I’m 70 Years Old With $1.2 Million in an IRA. Is It Too Late to Convert to a Roth IRA?

In retirement, it’s not too late to convert your money into a Roth IRA. The IRS will let you convert qualified funds at any time, as long as you pay the associated taxes. It might, however, be too late to get real benefit from that decision. A Roth IRA works best when it has time to grow, and when you can take advantage of tax arbitrage between current (lower) rates and future (higher) ones.

But there’s more to think about. If you want to ask questions about your own personal situation, consider matching with a fiduciary financial advisor.

For example, say that you’re 70 years old with $1.2 million in an IRA. Legally it’s not too late to convert that money into a Roth account. Practically, however, you’d pay nearly $400,000 in conversion taxes in exchange for the benefit of avoiding required minimum distributions (RMDs) and tax-free growth for the future.

What Are the Benefits of a Roth Conversion?

Investors who hold money in a pre-tax portfolio, like a traditional IRA or a 401(k), can make what’s called a Roth conversion. This is when you move assets from your pre-tax portfolio and put it into a Roth IRA. A Roth conversion has no limits, unlike contributions made from earned income. You can convert assets in any amount and as often as you like. Otherwise, at 70 you must still have qualifying earned income through work or a business to make regular contributions, which are capped by an annual limit.

The main advantage of a Roth IRA is the tax-free withdrawals. You pay no taxes on qualified withdrawals from a Roth IRA, both principal and returns. This is as opposed to a tax-deferred portfolio, for which you pay no taxes on the money you contribute but full income taxes on money you withdraw. A Roth IRA also has no RMD requirements, letting you hold investments as long as you like.

This tax status makes a Roth IRA good for estate planning, as your heirs will also be allowed to take the money tax-free. This is as opposed to a tax-deferred account like a traditional IRA on which your heirs would pay income taxes.

Consider discussing how a Roth conversion would impact your retirement and estate planning goals with a financial advisor.

What Are the Drawbacks of Roth Conversions?

Otherwise, at 70 you must still have qualifying earned income through work or a business to make regular contributions, which are capped by an annual limit. For 2026, the IRA contribution limit is $7,500, with an additional $1,100 catch-up contribution for people age 50 and older, for a total of $8,600.

This tax status makes a Roth IRA good for estate planning, as your heirs can generally receive qualified Roth IRA distributions tax-free. However, beneficiaries are subject to inherited IRA distribution rules, and many non-spouse beneficiaries must empty an inherited Roth IRA within 10 years. This is as opposed to distributions from a tax-deferred account like a traditional IRA, on which your heirs would pay income taxes.

A financial advisor can help you plan for accounts with commingled funds, which is when some money is accessible but some remains locked up.

Roth vs. Traditional IRA: The Rule Of Thumb

It’s easy to think that a Roth IRA is automatically the better choice. After all, the Roth portfolio enjoys tax-free growth and qualified withdrawals. So if you put in $1 and it grows to $10, with a Roth IRA you only pay taxes on the $1. With a traditional IRA funded entirely with pre-tax contributions, you generally pay income taxes on the full $10 when you withdraw it.

The problem is that the tax you pay on contributions and conversions is all money that you could have invested. So, for example, say that you roll $1.2 million from your traditional IRA into your Roth IRA. The federal tax bill would depend on your filing status, deductions, other taxable income and whether any of the IRA consists of an after-tax basis. For 2026, the top federal marginal income tax rate is 37%, but only taxable income above the applicable threshold is taxed at that rate.

A Roth investment may be preferable if you currently pay lower taxes than you expect to pay at withdrawal, so that you exchange the current lower rate for the higher future one (tax arbitrage). A longer investment horizon can also increase the potential benefits of a Roth conversion, particularly if you expect higher future tax rates or want to reduce required minimum distributions.

A pre-tax investment is a good idea if you currently pay higher taxes than you expect to pay at withdrawal, so that you exchange your current higher rate for a future lower one (capital maximization).

A financial advisor can help you do a personal evaluation of the pros and cons in your situation.

Should You Convert Your Savings?

So, say you’re retired and you are sitting on $1.2 million in a traditional IRA at age 70. Is it too late to convert your savings to a Roth IRA?

