Roth Conversions for Texas Teachers: Why Your TRS Pension Changes Everything (2026)
If you teach in Texas, the standard advice about Roth conversions was probably written for someone else. Most articles assume you have a clean "income gap" between retirement and when your Social Security and required minimum distributions (RMDs) kick in — low-income years you can use to convert your IRA or 403(b) or 457(b) to Roth at a favorable tax rate.
But you have a TRS pension, and it starts the day you retire. That income doesn't pause while you wait for a tax window to open. Your pension compresses your available tax brackets from day one, limits how much you can convert without jumping into a higher rate, and nearly guarantees IRMAA Medicare surcharges once RMDs arrive if you don't plan carefully.
In this post, I'll explain the specific Roth conversion challenge Texas educators face, walk through the three windows that still make sense for TRS members, and share an often-missed 2025–2028 tax break in the One Big Beautiful Bill Act (OBBBA) that could meaningfully reduce your conversion tax bill — but only if you act before it expires.
Why Roth Conversions Work Differently When You Have a Pension
Roth conversion advice is built around one central idea: convert during low-income years so you pay tax at a lower rate now, rather than a higher rate later when RMDs force taxable distributions.
The problem for TRS members is that there may not be a low-income window at all.
Here's what the income stack looks like for a typical TRS retiree who retired at 62 after 30 years of service, with a $48,000 annual pension and a $250,000 traditional 403(b) balance (2026 figures, married filing jointly, both spouses age 65+):
Income Source | Annual Amount |
|---|---|
TRS pension (starts immediately at retirement) | $48,000 |
Social Security (delayed to age 67) | $0 — not yet |
RMDs (begin at age 73) | $0 — not yet |
Standard deduction: $32,200 base + $3,300 age add-on (MFJ, both 65+) | − $35,500 |
Taxable income before any conversion | ~$12,500 |
Room remaining in 12% bracket | ~$34,250 |
Room in 22% bracket before hitting 24% | ~$165,000 |
At first glance this looks workable — about $34,250 of room in the 12% bracket. But once Social Security begins and eventually RMDs stack on top of pension income, that window closes fast. A $250,000 403(b) growing at 6% for 11 years becomes roughly $475,000, producing an RMD of about $17,900 at age 73. Add $48,000 in pension and $24,000 in Social Security, and you're looking at $90,000 in taxable income before you've chosen to withdraw a single dollar — with up to 85% of Social Security also taxable.
The bracket compression trap
Doing nothing with your 403(b) today is itself a tax decision. A large pre-tax balance grows every year — and the IRS will eventually force you to take it, at whatever rate applies then, on top of all your other income.
The Three Windows Where Roth Conversions Still Make Sense for TRS Members
Despite the pension income floor, there are specific situations where conversions make clear financial sense for TRS retirees. Here are the three I focus on most when working with Texas educators.
Window 1: Early Retirement Before Social Security Begins
If you retire in your late 50s or early 60s and delay Social Security to 67 or 70 — a smart strategy for many TRS members following the WEP/GPO repeal — you have a narrow but real window where your only regular income is your pension.
In 2026, a married couple filing jointly can shelter a meaningful amount from federal tax, thanks to the standard deduction plus the new OBBBA senior deduction (more on that below). If your pension is $40,000–$50,000, you may have room to convert $20,000–$40,000 per year and stay entirely in the 12% bracket — or even partially tax-free.
The key discipline: don't convert so much that you spill into the 22% bracket or, worse, trigger IRMAA surcharges two years before Medicare. Run the numbers each year before converting, because your situation changes annually.
Window 2: Years When Bracket Space Opens Unexpectedly
Life creates income dips — a year with significant medical deductions, a major charitable gift, or a spouse who paused working. These are conversion opportunity years.
Because the TCJA rates are now permanent under the OBBBA, you can model several years with confidence. The 22% bracket ceiling for married filing jointly in 2026 is $214,000. If your pension plus other income is $60,000, you have roughly $154,000 of room before hitting 24%. That's not unlimited, but it's workable — especially if you're trying to reduce a large traditional 403(b) balance before RMDs begin.
See also: TSP Roth In-Plan Conversions for Federal Employees — the bracket management principles apply equally to TRS members with 403(b) accounts.
Window 3: After RMDs Begin — Partial Conversions Still Help
Many TRS members assume the conversion window closes at 73 when RMDs begin. It doesn't — but the strategy shifts. Once RMDs start, your goal is no longer filling brackets to zero. It's shrinking the future balance to reduce the size of forced distributions five and ten years out.
Even converting $10,000–$20,000 per year in your early 70s can meaningfully reduce what the IRS forces you to take in your 80s, when income stacking is most severe and healthcare costs are highest. Important: you must take your full RMD before doing any conversion — RMDs cannot be rolled over.
The OBBBA Senior Deduction: A Hidden Conversion Booster (2025–2028)
This is the provision most TRS members haven't heard about — and it expires after 2028.
