In this guide
The rule: RMD first, conversion second
Once you reach RMD age — 73 for anyone reaching 73 between 2023 and 2032, rising to 75 in 2033 — every calendar year comes with a required minimum distribution from your traditional IRA, SEP, SIMPLE, and workplace plans. In any year an RMD is due, the tax code imposes a strict sequence: the RMD must be fully distributed to you before any amount from that IRA can be converted to a Roth.
This isn't a custodian policy or a best practice — it's Treasury regulation. The first dollars that leave your IRA in an RMD year are automatically treated as the RMD, "to the extent of" the amount required (Treas. Reg. §1.408A-4, Q&A-6). You cannot designate a later withdrawal as the RMD and an earlier one as the conversion. The calendar decides, not the paperwork.
The two-step for RMD years: first, withdraw the full RMD as a normal taxable distribution (spend it, invest it in a taxable account, or give it via QCD). Second — same year is fine — convert whatever additional amount your bracket can absorb. Both steps are ordinary income; the order is the whole game.
Why a conversion can't satisfy an RMD
The logic is clean once you see it. A Roth conversion is, in the tax code's eyes, a rollover — money moving from one retirement account to another. And IRC §408(d)(3)(E) (with §402(c)(4) for workplace plans) says required minimum distributions are ineligible for rollover. The entire point of an RMD is that Congress is done letting that money sit in a tax-advantaged wrapper: it must come out, land on your 1040, and be taxed.
Letting a conversion count as an RMD would defeat that purpose — the money would jump from one tax shelter into an even better one (the Roth) without ever truly leaving. So the two moves are mutually exclusive by design: the RMD exits the retirement system; the conversion stays inside it.
The age-73 first-year trap
Here's the nuance that catches even advised investors. For your first RMD year, the deadline is generous: you can delay that first RMD until April 1 of the following year. Many people read that and assume they can convert freely during the year they turn 73 and deal with the RMD next April.
They can't. The first-dollars-out rule applies to the calendar year the RMD is attributable to, not its payment deadline. If you convert in the year you turn 73 without first taking that year's RMD, the conversion swallows the RMD — and you've created an excess contribution. If you plan to convert in your first RMD year, take the RMD first and give up the April deferral for the amount required. (Deferring also stacks two RMDs into the next year, which is usually bad bracket management anyway.)
Turning 73 this year and planning a conversion? Take this year's RMD before converting — the April 1 extension does not protect a conversion done first.
If you converted before taking your RMD
The mistake has a defined shape and a defined fix. The portion of your conversion equal to the unmet RMD is treated as a distribution to you (taxable, as the RMD always was) followed by an excess contribution to your Roth IRA. Excess contributions accrue a 6% excise tax per year (Form 5329) for as long as they remain in the account.
The fix is a corrective distribution: withdraw the excess amount plus its attributable earnings from the Roth. Done by your tax-filing deadline (plus extensions), the 6% excise is avoided entirely — the earnings are taxable, but the problem is contained to one year's paperwork. Call the custodian, use the words "removal of excess contribution," and loop in your CPA so Form 5329 and the 1099-R codes line up. What you should not do is leave it and hope: the 6% repeats every year the excess sits there.
Multiple IRAs and 401(k)s
Two aggregation rules shape the sequencing when you have several accounts:
- IRAs aggregate. Your IRA RMD is calculated per account but can be taken from any combination of your IRAs. The safe practice: satisfy your total IRA RMD across all IRAs before converting from any of them — a conversion from IRA B while IRA A's RMD is unmet still trips the rule.
- Workplace plans stand alone. A 401(k)'s RMD must come from that 401(k), and an IRA conversion doesn't require the 401(k) RMD first (and vice versa). But if you're rolling a 401(k) into an IRA and converting in the same year, the plan must pay out that year's 401(k) RMD before the rollover — same first-dollars logic, one account earlier.
Using conversions to shrink future RMDs
The relationship between conversions and RMDs isn't only a compliance trap — it's the strategy. Every dollar you convert before age 73 permanently leaves the balance your future RMDs are computed on, and Roth IRAs have no lifetime RMDs at all. Convert enough in your sixties and the RMDs that would have shoved you into higher brackets — dragging IRMAA and Social Security taxation with them — simply never materialize.
This is the "tax torpedo" defense in one sentence: RMDs are a forced-income problem you can only defuse before it starts. The calculator models exactly this — compare the leave-it path's swelling RMD-era taxes against converting during your gap years, on your own numbers.
Same-year RMD + conversion, done right
| Step | Action | Tax character |
|---|---|---|
| 1 | Withdraw the full RMD (all IRAs) — spend, invest in taxable, or send to charity as a QCD | Ordinary income (QCD portion: excluded) |
| 2 | Measure remaining bracket room with your CPA — top of your current bracket minus income including the RMD | — |
| 3 | Convert up to that room from the same or another IRA | Ordinary income |
| 4 | Confirm the 1099-Rs next January: RMD coded as a normal distribution, conversion as a conversion | — |
One elegant pairing deserves mention: a QCD satisfies the RMD without adding to your income — so giving the RMD to charity and converting into the bracket room the RMD would have consumed is one of the cleanest one-two combinations in retirement tax planning. Details in the QCD guide.