This article reflects federal rules as of June 2026 and covers tax years 2025 and 2026. State rules vary and are summarized separately below. Tax law changes — confirm current figures with the IRS or a licensed professional before you act.
Quick Answer
The best time to do a Roth conversion is in a low-income year — usually after you retire but before Social Security and Required Minimum Distributions start, or in any year your taxable income drops. You convert just enough to “fill up” a low tax bracket without spilling into a higher one or triggering Medicare surcharges.
A Roth conversion means you move money from a pre-tax traditional IRA or 401(k) into a Roth account, and you pay ordinary income tax on the amount you move that year. You do it now to lock in a known tax rate, so that all future growth and withdrawals come out tax-free, and so your heirs inherit a tax-free account. The catch is timing: convert in the wrong year and you can push yourself into a higher bracket, raise your Medicare premiums two years later, and make more of your Social Security taxable — all at once.
Roughly 4.8 million Roth conversions were reported on individual returns in a recent IRS data year, and the number keeps climbing as more savers try to get ahead of future tax-rate uncertainty. The decision is rarely all-or-nothing — it is about how much to convert and which year to do it.
Here is what you will learn:
- 🎯 The exact “sweet spot” years when a conversion saves the most tax
- 🧮 Fully worked dollar examples showing how to fill a tax bracket without overflowing
- 🏥 How conversions can spike your Medicare (IRMAA) premiums two years later — and how to avoid it
- ⏳ The two five-year rules that decide whether your withdrawals are penalty-free
- 🧾 The Form 8606 paperwork, the December 31 deadline, and the seven mistakes that cost people the most
What a Roth Conversion Actually Is
A Roth conversion is the act of moving money from a pre-tax retirement account into a Roth account, and paying income tax on the converted amount in the year you do it. The pre-tax side is usually a traditional IRA, a SEP IRA, a SIMPLE IRA, or an old 401(k). The Roth side is a Roth IRA, where money grows tax-free and qualified withdrawals come out tax-free for life.
The reason people do this is simple: they are betting that paying tax now, at a known rate, beats paying tax later, at an unknown and possibly higher rate. When you convert, the dollars you move get added to your taxable income for that year. So a $50,000 conversion is treated much like earning an extra $50,000 of wages — it is taxed at your ordinary income rates, not at lower capital-gains rates.
The consequence of getting the amount wrong is real money. Convert too much and the top slice of your conversion can jump from the 12% bracket into the 22% bracket, or push your income past a Medicare surcharge cliff. A common misconception is that a conversion is “free” because you are just moving your own money — but the tax bill is due that April, and it is not refundable.
What you should do about it: treat every conversion as a deliberate, sized decision. Decide your target taxable income for the year first, then convert only the gap between your current income and that ceiling.
Conversion vs. Contribution — Don’t Confuse Them
A Roth contribution is new money you add from your paycheck or savings, capped at $7,000 for 2025 and $7,500 for 2026 (plus a catch-up of $1,000 in 2025 or $1,100 in 2026 if you are 50 or older). A Roth conversion is existing pre-tax money you move over, and it has no dollar limit — you can convert $10,000 or $1 million in a single year.
This distinction matters because high earners are barred from contributing to a Roth directly once their income passes the IRS limits, but anyone at any income can convert. The consequence of mixing these up is that people assume they “make too much” to use a Roth at all, when in fact the conversion door is always open. Your next step: if your income blocks direct contributions, learn the “backdoor” route covered later in this guide.
Why Timing Is Everything
The whole value of a Roth conversion hinges on the tax rate you pay to do it. A conversion done at a 12% rate is a bargain; the same conversion done at 32% may never pay off. So the question is never just “should I convert?” — it is “in which year is my rate lowest?”
Your income is rarely flat across your life. It tends to peak during your working years, dip sharply in early retirement, and then climb again once Social Security and Required Minimum Distributions (RMDs) kick in. According to EP Wealth, the sweet spot for conversions is after retirement and before you file for Social Security — a window when your income is unusually low and you can convert at bargain rates.
