Roth Conversions: When Paying Taxes Today May Save Money Tomorrow
A thoughtful conversion strategy can improve tax flexibility—but the right answer depends on your full financial picture.
A Roth conversion moves assets from a traditional, generally tax-deferred retirement account into a Roth IRA. The amount
converted is generally included in taxable income that year, while qualified Roth withdrawals later may be tax-free. The
trade-off is straightforward: pay some tax now in exchange for potentially less tax later. Yet a conversion is not automatically
a tax-saving decision.¹
Why timing—and your tax bracket—matter
A conversion may be attractive in a year with unusually low taxable income: after leaving work but before Social Security,
pensions, or required minimum distributions (RMDs) begin. Instead of converting an entire account at once, a household
might spread conversions over several tax years to manage marginal brackets. For 2026, married couples filing jointly enter
the 24% federal bracket above $211,400 of taxable income; the 22% bracket extends from $100,800 through $211,400.²
These are taxable-income thresholds, not gross-income limits, and state taxes or other tax interactions can change the
result.
Consider a hypothetical couple with $160,000 in taxable income before a conversion. A $40,000 conversion, assuming the
full amount is taxable and other factors are unchanged, would keep their taxable income within the 22% federal bracket. It
could generate roughly $8,800 of additional federal income tax. Whether this is worthwhile depends on future tax rates, the
source of money used to pay the tax, and the household’s goals. This is a simplified illustration—not a recommendation.
RMDs: Potentially less taxable income later
Traditional IRAs generally require withdrawals starting at age 73 or 75, depending on birth year and applicable rules;
original Roth IRA owners do not have lifetime RMDs.³ Conversions may reduce the balance that will eventually be subject to
traditional IRA RMDs. This can provide more control over the timing of taxable income in retirement. An RMD itself cannot
be converted: the year’s required distribution must be satisfied separately before eligible amounts are converted.¹
Medicare surcharges: The often-overlooked cost
A larger conversion can increase Medicare premiums through the income-related monthly adjustment amount (IRMAA).
Medicare generally uses tax information from two years earlier to determine these surcharges. In 2026, married couples
filing jointly with modified adjusted gross income above $218,000 are subject to higher Part B and Part D premiums; the
standard 2026 Part B premium is $202.90 per person per month.⁴ A conversion near an IRMAA threshold merits careful
modeling, particularly when both spouses are on Medicare.
The inheritance and legacy perspective
For families who hope to leave assets to children or other heirs, Roth accounts can have estate-planning advantages. Many
nonspouse beneficiaries must fully distribute inherited IRAs within ten years, although exceptions apply. Traditional IRA
distributions are generally taxable to heirs; qualified inherited Roth IRA distributions are generally income-tax-free. An
inherited Roth is not usually exempt from beneficiary distribution requirements.⁵
A conversion can therefore represent a decision to shoulder income taxes during your lifetime rather than leave that tax
burden to heirs. But it is not always the best legacy strategy: heirs’ future brackets, charitable beneficiaries, and the tax cost
of the conversion all matter. Individuals with substantial charitable goals should also compare conversions with qualified
charitable distributions, generally available beginning at age 70½.⁶
When a Roth conversion may not make sense
A conversion deserves extra scrutiny if it pushes income into a substantially higher bracket, increases Medicare costs,
reduces eligibility for income-based benefits or deductions, or requires selling investments to pay the tax. It may also be less
beneficial when retirement tax rates are expected to be lower, the time horizon is short, or charitable giving is a major
objective. Once completed, a conversion from a traditional IRA to a Roth IRA generally cannot be undone by
recharacterizing it.¹
A plan before a transaction
The most useful question is not simply, “Should I convert?” It is, “How much, in which years, and for what purpose?” A
comprehensive financial plan can compare conversion and no-conversion scenarios alongside projected income, tax
brackets, RMDs, Medicare costs, investment withdrawals, charitable giving, and inheritance goals. Consider working with a
qualified wealth advisor and tax professional to evaluate a coordinated, multi-year strategy—one designed to help your
wealth support both financial security and lasting significance.
SOURCES & FOOTNOTES
1. IRS, Publication 590-A/590-B and Publication 17 (IRA conversions, taxation, RMD exclusions and conversion reversals):
https://www.irs.gov/publications/p590a ; https://www.irs.gov/publications/p590b
2. IRS, 2026 federal income-tax brackets: https://www.irs.gov/newsroom/working-families-tax-cuts-individuals-and-workers
3. IRS, Retirement Plan and IRA RMD FAQs; 2026 guidance on applicable RMD ages: https://www.irs.gov/retirement-plans/retirement-plan-and-ira-required-
minimum-distributions-faqs
4. Centers for Medicare & Medicaid Services, 2026 Part B and IRMAA amounts; Social Security Administration, MAGI lookback:
https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles ; https://secure.ssa.gov/poms.nsf/lnx/0601101010
5. IRS, Retirement Topics—Beneficiary (inherited Roth treatment and ten-year rule): https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-
topics-beneficiary
6. IRS, Publication 590-B (qualified charitable distributions): https://www.irs.gov/publications/p590b
Educational information only; not individualized investment, tax, or legal advice. Tax laws, limits, and personal circumstances can change. Investment advisory
services offered through Patron Partners, LLC, an SEC-registered investment adviser. Registration does not imply a particular level of skill or training.