When is the optimal time to establish a Roth IRA or do a backdoor Roth conversion? Monay at the Investment Management Consultants Association annual meeting in San Diego, Michael Kitces of Pinnacle Advisory Group discussed the subject in detail.

Higher-income couples making more than $193,000 (and individuals making more than $131,000) are not allowed to make direct contributions to Roth IRAs. But anyone can make a contribution to IRA, even though they may not be able to deduct it. More significantly, there are no limits to a Roth conversion.

Moreover, since 2010 there are no limits on Roth conversions. Kitces delved into great detail about how to "safely" set up a backdoor Roth IRA without clashing with the IRS. One recommendation he gave advisors was don't tout Roth conversions prominently in marketing materials or IRS officials may examine you and your clients with a fine-toothed comb.

But there are certain times when even high-earning clients may have a down year and the opportunity to take advantage of Roth conversions is very advantageous. For Pinnacle Advisory Services, Kitces said the most common situation occurs during the "valley after employment ends and before RMDs begin."

Most high-income clients retire before they turn 70 and they don't have to start taking required minimum withdrawals until they are 70 and a half. For clients who may never has taken advantage of Roth IRAs, this is the best time to do it.

However, during a high-income client's career, other opportunities may present themselves. For business-owners whose company has a bad year, the timing can be propitious.

Another situation occurs if a client gets laid off or switches jobs and takes several months off between jobs, reducing that year's income. Since it can be difficult to predict when these situations will arise, Kitces recommends converting amounts as small as $500 or $1,000 to Roth IRAs so clients can capitalize on the opportunity when it happens