The consequence of ignoring timing is that you either pay too much tax (converting in a high-income year) or you miss the window entirely (waiting until RMDs force your income up). A misconception is that you must convert everything at once. You do not — most smart plans convert a slice each year for several years, a strategy called “partial conversions” or a “conversion ladder.” What to do: map your expected income year by year from now until age 73, then target conversions to the lowest-income years.
The “Gap Years” Between Retirement and RMDs
The years between when you stop working and when RMDs begin (now age 73 for most people, rising to 75 for those born in 1960 or later) are often the single best time to convert. As Greenbush Financial explains, this window combines low taxable income with room to fill the lower brackets before RMDs force money out.
If you wait until RMDs start, those forced withdrawals stack on top of any conversion, pushing you into higher brackets and Medicare tiers. The consequence is a permanently higher tax floor for the rest of your life. The fix: convert aggressively but precisely during the gap years, shrinking your future traditional balance so your eventual RMDs are smaller.
Which Situation Applies to You?
Roth conversions are never one-size-fits-all. Find the row that fits your life right now, then read the worked example that matches it.
- You just retired and haven’t claimed Social Security yet: You are in the prime “gap year” window. Focus on the bracket-filling example below.
- You are still working and earning a high salary: A conversion now likely costs too much in tax. Wait, unless you are using the backdoor Roth strategy.
- You are on Medicare (65+) or within two years of it: Watch the IRMAA section closely — a conversion today raises your premiums two years from now.
- You are under 59½: You can convert, but never pay the tax bill from the converted funds, and mind the five-year rule below.
- You have a large traditional IRA and want to protect heirs: Conversions during your lifetime hand your heirs a tax-free account and dodge the 10-year drain-down tax bomb.
- You had an unusually low-income year (job loss, sabbatical, business loss): This is a hidden conversion opportunity even if you are not retired.
How to Size a Conversion: Fill the Bracket
The core technique is “bracket filling.” You find the top of a tax bracket, subtract your existing taxable income, and convert only that difference. This way every converted dollar is taxed at the lower rate, and none spills into the next bracket up.
Here are the 2026 federal brackets you will aim at, for married filing jointly: the 10% bracket runs up to $24,800, the 12% bracket up to $100,800, the 22% bracket up to $211,400, and the 24% bracket up to $402,500. The 2026 standard deduction is $32,200 for joint filers and $16,100 for singles, which shields the first slice of income before any bracket applies.
Worked Example 1 — Filling the 12% Bracket
Meet Dave and Carol, both 65, retired, married filing jointly in 2026. They have not started Social Security yet. Their only taxable income this year is $30,000 from a small pension and some interest.
Step 1: The top of the 12% bracket for a couple is $100,800 of taxable income in 2026.
Step 2: Their taxable income before any conversion is $30,000.
Step 3: The room left in the 12% bracket is $100,800 − $30,000 = $70,800.
Step 4: They convert $70,800 from Dave’s traditional IRA to his Roth IRA.
Step 5: That conversion is taxed mostly at 12%, costing roughly $8,496 in federal tax (12% × $70,800). Every one of those dollars now grows tax-free forever. If they had instead waited and converted the same amount during an RMD year in the 22% bracket, the bill would be about $15,576 — nearly $7,080 more.
The IRMAA Trap: Medicare Premiums Two Years Later
If you are 63 or older, a conversion can quietly raise your Medicare premiums. The Income-Related Monthly Adjustment Amount, or IRMAA, is a surcharge added to your Medicare Part B and Part D premiums when your income climbs above set thresholds. The brutal part: it uses your income from two years prior, so a 2026 conversion can spike your 2028 premiums.
