Converting some or all of a traditional IRA to a Roth IRA is one of the most common planning questions I get from people in their 50s, 60s, and early 70s. Done at the right time and in the right amount, a conversion can lower the taxes you and your heirs pay over your lifetime. Done without a plan, it can simply create a large tax bill. Here is how to think it through.
What a Roth conversion is
When you convert, you move money from a traditional IRA (or an old 401(k)) into a Roth IRA. Any pre-tax contributions and earnings you convert are added to your taxable income for that year and taxed at ordinary income rates. In exchange, the money grows tax-free from then on, qualified withdrawals are tax-free, and Roth IRAs have no required minimum distributions during your lifetime.
A few rules to know up front:
- There is no income limit on conversions. Even if your income is too high to contribute to a Roth IRA directly, you can still convert.
- Conversions are permanent. Since 2018, you can no longer undo (recharacterize) a conversion if you change your mind.
- Each conversion starts its own five-year clock. If you are under 59½ and withdraw converted money within five years, you may owe a 10% penalty.
- If you have reached the age for required minimum distributions, you must take that year’s RMD before converting. RMDs cannot be converted.
- Try to pay the tax from money outside the IRA. If you are under 59½ and use IRA funds to pay the tax, that amount is treated as a distribution and may be taxed and penalized.
When a conversion may make sense
- You are in a lower-income window. The years between retirement and the start of Social Security and RMDs are often the lowest-tax years of a person’s life. That is frequently the best time to convert.
- You expect your tax rate to be the same or higher later. Large RMDs later in retirement, a pension, or the loss of the married filing jointly brackets after a spouse passes away can all push retirees into higher brackets.
- Your account value is down. Converting after a market decline means you pay tax on a smaller balance, and the recovery happens inside the Roth.
- You want to leave tax-free money to your heirs. Most non-spouse beneficiaries must empty an inherited IRA within 10 years. Inheriting a Roth instead of a traditional IRA means those withdrawals are generally tax-free.
Filling up a tax bracket
Most people are better off converting in pieces over several years rather than all at once. A common approach is to convert just enough each year to fill up your current tax bracket.
For example, in 2026 the 22% bracket for married couples filing jointly ends at $211,400 of taxable income. A couple with $150,000 of taxable income could convert about $61,400 and still stay in the 22% bracket. Converting more would push the additional income into the 24% bracket. This is a hypothetical illustration; your own numbers will differ.
Keep in mind that more income can have side effects beyond the bracket itself. It can raise the Medicare premiums you pay two years later, increase how much of your Social Security is taxable, and affect certain deductions. Your tax professional should run the numbers before you convert.
Traditional IRA vs. Roth IRA at a glance (2026)
| Traditional IRA | Roth IRA | |
|---|---|---|
| Contribution limit | $7,500; $8,600 if age 50 or older | $7,500; $8,600 if age 50 or older |
| Age limit to contribute | None, as long as you have earned income | None, as long as you have earned income |
| Income limits | None to contribute; deduction may phase out if you or your spouse have a workplace plan | Contributions phase out between $153,000 and $168,000 (single) and $242,000 and $252,000 (married filing jointly) |
| Tax treatment | Contributions may be deductible; withdrawals taxed as ordinary income | No deduction; qualified withdrawals are tax-free |
| Required minimum distributions | Begin at age 73 (75 if born in 1960 or later) | None during the owner’s lifetime |
For more detail on contribution and deduction rules, see Brush Up On Your IRA Facts.
Is a conversion right for you?
Roth conversions tend to work best for people who have time for the account to grow, expect to be in the same or a higher bracket later, can pay the tax from other savings, or want to leave tax-free assets to their children. They tend to work less well if you will need the money soon, expect a much lower tax rate in retirement, or would have to use IRA money to pay the tax.
Because the decision can’t be reversed, it’s worth modeling a few scenarios with your financial advisor and tax professional before you act. Conversions must be completed by December 31 to count for that tax year.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
