and peace of mind.