No, it is not legally too late. The IRS allows you to make a conversion at any time so long as you have qualifying funds, such as a traditional IRA, and can pay the conversion taxes. At age 70, you can take that money from your IRA. This gives you the money to pay your conversion taxes, but reduces your portfolio by the amount of the tax bill.

However, whether a conversion provides meaningful value depends on your current and future tax rates, how you pay the conversion taxes and how long the money remains invested. By age 70, you likely have your retirement income established. Your tax rate could change later in retirement, particularly once required minimum distributions (RMDs) begin at age 73. A Roth conversion can reduce future RMDs, but the upfront tax bill may outweigh those benefits.

Take our example above. If you convert the full $1.2 million at age 70, the amount remaining in your Roth IRA will depend on the conversion tax bill. Assuming a 35% effective tax rate on the conversion, you would pay $420,000 in taxes and have $780,000 left to invest. At a hypothetical 8% annual return over five years, that balance could grow to about $1.15 million by age 75. At a 4% withdrawal rate, that’s about $45,800 in annual tax-free income, assuming the Roth withdrawal meets the applicable requirements. If you don’t convert, the full $1.2 million could grow to about $1.76 million over five years at the same return, but withdrawals would generally be taxable. RMDs would begin at age 73, assuming you turn 73 under the current rules, so the actual traditional IRA balance at age 75 would also reflect those withdrawals.

Now, this is a clumsy example. You would most likely convert this money in stages to avoid the highest tax brackets, increasing the value of your Roth portfolio. But the point is that a large conversion can create a substantial upfront tax bill. Whether that cost is worthwhile depends on the taxes you would otherwise pay on future withdrawals, the effect on RMDs and how long the converted money can grow tax-free.

Before converting your savings, see if you’re on track for retirement:

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Why a Roth Conversion at Age 70 Could Make Sense

A Roth conversion might make some sense if this is a supplemental retirement account. Then, a few edge cases might make this useful for money management. For example, converting your money to a Roth portfolio would let you take out big, one-time withdrawals (like for a new car or a big trip) without triggering higher taxes that year, provided the withdrawals are qualified.

It may also help manage how your income interacts with Social Security. Up to 85% of Social Security benefits can be taxable based on what’s known as your “provisional income,” which includes withdrawals from traditional retirement accounts. By shifting some assets into a Roth, you may be able to fund future spending without increasing your taxable income, which can help limit how much of your Social Security benefits are subject to tax. That said, the conversion itself could temporarily increase your income and make more of your benefits taxable in the year you convert.

It can also be useful for estate planning, if you would like to leave your heirs a valuable, tax-free asset. But these cases are relatively niche, and still might not offset the value lost to taxes.

A conversion can also increase your Medicare premiums because Medicare uses income from two years earlier to determine income-related premium adjustments. And once RMDs begin, you must satisfy that year’s required distribution before converting additional traditional IRA funds to a Roth. The RMD itself cannot be converted.

If you have questions about your retirement income and taxes, get matched with a financial advisor today.

Bottom Line

At age 70, it isn’t too late to convert savings into a Roth IRA. The IRS allows conversions at any age, but the converted amount is taxed as ordinary income in the year of the conversion. Whether it makes sense, however, depends on your broader financial picture, including your current tax bracket, expected future income, time horizon and estate planning goals. In many cases, the upfront tax cost and shorter growth window can limit the potential benefits, especially if your tax rate is unlikely to change meaningfully. But there are situations where a conversion can still be useful, such as managing taxable income, reducing future required minimum distributions (RMDs), which generally begin at 73, or leaving tax-free assets to heirs.

”Many retirees experience a so-called income valley in their late 60s or early 70s. This is the period after they have left traditional work and before claiming Social Security or starting required minimum distributions from their pretax accounts. As such, the income valley is characterized by low taxable income, which can present a great opportunity for Roth conversions. Whether it’s the right choice for you will depend on your larger income picture and how much you’re looking to convert,” said Tanza Loudenback, CFP®.

Tanza Loudenback, CFP® provided the quote used in this article. Please note that Tanza is not a participant in SmartAsset AMP, is not an employee of SmartAsset and has been compensated. The opinion voiced in the quote is for general information only and is not intended to provide specific advice or recommendations.

Roth IRA Management Tips

Now let’s look at this from another point of view. Say that you already have a Roth IRA in place and you’re winding down with work. What should you do with your Roth IRA once you retire?
A financial advisor can help you build a comprehensive retirement plan. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.