The One Big Beautiful Bill Act, signed July 4, 2025, created a brand-new above-the-line deduction for taxpayers age 65 and older. The deduction is $6,000 per qualifying person — so a married couple where both spouses are 65 or older can deduct $12,000 on top of the standard deduction. This applies to tax years 2025 through 2028.
Because it's an above-the-line deduction, it reduces your adjusted gross income (AGI) directly — creating more bracket room and effectively letting you convert more at a lower effective rate.
Scenario (MFJ, both age 65+, $48,000 pension) | Without OBBBA Deduction | With OBBBA Deduction |
|---|---|---|
TRS pension income | $48,000 | $48,000 |
Standard deduction ($32,200 base + $3,300 age add-on, MFJ both 65+) | − $35,500 | − $35,500 |
OBBBA Senior Deduction (both 65+) | — | − $12,000 |
Taxable income before conversion | ~$12,500 | ~$500 |
Extra bracket room created | — | ~$12,000 |
Room in 12% bracket for conversions | ~$34,250 | ~$46,250 |
Phase-out warning
The Senior Deduction phases out starting at $150,000 MAGI for married couples filing jointly, and is fully eliminated at $250,000. If you're doing a large conversion, model whether the conversion itself reduces or eliminates your Senior Deduction before proceeding. This is one of the hidden traps the OBBBA introduced alongside the benefit.
Bottom line: 2025 through 2028 is a planning window you don't want to miss. If you're 65 or older and have traditional 403(b) or IRA balances you'd like to convert, the Senior Deduction meaningfully reduces the cost of doing so — but only while it's in effect.
How the WEP/GPO Repeal Changed Your Conversion Math
If you planned your Roth conversion strategy before January 2025, your numbers may be wrong — and not in a small way.
The Social Security Fairness Act, signed January 5, 2025, repealed both the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), effective retroactively to January 2024. If you worked in Social Security-covered employment at any point in your career, you now receive your full earned benefit — with no reduction because of your TRS pension.
For conversion planning, this matters in two directions:
- Less bracket space: A TRS member who expected $0 from Social Security and now receives $1,200/month has $14,400 more in annual income filling up tax brackets before a single dollar of conversion is added.
- Better income security: Restored benefits may mean you can afford to leave more in Roth accounts to grow tax-free, rather than drawing down converted funds immediately.
- Spousal/survivor benefits: GPO repeal restores full spousal and survivor benefits, which can further shift household income projections and change the optimal conversion amount.
If you received a retroactive back-payment from Social Security after the Fairness Act took effect, that lump sum likely increased your taxable income in the year received — worth reviewing against any conversions you did in the same year.
Read more: Social Security Fairness Act: What It Means for Texas Educators
Watch Out for the IRMAA Two-Year Lookback Trap
This is the most expensive mistake I see TRS members make with Roth conversions — and it's completely avoidable with planning.
Medicare uses your MAGI from two years prior to determine your Part B and Part D premiums. So your 2026 income determines your 2028 Medicare premiums. A large conversion in one year that pushes you over an IRMAA threshold means you could pay thousands more in healthcare costs two years later.
MAGI — Married Filing Jointly (2026) | Part B Monthly Premium | Annual IRMAA Surcharge (per person) |
|---|---|---|
≤ $218,000 | $202.90 | $0 |
$218,001 – $274,000 | $284.10 | +$974/yr |
$274,001 – $346,000 | $406.90 | +$2,448/yr |
$346,001 – $410,000 | $443.90 | +$2,892/yr |
$410,001 – $750,000 | $554.90 | +$4,224/yr |
Over $750,000 | $689.90 | +$5,844/yr |
For a TRS retiree converting at age 63 or 64 — even a year or two before Medicare enrollment — a conversion that pushes MAGI above $218,000 triggers an extra $974/year per person in Medicare surcharges starting at age 65. For a couple where both spouses are on Medicare, that's $1,948/year from a single bracket crossing. That's real money that directly offsets the tax savings from converting.
The safe approach
Convert in tranches across multiple years, staying below the first IRMAA threshold. If you're willing to accept an IRMAA step-up in a given year — perhaps because markets have declined and you want to convert more shares at a lower value — model the full two-year impact before committing.
Texas Advantage: No State Income Tax on Conversions
This one is simple and easy to overlook: Texas has no state income tax. A Roth conversion in Texas costs you only the federal rate — there is no state tax on IRA distributions, 403(b) withdrawals, pension income, or conversion amounts.
By contrast, a Texas teacher who moved to California or New York in retirement would face state income tax of up to 13.3% or 10.9% respectively on every dollar converted. Staying in Texas — or being a Texas resident when you convert — is a permanent structural advantage that meaningfully improves conversion math compared to nearly every other state.
This is worth keeping in mind if you're considering relocation in retirement. Converting before you move to a high-tax state is almost always the better sequence.
Frequently Asked Questions
Should I convert to Roth if I already receive a TRS pension?
