What Is a Roth Conversion?
A Roth conversion is when you move money from a traditional IRA (or 401k) to a Roth IRA. The converted amount is taxed as ordinary income in the year you convert, but after that, the money grows and can be withdrawn completely tax-free.
Think of it like paying your taxes early at a known rate, rather than waiting and potentially paying at a higher rate later.
Why Seniors Consider Roth Conversions
There are several compelling reasons:
- No RMDs on Roth IRAs: Unlike traditional IRAs, Roth IRAs have no Required Minimum Distributions for the original owner
- Tax-free income in retirement: Roth withdrawals do not count toward your taxable income
- Lower taxes for your heirs: Beneficiaries inherit the Roth IRA tax-free
- Hedge against future tax increases: If tax rates rise, your Roth money is protected
The 5 Biggest Roth Conversion Tax Traps
Trap 1: Converting Too Much in One Year
This is the most common and costly mistake. Converting a large amount pushes your taxable income into higher tax brackets.
Example: John has $600,000 in his traditional IRA. He converts the entire amount in one year. Combined with his $30,000 Social Security and $20,000 pension, his taxable income for the year is $650,000 — putting him in the 37% tax bracket.
If John had spread the conversion over 6 years ($100,000 per year), he could have stayed in the 22-24% bracket, saving over $80,000 in taxes.
The fix: Work with a tax professional to calculate the optimal annual conversion amount that fills up your current tax bracket without spilling into the next one.
Trap 2: Triggering Medicare IRMAA Surcharges
Medicare uses your income from two years ago to determine your premiums. A large Roth conversion in 2026 could increase your Medicare Part B and Part D premiums in 2028.
The surcharges can add $74 to $443 per month per person to your Part B premium alone. For a married couple, that is up to $10,632 extra per year.
The fix: Factor IRMAA brackets into your conversion planning. Stay just below the IRMAA threshold, or plan conversions for years before you turn 63 (since IRMAA uses the two-year lookback).
See our Medicare IRMAA 2026 guide for current income brackets.
Trap 3: Making Social Security Taxable
Up to 85% of your Social Security benefits can be taxed if your "combined income" exceeds $34,000 (individual) or $44,000 (married filing jointly). A Roth conversion increases your combined income for that year.
Example: Sarah receives $24,000 in Social Security. Her other income is $10,000. Combined income: $34,000 — right at the threshold. A $50,000 Roth conversion pushes her combined income to $84,000, causing 85% of her Social Security to be taxed.
The extra tax on Social Security: approximately $5,100 she would not have owed without the conversion.
The fix: Include Social Security taxation in your conversion calculations. The optimal conversion amount may be smaller than you think.
Trap 4: Not Having Cash to Pay the Tax Bill
When you convert, you owe income tax on the converted amount. If you pay the tax using money from the conversion itself, you lose that money's future tax-free growth.
Example: Converting $100,000 and using $22,000 from the conversion to pay taxes means only $78,000 goes into the Roth. That $22,000 could have grown to $44,000+ over 15 years tax-free.
The fix: Pay the tax bill from a separate taxable account, not from the converted funds. If you cannot afford the tax bill without touching the conversion, you are probably converting too much.
Trap 5: Converting After Age 73 When RMDs Are Due
You cannot convert your RMD itself into a Roth IRA. You must take your RMD first, then convert additional amounts.
Example: Your RMD is $25,000 and you want to convert $50,000 to Roth. You must first withdraw the $25,000 RMD (and pay tax on it), then convert an additional $50,000 (and pay tax on that too). Your total taxable income from retirement accounts that year: $75,000.
The fix: Ideally, do your Roth conversions in the years between retirement and age 73, when your income may be lower and before RMDs begin.
The Ideal Roth Conversion Window
The best time for Roth conversions is typically:
- After retirement (income is lower)
- Before age 73 (before RMDs begin)
- Before Social Security (if you delay claiming)
- During low-income years (if you have gap years)
This window — often between ages 62 and 72 — is sometimes called the "Roth conversion sweet spot."
How to Calculate Your Optimal Conversion Amount
A simplified approach:
- Estimate your other income for the year (Social Security, pensions, part-time work)
- Find the top of your current tax bracket
- The difference is your conversion "room"
Example: You are in the 22% bracket (up to $100,525 for single filers in 2026). Your other income is $45,000. You can convert up to $55,525 and stay in the 22% bracket.
Always consult a tax professional for personalized calculations — the interaction between conversion income, Social Security taxation, IRMAA, and state taxes is complex.
This article was last updated on March 31, 2026. Tax rules and brackets change annually. Consult a qualified tax professional before making Roth conversion decisions. See our financial disclaimer.