Roth conversions have become one of the most effective long-term tax-planning tools available to retirees and high-income earners. By moving money from a traditional IRA or pre-tax retirement account into a Roth IRA, you pay taxes today in exchange for tax-free growth and tax-free withdrawals later.
Used intentionally, Roth conversions can reduce lifetime taxes – not just for you, but also for the next generation.
Below, we’ll cover the key reasons to consider a Roth conversion, how to determine the right timing, and when a conversion might not make sense.
Why Consider a Roth Conversion?
Lock in Known Tax Rates
A Roth conversion allows you to pay taxes now at tax rates you can see rather than waiting and risking higher future rates. In 2026, the tax brackets are historically low compared to the past.
Reduce Future RMDs
Traditional IRAs are subject to Required Minimum Distributions (RMDs) starting at age 73 (age 75 if born after 1959). These forced withdrawals increase your taxable income, impact Medicare premiums, and can push Social Security into being increasingly taxable. Converting before these begin reduces the size of your future RMDs.
Increase Flexibility in Retirement
Roth IRAs have no RMDs and provide tax-free income. This gives you more control over your taxable income each year and a powerful planning advantage for:
- Managing Medicare Income Related Monthly Adjustment Amount (IRMAA) brackets
- Reducing Social Security taxation
- Preserving Affordable Care Act (ACA) subsidies prior to Medicare
- Keeping income steady in retirement
Protect the Surviving Spouse
After one spouse dies, the surviving spouse must file taxes as single, which means higher tax brackets and much tighter Medicare IRMAA thresholds. The same amount of income that was received as a married filer can result in significantly more taxes for the single filer. Converting an IRA during a couple’s lifetime, especially while both are living and filing jointly, can help reduce the surviving spouse’s future tax burden.
Improve the Value of Your Inheritance to Heirs
The SECURE Act generally requires most non-spouse beneficiaries to empty an inherited IRA within 10 years. With a traditional IRA, those withdrawals are taxable income to the heir, often during their peak working years. A Roth IRA, however, passes tax-free, and while heirs still must deplete the account within 10 years, those withdrawals come with no impact on their tax bill. This can dramatically increase the after-tax value of what you leave behind.
Best Timing for Roth Conversions
Low-Income or “Gap” Years
Some of the most attractive times for Roth conversions occur:
- After retirement and before RMDs begin
- After retirement and before claiming Social Security
- During a year with unusually low income
These “gap years” often create an opportunity to convert money at lower tax rates.
Market Downturns
If markets decline temporarily, converting depressed holdings while values are down means paying tax on a smaller amount, then allowing the recovery to occur inside a Roth.
Before Key Tax Events
You may want to consider conversions before:
- RMDs start at age 73 (age 75 if you were born after 1959)
- Starting Social Security
- A spouse passes away
- Moving to a higher-tax state
- Anticipated tax-law changes that may raise rates
How Much Should You Convert?
Target Specific Tax Brackets
One of the most common strategies is “filling up” a tax bracket: converting only enough to reach the top of the 12% or 22% bracket, for example.
Watch Your Medicare IRMAA Thresholds and other tax traps
Medicare uses income from two years prior to determine whether you owe IRMAA surcharges. A large conversion could push you into a higher Medicare premium bracket, so careful planning is essential. In addition, if your Social Security income is not yet fully 85% taxable, then each dollar of Roth conversion income will also push another dollar of Social Security into the taxable range, thus instead of adding $1 of taxable income, you are actually adding $1.85, increasing your effective tax rate.
Be Strategic About State Taxes
If you expect to move to a lower-tax state (or no-tax state), delaying a conversion may make sense. Conversely, if you live in a low-tax state today but will retire to a high-tax state later, converting now can be beneficial.
Have Cash Available to Pay the Taxes
It is almost always better to pay the tax bill with non-IRA money. Using IRA dollars to pay taxes reduces the amount moved to the Roth and may trigger penalties if you’re under age 59½. You want every IRA dollar available to get into the tax-free Roth environment, not taking some of those funds to pay the taxes.
Benefits to the Account Owner
- Tax-free withdrawals later in life
- Lower future RMDs, reducing forced taxable income
- Better control of taxable income each year
- Reduced impact on Social Security taxation and Medicare premiums
- More financial flexibility and peace of mind in retirement
- Spread out the tax hit of a large withdrawal need over a couple years.
Benefits to Heirs
- Inherited Roth IRAs are income-tax-free to beneficiaries
- Beneficiaries still must empty the account within 10 years, but have full flexibility on timing
- Ideal for children or grandchildren in higher tax brackets
When Roth Conversions May Not Make Sense
While powerful, Roth conversions are not right for everyone.
You Expect to Be in a Much Lower Future Tax Bracket
If current income is high but future income will be very low, you may end up paying more tax by converting now. However, if married, you may want to consider what will happen if one spouse dies and the other is in the higher single tax brackets, not only your tax brackets as a couple.
You Don’t Have the Cash to Pay the Taxes
Using IRA funds to pay the tax undermines the long-term benefit.
You Need the Money Soon
The shorter the time horizon, the less benefit from long-term Roth growth. However, if you know you’ll need a large distribution from your IRA in the near future, you could use a Roth conversion to help spread the taxable income over a couple tax years instead of taking all the income in one year.
Conversions Push You Into High Tax Brackets or IRMAA Penalties
Sometimes the added tax cost outweighs the benefit. Though, if doing a Roth conversion now will keep your RMDs from pushing you into a higher IRMAA bracket each year in the future, it may still make sense.
You Intend to Leave the IRA to Charity
If you plan to leave most or all of your traditional IRA to a qualified charity, or will be giving all of your RMDs as Qualified Charitable Distributions (QCDs) during your lifetime, converting is usually unnecessary. Charities pay zero tax on IRA distributions. In this case, leaving the money in the traditional IRA is the most tax-efficient choice.
Practical Tips for Getting It Right
- Consider converting later in the year, once income is more predictable.
- Spread conversions over multiple years.
- Run multi-year tax projections with a CPA or financial planner.
- Remember that Roth conversions are permanent—you cannot undo them.
Final Thoughts
Roth conversions can be a powerful way to reduce lifetime taxes, increase flexibility in retirement, and pass more to your heirs tax-free. The key is careful planning. Choosing the right timing, the right amount, and building a multi-year strategy that aligns with your broader financial goals is essential.
Because Roth conversions affect not only your taxes today, but also your Medicare premiums, Social Security taxation, and future RMDs, it’s important to evaluate the full picture before moving forward.
If you’re considering whether a Roth conversion makes sense for you, our team at Petra Financial Advisors can help you model multi-year tax scenarios, determine the most efficient conversion amounts, and create a strategy tailored to your long-term plan. We’d be happy to walk with you through both the analysis and the implementation.