With Green State Credit Union, Roth conversion planning sets the size of every conversion by two limits before any money moves: your tax bracket, and the Medicare IRMAA line that applies two years later. The first step is a map of your income for every year from today to the RMD age of 75 (for anyone born in 1960 or later), with the pension, salary and Social Security already filled in.
Most teachers start looking after something shifts: a tax law change, a bad market year, or a rule they thought was settled. Last year's plan, say "convert a little each year until 73," suddenly looks shaky. Green State Credit Union advisors rebuild it from rules known today, not from guesses about what Congress or the market will do next.
Who needs Roth conversion planning when a state pension already fills the low brackets?
Households with a state pension plus a large pre-tax 403(b) or 457(b) usually need it, because the pension pays for life and later required minimum distributions get added to it every year. Kenji (hypothetical), 63, is a retiring band director.
His $48,000 pension alone absorbs the full $32,200 joint standard deduction (2026, set by the IRS) and leaves $15,800 of taxable income before a single 403(b) or 457(b) dollar comes out. The low-tax room is smaller than most teachers expect.
The planning covers a map of every year from now to RMD age, a target conversion amount for each year, which account converts (an in-plan Roth conversion in a 457(b) if the plan offers one, or an IRA), and how the tax gets paid.
Here the firm's evidence-based habit shows up in practice. Green State Credit Union sizes amounts from tax rules and ages known today. It doesn't lean on forecasts of future tax law or market direction, and the same diversified holdings stay in place before and after the conversion.
The first ninety days with Green State Credit Union, week by week
Weeks 1-2: intro call, then your documents arrive. Green State Credit Union checks whether Agnieszka's 457(b) allows in-plan Roth conversions and whether any past Form 8606 shows after-tax IRA basis.
Weeks 3-5: the income map gets built year by year, from Kenji's pension start through Agnieszka's retirement at 60 and both RMD ages, with Social Security at full retirement age 67 as the base case.
Weeks 6-9: each year's conversion is sized against the bracket edge and the IRMAA line two years ahead. The cash for the tax is assigned to savings, not to the converted account.
Weeks 10-13: you get the written schedule, and the first conversion, if any, is placed with the plan or custodian. It's timed so estimated tax payments can be made by the quarterly deadline.
Waiting until RMDs at 75 shrinks the window
Kenji has 14 years between retiring at 61 and RMDs at 73. Every year without a conversion is one fewer low-income year to use. An RMD can never be converted, and once RMDs begin they add taxable income to the pension every year for life. A conversion delayed to 74 has to fit into a narrower bracket than the same conversion done at 62.
Does one big 457(b) conversion in the retirement year trigger IRMAA?
Yes, if the conversion pushes joint MAGI above $218,000 (2026 figure from the Centers for Medicare & Medicaid Services), Part B costs more two years later. Medicare bases each year's premium on the tax return from two years before, so a single large conversion can raise a premium you won't see for a while.
Kenji and Agnieszka (hypothetical) planned to convert $150,000 of her 457(b) in the year she retires at 60, when Kenji is 63. Her salary stops in June, so it looked like a quiet tax year. Joint MAGI that year: $48,000 pension + $31,000 salary + $150,000 conversion = $229,000.
That's above the $218,000 joint line. Kenji's first Medicare year at 65 would cost $284.10 per month instead of $202.90 (2026 figures, for illustration). The gap is $81.20 per month, or $974.40 for the year, before any Part D surcharge.
They decided on $75,000 that year and $75,000 the next. MAGI becomes $154,000, then $123,000, both under the line, and less of the conversion lands in a higher bracket. The tax comes from savings, so the full amount reaches the Roth.
One nuance: income at Kenji's 62 never touches his Medicare premium. But if you buy ACA coverage before 65, that premium tracks the same year's income. Roth money is still invested and can lose value, including the amount converted.
The rule behind the surcharge
What they decided
From the year you turn 63, add any planned conversion to the rest of that year's MAGI and compare it with the IRMAA line ($218,000 joint, $109,000 single for 2026). If the total crosses it, split the conversion across two or more years.
| Age | Rule that switches on | Effect on conversions |
|---|---|---|
| Any age after separation | 457(b) withdrawals free of 10% penalty | Penalty-free cash before 59½ |
| 59½ | 10% penalty ends on IRA and 403(b) | Withholding from a conversion no longer penalized |
| 63 | Income sets Part B premium at 65 | Check MAGI against $218,000 joint |
| 65 | Medicare Part B begins | Surcharge applies if line crossed |
| 70½ | Qualified charitable distributions allowed | Charity-bound money may skip converting |
| 75 | RMDs begin | Take RMD before converting that year |
Where a CPA or estate attorney takes over
Green State Credit Union can size and schedule conversions, but it can't predict future tax law or undo a conversion, since recharacterization is gone. Pro-rata math on after-tax IRA basis, quarterly estimated payments and state tax filings belong to a CPA. Naming a trust as Roth beneficiary is an estate attorney's work. And if your pre-tax balance is small next to your pension, or most of it will go to charity through qualified charitable distributions after 70½, conversions can add tax now without a later payoff, so a schedule isn't worth building.
Which documents do you get, and by which deadline?
You get four documents, the first before any work starts and the last every February. Each one has a date attached, so you know what to expect and when.
A common slip shows why the sequence matters. Take a $40,000 IRA conversion at 57 with the tax withheld, then dip into the converted money at 58. The $8,000 withheld is a taxable distribution with an $800 penalty. The $10,000 taken out within that conversion's five-year clock adds a $1,000 penalty. That's $1,800 lost, and $8,000 never reaches the Roth.
- Written agreement stating exact cost, signed before week one
- Year-by-year schedule through age 75, by about week nine
- Amount, account and payment dates before each conversion
- Payment dates: April 15, June 15, September 15, January 15
- Each February: Form 1099-R and Form 8606 compared, next year's amount reset
Questions about Roth conversion planning
Doesn't a state pension mean Roth conversions never pay off?
No, a pension often makes conversions more useful, though sometimes in smaller amounts. Pension income stacks with future RMDs, so a large pre-tax balance can be taxed at higher rates later. Conversions pay off when you can fill the room left under a bracket or IRMAA line now. Green State Credit Union checks that room before suggesting any amount.
What happens if I convert part of my 457(b) while I'm still drawing a district salary?
The converted amount counts as ordinary income that year on top of your salary, which can push more of it into a higher bracket. If you're 63 or older that year, the same income also sets your Medicare Part B premium two years later. Before 63, it doesn't affect Medicare at all. Many teachers wait for a lower-income year or split the amount.
Before the intro call, pull these statements and letters
Bring four sets of paper, and each answers one question the schedule depends on.
- Federal returns, past two years (MAGI Medicare uses, Form 8606 basis)
- Pension benefit estimate with survivor option (sets the income floor)
- Latest 403(b) and 457(b) statements and Roth rules (which money converts, surrender charges)
- Social Security estimate and any IRMAA letter (when the lookback bites)
An RMD can never be converted, so the years before 75 are your window.
Where the rules come from
Related Green State Credit Union services
This is general information, not personalized investment, tax, or legal advice. Investing involves risk, including loss of principal. Before making decisions about your retirement or investments, consult a qualified professional about your own circumstances.