For 2026, IRMAA surcharges begin once MAGI passes $109,000 for single filers or $218,000 for joint filers, and they climb through five tiers up to a top surcharge of $6,936 per person. This is a cliff, not a slope — being just $1 over a threshold triggers the full surcharge for both spouses.
| 2026 IRMAA Tier (Joint MAGI) | Annual Surcharge Per Person |
|---|---|
| Up to $218,000 — no surcharge | $0 |
| $218,001 to $274,000 | $1,148 |
| $274,001 to $342,000 | $2,886 |
| $342,001 to $410,000 | $4,620 |
| $410,001 to $749,999 | $6,355 |
| $750,000 or more | $6,936 |
Worked Example 2 — The IRMAA Cliff
Susan, a single 66-year-old retiree, has $100,000 of income in 2026 and wants to convert $20,000. That would put her MAGI at $120,000 — over the $109,000 single threshold. The consequence: in 2028, she pays a Tier 1 surcharge of about $1,148 on top of her normal premium. Her fix is to convert only $8,999, keeping her MAGI at $108,999 and dodging the cliff entirely.
The Five-Year Rules
Roth accounts carry two separate five-year clocks, and confusing them is a costly mistake. Both are explained by Schwab and Fidelity.
Rule One — The Conversion Clock
Each conversion has its own five-year clock for the purpose of avoiding the 10% early-withdrawal penalty on the converted amount. If you are under 59½ and you withdraw converted dollars within five years of converting them, you owe a 10% penalty on that money. The consequence is paying a penalty you could have avoided by simply waiting. The fix: never convert money you will need within five years, and never tap a recent conversion before age 59½.
Rule Two — The Earnings Clock
A second clock governs whether the growth in your Roth comes out tax-free. You must have had any Roth IRA open for at least five years, and be 59½ or older, for the earnings to be qualified. If you open your very first Roth at 60 and withdraw earnings at 63, those earnings are taxable because the account is only three years old. The fix: open and fund a Roth IRA — even with a tiny amount — as early as possible to start this clock ticking.
The Pro-Rata Rule and the Backdoor Roth
High earners who are blocked from direct Roth contributions often use a “backdoor Roth”: they make a nondeductible contribution to a traditional IRA, then convert it. But the pro-rata rule can wreck this if they hold other pre-tax IRA money.
The pro-rata rule says the IRS treats all your traditional, SEP, and SIMPLE IRAs as one pot when figuring how much of a conversion is taxable. You cannot cherry-pick and convert only the after-tax dollars. The taxable portion is figured as: (pre-tax balance ÷ total IRA balance) × amount converted.
Worked Example 3 — Pro-Rata Surprise
Raj has a $94,000 pre-tax traditional IRA and adds a $6,000 nondeductible contribution, making $100,000 total. He converts $6,000, expecting it to be tax-free. But because 94% of his IRA money is pre-tax, 94% of his conversion ($5,640) is taxable. The consequence is an unexpected tax bill. His fix: roll the $94,000 pre-tax balance into his employer 401(k) first, which removes it from the pro-rata math and lets the backdoor conversion come through nearly tax-free.
Conversion Scenarios at a Glance
These three common situations show the move and its result.
Scenario A — Early retiree, no Social Security yet
| The Move | What Happens |
|---|---|
| Convert to fill the 12% bracket each gap year | Locks in a low rate, shrinks future RMDs, no IRMAA hit if under thresholds |
Scenario B — Still working, high salary
| The Move | What Happens |
|---|---|
| Convert a large traditional IRA now | Stacks on top of wages, likely taxed at 24%–35%, rarely worth it |
Scenario C — Surviving spouse facing the “widow’s bracket”
| The Move | What Happens |
|---|---|
| Convert while still married filing jointly | Avoids the higher single-filer rates that hit after a spouse dies |
Named Example: The Widow’s Penalty
Margaret and Tom, both 70, file jointly with $90,000 of income in 2026, comfortably in the 12% bracket. They convert $10,000 a year. When Tom passes, Margaret files as a single taxpayer, where the 12% bracket ends at just $50,400 instead of $100,800. The same $90,000 of income now pushes her into the 22% bracket. By converting while both were alive, they shifted money into the Roth at 12% before the survivor’s higher single rates ever applied.
