For many federal retirees, the years between their last paycheck and their first required minimum distribution are the lowest-tax years they’ll ever have. Your salary has stopped. Social Security may not have started. And the IRS isn’t forcing money out of your TSP yet.
That gap is a window for Roth conversions. Used well, it can lower your lifetime tax bill and shrink the RMDs waiting for you later. Here’s how the window works, how to size a conversion, and when to hold off.
Why it’s a window
Retirement usually unfolds in stages, and your taxable income changes at each one:
- You retire. Your salary stops, and only your pension (plus any FERS supplement) keeps coming.
- The gap years. Your taxable income can drop lower than it’s been in decades.
- Social Security starts. Up to 85% of your benefit becomes taxable.
- RMDs begin. The IRS requires you to start withdrawing from your traditional TSP.
RMDs start at age 73 if you were born 1951–1959, or age 75 if you were born in 1960 or later. Once Social Security and RMDs stack on top of your pension, many retirees end up in a higher bracket than they had in their gap years. The window closes when RMDs start.
What a conversion does, and how it works in the TSP
A Roth conversion moves money from your traditional (pre-tax) balance into Roth. You pay income tax on the converted amount now. In exchange, that money and its growth can come out tax-free later, as long as you meet the Roth rules. Roth TSP balances have had no RMDs since 2024, so converted dollars also stop counting toward future RMDs.
You don’t need an IRA to do this anymore. In-plan Roth conversions went live in the TSP on January 28, 2026. A few mechanics to know:
- The minimum is $500 per conversion.
- The TSP doesn’t withhold tax. The full amount moves to Roth, and the tax bill lands on your return.
- Pay the tax from outside money if you can. Cash from savings, extra withholding on your pension, or an estimated payment keeps the full converted amount growing in Roth.
- Conversions can’t be undone. Once one is processed, it’s final.
Fill a bracket, don’t jump one
The goal isn’t to convert everything. It’s to convert enough to use up the low brackets you’re in now, without spilling into a higher one. Here are the 2026 federal brackets for married couples filing jointly:
| Bracket | Taxable income up to |
|---|---|
| 10% | $24,800 |
| 12% | $100,800 |
| 22% | $211,400 |
Single filers have roughly half these amounts.
Illustration: A married couple, both under 65, has $60,000 of pension income and hasn’t started Social Security. After the $32,200 standard deduction, their taxable income is $27,800. That leaves $73,000 of room before they leave the 12% bracket. Converting up to that amount keeps every converted dollar taxed at 12%.
Illustration only. Your numbers will depend on your income, deductions and filing status.
Watch IRMAA
Medicare premiums are based on your income from two years earlier. That means a conversion at 63 or later can raise your Part B and Part D premiums once you’re on Medicare.
For 2026, the first IRMAA surcharge tier starts at $218,000 of modified adjusted gross income for joint filers and $109,000 for single filers. These are cliffs: going even one dollar over can raise your premiums for a full year. If you’re near a tier, size your conversion to stay under it.
Who it can fit, and when to pause
Roth conversions aren’t right for everyone. They tend to fit feds who have:
- A big traditional TSP balance. Large balances mean large RMDs later, stacked on top of your pension and Social Security.
- A spouse who may file single someday. A surviving spouse faces narrower brackets on similar income. Converting while you file jointly can ease that later tax bill.
- Heirs they want to leave tax-free money to. Roth money can pass to them without income tax.
It may be better to hold off if:
- You don’t have outside cash for the tax. Paying the bill out of your TSP shrinks the benefit.
- You’re close to an IRMAA tier. One dollar over can cost you a year of higher premiums.
- You expect a lower bracket later. If your tax rate will drop in retirement, converting now may not pay off.
The bottom line
The years between retirement and RMDs can be the cheapest time you’ll ever have to move money into Roth. The window closes when RMDs start, so use it on purpose. Map out your income for each gap year, fill the bracket you’re in, watch IRMAA, and pay the tax from outside money.
Within 12 months of retirement, or already retired, with $1 million or more invested? Book a free 15-minute Fit Call with our team at Haws Federal Advisors. We’ll help you see whether conversions fit your plan, and how much makes sense each year.
This article is for educational purposes only. It isn’t tax, investment or legal advice. Talk with a qualified tax professional about your situation before converting.