Roth Conversions
A Roth conversion moves money from a traditional (pre-tax) account to a Roth (after-tax) account. You pay income tax on the amount now, but it grows and is withdrawn tax-free forever after.
How it works
Move money from Traditional → Roth
You convert some or all of a traditional IRA or 401(k) into a Roth IRA. There's no limit on how much you can convert.
Pay income tax on the converted amount
The conversion amount is added to your taxable income for the year. If you convert $50,000, that's $50,000 of additional ordinary income.
Money grows and comes out tax-free
Once in a Roth, the money grows tax-free and qualified withdrawals (after age 59½ and 5 years) owe no federal tax. Roth accounts also have no RMDs.
When conversions make sense
Low-income years between retirement and Social Security
If you retire at 55 and don't claim SS until 67, you may have 12 years in a very low tax bracket. Converting during these years lets you "fill up" the 10% and 12% brackets instead of paying 22-24% later.
Before RMDs force large withdrawals
At 73+, Required Minimum Distributions can push you into high brackets and trigger IRMAA surcharges. Converting before RMDs reduces the traditional balance that forces those withdrawals.
If you expect higher tax rates in the future
Whether from legislation (e.g. TCJA expiration), growing RMDs or a surviving spouse filing as single, if your future marginal rate will be higher, paying now saves money.
When conversions may not make sense
You're already in a high bracket
Converting while you're earning peak income means paying 32-37% on the conversion. That rarely beats the tax you'd pay in retirement.
You need the money to pay the tax
If you have to dip into the converted funds to cover the tax bill, you lose the benefit. Ideally, pay the tax from outside funds (savings, brokerage).
It triggers IRMAA or ACA subsidy loss
Large conversions can bump your MAGI, triggering Medicare surcharges or losing ACA health insurance subsidies. This adds hidden cost to the conversion.
How much to convert
The optimal conversion amount depends on your current income, expected future income and the tax brackets. A common approach:
"Fill the bracket" strategy
Each year, convert just enough to fill up your current tax bracket without spilling into the next one. For example, if you're in the 12% bracket with $20,000 of room, convert $20,000. Repeat each year during your low-income window.
Find your conversion window
RetireNumber projects your tax brackets year by year and identifies windows where Roth conversions save the most. See how conversions affect your RMDs, lifetime tax bill and IRMAA exposure, all in one view.
Model Roth conversionsRoth conversions are irrevocable and have tax consequences. This page provides general education, consult a tax professional for advice specific to your situation.