Roth conversion early or late?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
User avatar
Topic Author
Posts: 137
Joined: Fri Feb 17, 2012 8:59 am
Location: Tennessee

Roth conversion early or late?

Post by Blister » Thu Feb 13, 2020 8:59 pm

Just trying to get some opinions. Have been doing some tIRA to Roth conversions since retirement since retiring and was thinking whether it makes more sense to do this early in the year or wait till December. Any thoughts ... What do others do in this situation?
Everthing works out in the end. If it doesn't then its not the end.

Posts: 7842
Joined: Tue Nov 20, 2007 6:02 am

Re: Roth conversion early or late?

Post by mhalley » Thu Feb 13, 2020 9:06 pm

There are pluses and minuses to both. Done towards the end of the year, you have a clearer picture of your tax situation and exactly how much you can convert at your desired tax bracket. But as the stock market trends up, you might be able to convert less shares due to a nav increase. I do it in late dec. myself, but I have some shares in a private stock that sometimes gives surprise distributions.

Posts: 33
Joined: Sun Oct 04, 2015 4:01 pm

Re: Roth conversion early or late?

Post by czaj » Thu Feb 13, 2020 9:22 pm

I think a combination of the two can make sense.

1. Convert most of the estimated desired amount early in the year (to capture expected gains in Roth throughout the year).
2. Use an end of year conversion to optimize based on tax situation.

Posts: 530
Joined: Tue Jun 06, 2017 12:09 am
Location: SF Bay Area

Re: Roth conversion early or late?

Post by RetiredAL » Thu Feb 13, 2020 9:28 pm

If there is a good dip during the year, I'll do mine during the dip as a fortuitous gift, otherwise I'll do it in Dec.

So far it's been Dec the last 4 years. The one decent dip that did occur happened in a Dec.

User avatar
Posts: 1047
Joined: Mon Feb 27, 2017 1:15 pm

Re: Roth conversion early or late?

Post by WoodSpinner » Thu Feb 13, 2020 10:48 pm


I have been using a Pseudo Dollar Cost Averaging approach. Concert a bit every month with an option for more if there is a Dip. I haven’t backtested it but it seems reasonable to me. :?



Posts: 1594
Joined: Fri Apr 19, 2019 5:15 pm
Location: Arizona

Re: Roth conversion early or late?

Post by Lee_WSP » Thu Feb 13, 2020 10:50 pm

Could keep it in taxable until the beginning of December. That way you can be sure you won't forget you made XYZ contribution or rollover.

Posts: 1042
Joined: Fri Apr 08, 2016 12:41 pm

Re: Roth conversion early or late?

Post by GAAP » Fri Feb 14, 2020 12:43 pm

I've been doing them at the start of the year with a true-up at the end of the year. I'm thinking about quarterly this year -- effectively a DCA approach. I might speed up the conversions if a "significant" market drop occurred -- but I'll have to define what that means first.

I do miss the re-characterization option...
“Adapt what is useful, reject what is useless, and add what is specifically your own.” ― Bruce Lee

Post Reply