Roth conversions

Roth conversions: the overview

A Roth conversion moves money from a pre-tax account, such as a traditional IRA, into a Roth IRA. The converted amount is added to your gross income for the year you convert^[1]. In return, the money then grows in the Roth, qualified withdrawals come out tax-free^[9], and a Roth IRA has no required minimum distributions while the owner is alive^[3]. A conversion made after 2017 cannot be undone (recharacterized) once it is done^[1].

So the decision comes down to tax rates. You pay income tax either now, at this year’s marginal rate, or later, at the rate that applies when the money comes out (yours in retirement, or your heirs’ if they inherit the account).

The decisions

• How much to convert each year. Most plans convert up to the top of a tax bracket. For 2026, the 12% bracket for a married couple filing jointly ends at $100,800 of taxable income and the 22% bracket at $211,400; for a single filer the same brackets end at $50,400 and $105,700. Taxable income is counted after the standard deduction of $32,200 (joint) or $16,100 (single)^[2]. Brackets are marginal: a dollar over a boundary is taxed at the higher rate, not the whole conversion.
• Which years. Conversions are cheapest in low-income years, typically between retiring and starting Social Security and required distributions. RMDs start at 73 for people born 1951–1959 and at 75 for people born in 1960 or later^[3][10]; after that the RMD itself fills the low brackets.
• What else the income changes. A conversion raises the income every means test sees. Medicare’s IRMAA surcharge uses your income from 2 years earlier^[4], and for 2026 it starts above $109,000 (individual) or $218,000 (joint)^[5]. Before 65, the ACA premium tax credit stops above 400% of the poverty line^[6], about $62,600 for one person and $84,600 for two on the 2025 guidelines^[7]. From 65, the $6,000 senior deduction (2025–2028) shrinks by 6% of modified AGI above $75,000 ($150,000 joint)^[8], so a conversion can cost more than its bracket suggests.
• When you need the money. Each conversion starts its own five-year period^[9]. Taking converted dollars out within five years and before age 59½ can trigger the 10% additional tax on the part that was taxed at conversion. That is why a conversion ladder converts about five years ahead of the spending it pays for.

What to read, in order

Start with how a Roth ladder works, then the three 5-year rules, which decide when converted money can be spent. Put your own numbers through the conversion tax calculator. Before you commit to a plan, read what the research says about when conversions pay off. If you are still working, the backdoor Roth and 529-to-Roth rollovers are the other routes into a Roth. Retiring before 65 means conversions compete with ACA subsidies for the same income: one MAGI budget explains the trade-off, and the IRMAA lookback covers the Medicare side.