How to Do It: Forms, Deadlines, and Cost
A Roth conversion is reported on Form 8606, “Nondeductible IRAs,” filed with your Form 1040. Your IRA custodian sends you a Form 1099-R showing the distribution, and the conversion appears on Form 1040 lines 4a and 4b — line 4a shows the total moved, and line 4b shows the taxable part.
The hard deadline is December 31 of the tax year, not April 15. As AdvantaIRA confirms, a conversion that counts toward 2026 income must be completed by December 31, 2026. Many custodians need requests submitted by late November to process in time. The DIY cost is essentially $0 in fees (you only owe the income tax), while hiring a CPA or advisor to model a multi-year conversion plan typically runs a few hundred to a couple thousand dollars.
What to Do Next
- Estimate your taxable income for this year and the top of your target bracket.
- Use the bracket-filling math above to set your conversion amount.
- Check your MAGI against the IRMAA thresholds if you are 63 or older.
- Set aside cash outside your IRA to pay the tax bill — never withhold it from the conversion if you are under 59½.
- Submit your conversion request to your custodian by late November to beat the December 31 deadline.
- Keep your Form 1099-R and file Form 8606 with your return.
- Call a CPA or fee-only advisor if you hold pre-tax IRAs and want a backdoor Roth, or if a multi-year ladder is involved.
Mistakes to Avoid
- Converting too much in one year. The top slice spills into a higher bracket, raising your effective tax rate on the whole conversion.
- Paying the tax out of the converted funds. If you are under 59½, that withheld amount counts as an early withdrawal and triggers a 10% penalty.
- Ignoring the two-year IRMAA lookback. A conversion today can raise your Medicare premiums two years later by hundreds or thousands of dollars.
- Forgetting the pro-rata rule. Backdoor conversions get unexpectedly taxed when you hold other pre-tax IRA money.
- Missing the December 31 deadline. Unlike contributions, conversions cannot be done retroactively after year-end.
- Skipping Form 8606. Without it, the IRS may tax your basis twice, charging you on money you already paid tax on.
- Converting in a high-income working year. Paying 32% to convert often destroys the entire benefit.
Pros and Cons
Pros
- Tax-free growth forever, because qualified Roth withdrawals are never taxed.
- No RMDs on Roth IRAs, so the money can keep compounding untouched.
- Tax-free inheritance, since heirs withdraw from a Roth without owing income tax.
- Rate-lock protection, because you fix your tax cost today against future increases.
- Lower future Medicare and Social Security exposure, since a smaller traditional balance means smaller forced withdrawals later.
Cons
- An upfront tax bill, due in the year you convert, that can strain cash flow.
- IRMAA and Social Security spillover, which can raise costs beyond the income tax itself.
- No do-overs, because the rule allowing conversions to be undone was repealed.
- Five-year lockups, which can penalize early access to converted funds.
- Break-even risk, since the bet loses if your future tax rate ends up lower than today’s.
Do’s and Don’ts
Do
- Do convert in your lowest-income years, because the tax rate is what makes or breaks the math.
- Do pay the tax from outside funds, to keep the full amount growing tax-free.
- Do convert in slices over several years, smoothing the tax across multiple low brackets.
- Do check IRMAA and Social Security thresholds, since the real cost is more than the income tax alone.
- Do file Form 8606 every year you convert, to protect your basis from double taxation.
Don’t
- Don’t convert in a peak earning year, because high rates erase the benefit.
- Don’t convert money you’ll need within five years, to avoid penalties on the conversion.
- Don’t ignore your state’s tax treatment, since some states tax the conversion as income.