It depends on how much bracket room you have after your pension income and deductions. Many TRS members can still convert meaningfully — particularly in early retirement before Social Security begins and while the OBBBA Senior Deduction is in effect (2025–2028). The key is sizing the conversion to stay within your current bracket rather than converting a large lump sum that pushes you into a higher rate. A multi-year plan typically works better than a single large conversion.
How does my TRS pension affect how much I can convert each year?
Your pension acts as a permanent income floor that reduces the available room in lower tax brackets. In 2026, for a married couple where both spouses are 65+, the combined standard deduction plus OBBBA Senior Deduction is $47,500. If your pension is $48,000, your taxable income starts at roughly $500 before any conversion. Converting up to the top of the 12% bracket would allow roughly $46,000 in additional taxable income — so a $46,000 annual conversion maximum before pushing into the 22% rate. Your exact numbers depend on your tier, spouse income, and deductions.
Does the WEP/GPO repeal affect my Roth conversion strategy?
Yes — if you now receive Social Security benefits that were previously reduced or eliminated, that income fills your tax brackets and reduces how much you can convert at favorable rates. If you planned your conversion strategy before January 2025, revisit it with current numbers. The repeal is good news for lifetime income but adds complexity to year-by-year conversion sizing.
What is the OBBBA Senior Deduction and how does it help with Roth conversions?
The One Big Beautiful Bill Act created a temporary $6,000 above-the-line deduction per qualifying senior (age 65+) for tax years 2025 through 2028. A married couple where both spouses are 65+ can deduct $12,000 on top of the standard deduction — which reduces AGI and creates additional bracket room for tax-efficient conversions. The deduction phases out starting at $150,000 MAGI for MFJ filers, so large conversions may reduce or eliminate it. This window expires after 2028.
Can I convert my TRS pension itself to a Roth IRA?
No. Your TRS defined-benefit pension is not an account you own — it's a contractual promise of future monthly income. You cannot roll it over or convert it. What you can convert are balances in separate voluntary retirement accounts: traditional 403(b), 457(b), or traditional IRA accounts you may have contributed to during your career. Under Texas Administrative Code Section 35.2, TRS does allow eligible rollover distributions to be directed to a Roth IRA — but this applies to specific distribution scenarios, not the ongoing pension benefit.
Can converting to Roth increase my Medicare premiums?
Yes — this is the IRMAA lookback trap. Medicare uses your MAGI from two years prior, so a large conversion in 2026 affects your 2028 Medicare premiums. Surcharges begin when MAGI exceeds $218,000 for married couples filing jointly, and the Part B premium rises from $202.90 to $284.10 per person at the first tier — an extra $974/year per person enrolled in Medicare. Converting in tranches over several years — rather than one large conversion — typically avoids IRMAA while still making meaningful progress on your pre-tax balance.
Key Takeaways
- Your TRS pension creates a permanent income floor that compresses available tax brackets — generic Roth conversion advice doesn't account for this unique challenge.
- Three windows still work for TRS members: early retirement before Social Security begins, unexpected low-income years, and partial conversions after RMDs begin to reduce future forced distributions.
- The OBBBA Senior Deduction ($6,000/$12,000 for qualifying couples age 65+) creates real extra bracket room for conversions — but expires after 2028. This window is open now.
- The WEP/GPO repeal added Social Security income for many TRS members who didn't plan on it. If you haven't revisited your conversion strategy since January 2025, the numbers have changed.
- The IRMAA two-year lookback means a large conversion today can increase Medicare premiums two years from now. Size conversions deliberately — not reactively.
- Texas's zero state income tax makes every converted dollar cheaper than it would be for educators in high-tax states — a permanent structural advantage worth protecting.
The Bottom Line
Roth conversions can be one of the most powerful tax-planning tools available in retirement — but they have to be designed around your specific income picture, not a generic template. For Texas teachers, that means accounting for your TRS pension income floor, your newly restored Social Security benefit, a closing OBBBA tax window, and the IRMAA cliffs that lurk two years behind every conversion decision.
Done well, a multi-year conversion strategy can meaningfully reduce your lifetime tax bill, protect your Medicare premiums, and leave your heirs with tax-free income. Done without a plan, a large conversion can push you into a higher bracket, trigger surcharges, and cost more than it saves.
If you're a Texas educator approaching retirement and want to model out what a Roth conversion strategy actually looks like for your TRS pension tier, your 403(b) balance, and your Social Security timeline, I'd love to walk through it with you.
Disclaimer: This article is for informational purposes only and does not constitute financial, tax, or legal advice. Please consult a qualified financial advisor, tax professional, or attorney for advice specific to your situation. Past performance is not indicative of future results. TRS retirement rules are complex and change over time. Always verify your specific tier, requirements, and benefit calculations with TRS directly before making retirement decisions. This article is not affiliated with or endorsed by the Teacher Retirement System of Texas. Tax rules referenced are based on federal law as of June 2026, including provisions of the One Big Beautiful Bill Act (OBBBA, signed July 4, 2025). Consult TRS.texas.gov and IRS.gov for current official guidance.
