What is a Roth conversion?

A Roth conversion is when you move money from a pre-tax retirement account (traditional IRA, 401(k), SEP IRA, or SIMPLE IRA) to a Roth IRA. The converted amount is added to your taxable income for that year — you pay income tax on it now in exchange for tax-free growth and withdrawals in retirement.

How much tax will I pay on a Roth conversion?

The converted amount is taxed as ordinary income at your marginal tax rate. For example, if you convert $20,000 and you're in the 22% bracket, you'll owe approximately $4,400 in additional federal tax. You should also consider state income taxes, which vary by state.

When does a Roth conversion make sense?

A Roth conversion is most beneficial when your current tax rate is lower than your expected future tax rate. This commonly applies during years with unusually low income (job change, sabbatical, early retirement), after a major deduction year, or in the years between retirement and age 73 when RMDs begin — the so-called 'Roth conversion window.'

Is there a Roth conversion income limit?

No. Since 2010, there is no income limit on Roth conversions. Anyone can convert any amount from a traditional IRA or other pre-tax account to a Roth IRA, regardless of income. This is different from direct Roth IRA contributions, which phase out at $150,000 (single) and $236,000 (married) in 2026.

Roth Conversion Guide 2026 — When to Convert, How Much, and the Tax Cost

A Roth conversion moves money from a pre-tax retirement account — a traditional IRA, 401(k), SEP IRA, or SIMPLE IRA — into a Roth IRA. You pay income tax on the converted amount today, but all future growth is tax-free and qualified withdrawals in retirement are never taxed. In 2026, there is no income limit on Roth conversions.

Key takeaway: A Roth conversion makes the most financial sense when your current tax rate is lower than your expected future tax rate. The best time for most people is the window between retirement and age 73 (when required minimum distributions begin).

Why Convert to a Roth IRA?

	Traditional IRA / 401(k)	Roth IRA
Contributions	Pre-tax (deductible)	After-tax (non-deductible)
Growth	Tax-deferred	Tax-free
Withdrawals	Taxed as ordinary income	Tax-free (qualified)
RMDs	Required at age 73	No RMDs
Estate	Heirs pay income tax	Heirs pay no income tax

The core trade-off: You give up the tax deduction now (pay taxes on the conversion) to eliminate future taxes on growth and withdrawals.

When a Roth Conversion Makes Sense

Low-Income Years

Convert when your taxable income temporarily drops:

Year of job loss or career change
Sabbatical or parental leave
Business loss year
Early retirement before Social Security begins

Example: You normally earn $120,000 (22% bracket). You take a year off and earn only $40,000. Converting $30,000 fills your tax bracket to the top of the 12% bracket ($47,150 for single), paying only 12% tax instead of your normal 22%. That’s a significant long-term savings.

The Roth Conversion Window (Ages 59–73)

Many retirees have their lowest income years between retirement and when Social Security, pensions, and required minimum distributions (RMDs) begin. This “Roth conversion window” is ideal for conversions:

Social Security not yet claimed → lower income
No RMDs yet (RMDs start at age 73)
401(k) and IRA withdrawals are voluntary — convert strategically to stay in lower brackets

Expected Higher Taxes in Retirement

Convert now if you believe:

Future tax rates will rise (possible given US deficit levels)
Your portfolio will grow substantially, creating large future RMDs
You’ll inherit additional retirement accounts
You have a pension plus Social Security that will create high retirement income

Estate Planning

Roth IRAs have no RMDs during the original owner’s lifetime. Converted Roth funds can grow tax-free for decades and pass to heirs who then receive tax-free withdrawals (within 10 years under the SECURE 2.0 rules).

How to Calculate the Tax Cost of a Roth Conversion

Step 1: Determine your current taxable income

Start with your total income, subtract the standard deduction ($15,000 single / $30,000 MFJ in 2026), and find where you currently fall in the tax brackets.

Step 2: Find your conversion capacity

Calculate how much you can convert before hitting the next tax bracket.

2026 Federal Tax Brackets (single filer):

Taxable Income	Rate
$0 – $11,925	10%
$11,926 – $48,475	12%
$48,476 – $103,350	22%
$103,351 – $197,300	24%
$197,301 – $250,525	32%
$250,526 – $626,350	35%
Over $626,350	37%

Example:

Single filer, age 65, retired
Social Security: $18,000/year (85% taxable = $15,300)
Pension: $12,000/year
Current taxable income: $27,300 − $15,000 standard deduction = $12,300
You’re in the 12% bracket with room up to $48,475
You can convert up to $36,175 ($48,475 − $12,300) and stay in the 12% bracket

Step 3: Calculate the tax owed

Amount converted × your marginal rate = approximate additional tax

Note: Large conversions can trigger additional consequences:

Medicare IRMAA surcharges (if income pushes past thresholds) — two years later
Social Security benefit taxation (if combined income > $25,000 single / $32,000 MFJ)
Premium Tax Credit phaseout (if on ACA marketplace coverage)

How to Execute a Roth Conversion

Contact your IRA or 401(k) custodian — request a Roth conversion (also called a Roth rollover or in-plan Roth conversion for 401(k))
Choose the amount — you can convert any amount, not the full balance
Tax withholding decision — do NOT have taxes withheld from the conversion; pay from a separate taxable account instead (withholding reduces the converted amount and may trigger early withdrawal penalties)
Pay estimated taxes — make a quarterly estimated tax payment for the year of conversion to avoid an underpayment penalty
File Form 8606 — report the conversion on your tax return; no separate form needed if converting a traditional IRA directly within the same custodian

The 5-Year Rule for Conversions

Each Roth conversion has its own 5-year clock:

Converted amounts can be withdrawn tax-free after 5 years (principal only — earnings have a separate 5-year rule from the account’s first contribution)
If you withdraw converted principal within 5 years AND before age 59½, you’ll owe a 10% early withdrawal penalty (not income tax — you already paid that)
After age 59½: No 5-year rule applies to conversions; you can withdraw anytime

Partial Conversions: The Smart Strategy

Rather than converting your entire traditional IRA at once, most advisors recommend annual partial conversions to:

Stay in a lower tax bracket each year
Avoid triggering Medicare IRMAA surcharges
Spread the tax cost over multiple years
Maintain flexibility if circumstances change

Long-term conversion plan example:

Traditional IRA balance: $400,000 at age 62
Goal: Convert before RMDs begin at 73
Annual conversion target: $25,000/year
At 11 years × $25,000 = $275,000 converted + continued growth remaining
Result: Dramatically lower future RMDs

IRA Complete Guide — all IRA topics
Backdoor Roth IRA — for high earners above income limits
Traditional IRA vs Roth IRA — which to choose
RMD Strategies — how Roth conversions reduce future RMDs

Written by WealthVieu

WealthVieu researches and writes data-driven personal finance guides using primary sources including the IRS, Bureau of Labor Statistics, Federal Reserve, and Census Bureau.

The content on Wealthvieu is for informational purposes only and should not be considered financial, tax, or investment advice. Consult a qualified professional before making financial decisions. Full disclaimer · Editorial policy