- Don’t blow past a bracket or IRMAA cliff by a few dollars, when trimming the amount avoids it.
- Don’t assume the backdoor Roth is tax-free, until you’ve cleared the pro-rata rule.
Federal vs. State Treatment
Federal law sets the core rules, but your state may tax the conversion too, and conformity varies widely. Start with the federal rule: the conversion is ordinary income on your federal return. Then ask, “Does my state tax this?”
Most states with an income tax treat a conversion as taxable income, just like the federal government does. But the answer is genuinely better in some places. States with no income tax — including Florida, Texas, Nevada, Washington, Wyoming, South Dakota, Alaska, and Tennessee — do not tax the conversion at all, which is why some retirees deliberately convert after relocating. The consequence of overlooking this is paying a state tax you could have legally avoided. The fix: confirm your state’s rule with its Department of Revenue before converting, and if a move is on your horizon, weigh converting after you establish residency in a no-tax state.
Frequently Asked Questions
Can I undo a Roth conversion if I change my mind?
No. The IRS eliminated “recharacterization” of conversions starting in 2018. Once you convert, it is permanent, and you owe the tax for that year. Size the conversion carefully before you pull the trigger.
Is there a limit on how much I can convert in a year?
No. Unlike contributions, conversions have no dollar cap. You can convert any amount, though large conversions push you into higher brackets and IRMAA tiers, so most people convert in measured slices.
How much tax will I pay on a Roth conversion?
Your ordinary income tax rate applies to the converted amount for that year. A $50,000 conversion taxed in the 22% bracket costs about $11,000 in federal tax, plus any state tax that applies.
When is the deadline to do a conversion for this year?
December 31 of the tax year. A conversion counting toward 2026 must be done by December 31, 2026 — there is no April extension as there is for contributions.
Will a Roth conversion raise my Medicare premiums?
Yes, possibly. IRMAA uses your income from two years prior, so a 2026 conversion can raise your 2028 Part B and Part D premiums if your MAGI crosses $109,000 single or $218,000 joint.
Can high earners do a Roth conversion?
Yes. There is no income limit on conversions. High earners blocked from direct Roth contributions often use a “backdoor Roth,” but must watch the pro-rata rule on existing pre-tax IRAs.
Should I pay the conversion tax from the IRA itself?
No, if you can avoid it. Paying from the IRA shrinks the amount that grows tax-free, and if you are under 59½, the withheld portion triggers a 10% early-withdrawal penalty.
Do conversions count toward my RMD?
No. You cannot convert your RMD. If you are subject to RMDs, you must take the full RMD first, and only amounts above it can be converted.
What is the five-year rule on conversions?
Each conversion starts a five-year clock. Withdraw converted funds before five years pass while under 59½, and you owe a 10% penalty on that amount. A separate clock governs tax-free earnings.
Does my state tax a Roth conversion?
Usually yes, in states with an income tax. States with no income tax — like Florida, Texas, and Nevada — do not tax it. Confirm with your state’s Department of Revenue.
Is a Roth conversion worth it if I’m in my 70s?
Often yes, especially for estate planning. Converting shrinks future RMDs and hands heirs a tax-free account, though you must take your RMD before converting any excess.
Word count: approximately 3,650. This article is educational and not a substitute for advice from a licensed CPA, tax attorney, or financial advisor for your specific situation.
Related reading
- Should I Convert IRA to Roth After Retirement? (w/Examples) + FAQs
- How Do You Avoid Taxes on a Roth Conversion? (w/Examples) + FAQs
- Lump-Sum vs. Multi-Year Roth Conversion: Which Wins? (w/Examples) + FAQs
- Should Married Couples Do a Roth Conversion in One Year? (w/Examples) + FAQs
- Should You Do a Roth Conversion Before Moving to a No-Tax State? (w/Examples) + FAQs
- Should You Do a Roth Conversion in a Low-Income Year? (w/Examples) + FAQs