Roth Conversion Timing: Should Educators Rush or Take It Slow?

A research-based guide to one of retirement planning's biggest decisions

As an educator-turned-financial-planner, I frequently field questions from teachers, administrators, and public service professionals about Roth conversions. The question that comes up most often isn't whether to convert—it's how fast to convert. Should you rip off the band-aid with one large conversion, or take the gradual approach over several years?

The answer, according to recent academic research, is refreshingly honest: it depends. But understanding what it depends on can help you make a more informed decision for your unique situation.

Why This Decision Matters More Now

With the recent passage of the One Big Beautiful Bill Act (OBBA) in 2025, we're seeing significant changes to the tax landscape. Enhanced standard deductions, new senior deductions for those 65 and older, and temporary increases to SALT caps are creating new opportunities for strategic Roth conversions. For educators approaching retirement, particularly those with substantial 403(b) or 457(b) balances, the timing of conversions has never been more critical.

What the Research Actually Shows

Academic studies frame Roth conversions as a sophisticated tax arbitrage strategy: you're paying a known tax rate today to avoid uncertain future taxes on account growth. The core variables that determine success include your current versus future tax rates, how long you have until you need the money, and crucially—how you plan to pay the conversion tax.

Here's where it gets interesting for educators: the research consistently shows that conversions work best when you can pay the tax bill from taxable savings rather than from the retirement account itself. This is often challenging for public service professionals who may have most of their wealth tied up in retirement accounts.

The Case for Going Big Early

When researchers model "clean" scenarios—stable tax rates, ample taxable savings to cover taxes, and long investment horizons—larger, earlier conversions often come out ahead. The math is straightforward: more dollars growing tax-free for longer periods typically beats smaller amounts converted gradually.

For educators, this might make sense if you:

• Have significant taxable savings built up
• Expect to be in higher tax brackets in retirement (perhaps due to pension income)
• Are in your early 60s with decades of potential growth ahead
• Want to minimize Required Minimum Distributions (RMDs) that could affect Medicare premiums

The Case for the Gradual Approach

However, real-world retirement planning is messier than academic models. The research acknowledges that spreading conversions over multiple years often makes practical sense because it allows you to:

Stay within favorable tax brackets each year. As educators, you're likely familiar with careful budgeting. The same principle applies here—managing your tax bracket annually can be more efficient than creating one year of exceptionally high income. Why waste tax brackets?

Adapt to changing circumstances. Tax laws change, investment returns vary, and personal situations evolve. A multi-year conversion strategy gives you flexibility to adjust course.

Coordinate with other retirement income. For educators with pensions, Social Security, and retirement account withdrawals all coming online at different times, gradual conversions allow better coordination of these income streams.

Managing the Risks

Recent research highlights an important consideration: Roth conversions change who bears the investment and tax policy risks. When you convert, you're betting that either investment returns will be strong enough to justify paying tax upfront, or that future tax rates will be higher than today's.

For the educators I work with, I often recommend a "hedge your bets" approach. Rather than going all-in on either strategy, consider a middle path that delivers solid results across various scenarios without requiring you to be perfectly right about future tax rates or market returns.

Practical Planning for Educators

Given the unique financial profile of most educators—steady but modest incomes, good retirement benefits, but often limited taxable savings—here's how I typically approach conversion planning:

Start with bracket management. Look at your current tax situation and identify how much you could convert annually while staying within your target tax bracket. This often provides a natural guardrail for conversion amounts.

Consider your pension timeline. If you have a pension that doesn't start until full retirement, you may have a "low-income" window in your early 60s that's perfect for conversions.

Factor in the new tax provisions. The enhanced standard deductions and senior deductions from the OBBA create additional room for tax-efficient conversions, particularly for those 65 and older.

Plan for required minimum distributions or RMDs. Teachers with large 403(b) balances often underestimate how RMDs will affect their late-retirement tax situation. Strategic conversions in your 60s can significantly reduce this future tax burden.

The Bottom Line

Academic research doesn't declare a clear winner between lump-sum and gradual conversion strategies, as the "right" answer depends on your specific circumstances. What the research does tell us is that doing nothing is often the worst choice if you expect to be in similar or higher tax brackets in retirement.

For most educators I work with, a measured approach of annual conversions that fill up favorable tax brackets while preserving flexibility for changing circumstances tends to work well. It's not as mathematically elegant as a single large conversion, but it's more forgiving of the uncertainties that make real-world retirement planning challenging.

The key is to model multiple scenarios, understand the trade-offs, and choose an approach that helps you sleep well at night while building meaningful tax-free wealth for your future. Reach out to me on the contact page below if you want to learn if Roth conversions benefit your retirement planning.

Disclaimer: This blog post is for educational and informational purposes only and should not be construed as personalized financial, tax, or investment advice. Roth conversion strategies involve complex tax considerations that vary significantly based on individual circumstances, including current income, expected future tax rates, state tax implications, and overall financial goals. The information presented here is based on general principles and current tax law as of November 2025, which may change. Before making any Roth conversion decisions, readers should consult with qualified financial, tax, and legal professionals who can provide advice tailored to their specific situation. Past performance and hypothetical examples do not guarantee future results. All investment strategies involve risk of loss.