Written by Stoic Wealth Advisors | Reviewed by Luke Rudolph, AIF®, MBA, Financial Advisor with LPL Financial | Last reviewed: September 2026
A Roth conversion before retirement means moving eligible pre-tax retirement money into a Roth IRA and generally paying tax now on the previously untaxed portion. Qualified withdrawals may then be tax-free later. The trade can be valuable, but it is not automatically beneficial and generally cannot be undone.
The decision depends on current versus future tax rates, conversion size, Medicare timing, cash available for taxes, future required minimum distributions, and your broader retirement plan.
Key Takeaways
- Roth conversions generally create taxable income in the year of conversion, but the after-tax basis is not taxed again.
- Lower-income years around retirement can create conversion opportunities before Social Security and required minimum distributions raise taxable income.
- A large conversion can raise your tax bracket and may increase Medicare Part B and Part D premiums through IRMAA later.
- Roth conversions completed after 2017 generally cannot be recharacterized back to traditional IRA treatment.
- The five-year rules are more nuanced than simply “do not touch the money for five years,” especially after age 59½.
What Is a Roth Conversion?
A Roth conversion moves eligible assets from a traditional IRA or certain pre-tax employer plans into a Roth IRA. The taxable portion is included in ordinary income for that year. On an after-tax basis, the amount is generally not taxed again, although IRA aggregation and pro rata rules can affect the taxable amount.
Unlike direct Roth IRA contributions, Roth conversions do not have an income limit. The IRS guidance in Topic No. 309 also confirms that Roth conversions made after 2017 cannot be recharacterized, so you generally cannot reverse the transaction later because the tax bill was larger than expected.
Why Lower-Income Years Around Retirement Can Be a Conversion Window
A common opportunity appears after earnings fall but before other taxable income rises. Social Security may not have started, and RMDs may still be years away. That can create room to convert at a lower marginal rate than might apply later.
The applicable RMD age now depends on birth year. Under current SECURE 2.0 rules, people born between 1951 and 1959 generally have an applicable RMD age of 73, while those born in 1960 or later generally have an applicable RMD age of 75. The IRS guidance on applicable RMD ages confirms this distinction.
The goal is usually not to convert everything immediately. Multi-year planning can coordinate tax brackets, Social Security, Medicare, charitable goals, and withdrawals.
What a Roth Conversion Costs in 2026
Because taxable conversion amounts increase ordinary income, current tax brackets matter. According to the IRS 2026 inflation adjustments, the federal brackets are:
| Tax Rate | Single Filers | Married Filing Jointly |
|---|---|---|
| 10% | $0 to $12,400 | $0 to $24,800 |
| 12% | $12,401 to $50,400 | $24,801 to $100,800 |
| 22% | $50,401 to $105,700 | $100,801 to $211,400 |
| 24% | $105,701 to $201,775 | $211,401 to $403,550 |
| 32% | $201,776 to $256,225 | $403,551 to $512,450 |
| 35% | $256,226 to $640,600 | $512,451 to $768,700 |
| 37% | $640,601 or more | $768,701 or more |
The 2026 standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly.
One approach is to estimate taxable income before the conversion, then test different amounts against the target bracket. “Filling” a bracket can help, but capital gains, deductions, state taxes, Medicare, charitable giving, and other income can change the result.
How a Roth Conversion Can Affect Medicare Premiums
A taxable Roth conversion also increases modified adjusted gross income for Medicare IRMAA purposes. Social Security generally uses tax information from two years earlier when determining income-related Medicare premiums. For example, a conversion at age 63 can affect Part B and Part D costs at age 65 if the resulting MAGI crosses an applicable IRMAA threshold.
Future thresholds change, so exact future tiers cannot be known. Model the likely Medicare effect alongside the income-tax cost. For a detailed explanation, see our article on what IRMAA is and how retirement income affects Medicare premiums.
Other Factors That Can Change the Answer
Future required minimum distributions.
Converting traditional assets reduces the balance subject to future RMDs. That may reduce taxable distributions later, depending on future tax rates, growth, spending needs, and RMD age. Roth IRA owners generally do not take lifetime RMDs from their own Roth IRAs.
The Roth five-year rules
There are five different five-year rules, which are often confused. A Roth IRA has a five-year requirement for qualified distributions of earnings. Separately, each conversion has its own five-year period to determine whether early distribution of taxable converted amounts may trigger the 10% additional tax.
For people under age 59½, withdrawing taxable conversion amounts within that conversion’s five-year period can create additional tax exposure unless an exception applies. After age 59½, that conversion-penalty concern generally changes, although the separate qualified-distribution rules for Roth earnings still matter. The IRS Publication 590-B guidance explains the separate rules.
Paying the tax from outside funds
Using cash outside the retirement account to pay conversion taxes can keep more assets inside the Roth IRA. If taxes are withheld from retirement funds, less money reaches the Roth, and taxpayers under age 59½ may also face additional tax consequences on amounts not properly converted unless an exception applies.
Legacy planning
Roth assets can be useful in estate planning because qualified Roth IRA distributions can be tax-free. Beneficiaries remain subject to inherited-account distribution rules, so estate goals should be considered with the owner’s retirement needs rather than in isolation.
When a Roth Conversion May Make Less Sense
A conversion may be less attractive when your current marginal rate is higher than expected later, it would create an unwanted IRMAA tier, you lack outside funds for taxes, or you expect to move soon to a lower-tax state.
It can also be less compelling when large charitable goals may be better served using traditional IRA assets later, or when the conversion would reduce liquidity needed for near-term expenses.
Where This Fits Into Your Broader Financial Plan
A Roth conversion interacts with Social Security, Medicare, investment withdrawals, charitable giving, state residency, estate goals, and cash flow. Stoic Wealth Advisors works with physicians and other healthcare professionals throughout Arizona to evaluate the timing of conversions as part of a broader retirement-income strategy. For more context, see our guide to retirement planning strategies.
Investing involves risk, including possible loss of principal. Tax brackets, RMD rules, IRMAA thresholds, and Roth rules can change. This article is educational and does not constitute individualized financial, investment, tax, or legal advice. Stoic Wealth Advisors and LPL Financial do not provide tax or legal advice. Coordinate conversion decisions with your tax professional before executing any significant transaction.
Weighing a Roth Conversion of Your Own?
If you are approaching retirement, map whether, when, and how much to convert across multiple years instead of looking only at this year’s tax bracket. Schedule a conversation with Luke Rudolph to discuss how a conversion strategy may fit your retirement timeline and broader financial plan.
A Roth IRA conversion—sometimes called a backdoor Roth strategy—is a way to contribute to a Roth IRA when income exceeds standard limits. The converted amount is treated as taxable income and may affect your tax bracket. Federal, state, and local taxes may apply. If you’re required to take a minimum distribution in the year of conversion, it must be completed before converting.
To qualify for tax-free withdrawals, you must generally be age 59½ and hold the converted funds in the Roth IRA for at least five years. Each conversion has its own five-year period, and early withdrawals may be subject to a 10% penalty unless an exception applies. Income limits still apply for future direct Roth IRA contributions.
Frequently Asked Questions
Is a Roth conversion before retirement always a good idea?
No. A conversion depends on current and future tax rates, Medicare effects, liquidity, retirement income, state taxes, and other goals.
Can I undo a Roth conversion?
Generally, no. Roth conversions made after 2017 cannot be recharacterized back to traditional IRA treatment.
How much should I convert in one year?
There is no universal amount. Model different conversion sizes against your marginal tax brackets, deductions, IRMAA exposure, state taxes, cash needs, and future income.
Will a Roth conversion increase my Medicare premiums?
It can. A taxable conversion increases MAGI and may raise Medicare Part B and Part D premiums through IRMAA, generally using income information from two years earlier.
Do I always have to wait five years to use converted money?
No. The rules depend on age and the type of Roth distribution. Each conversion has a separate five-year period for potential early-distribution additional tax, while Roth qualified distributions have a separate five-year requirement.
