Should I Do a Roth Conversion? 5 Questions to Decide
Not sure if a Roth conversion is right for you? Answer these 5 simple questions to find out. A clear decision framework for beginners.
A Roth conversion moves money from a traditional IRA or 401(k) into a Roth IRA. You pay taxes now, but the money grows tax-free forever.
The big question: Is it worth paying those taxes today?
Answer these 5 questions to find out.
The Basic Trade-Off
| Traditional IRA | Roth IRA |
|---|---|
| Tax-deferred now | Pay taxes now |
| Taxed when you withdraw | Tax-free withdrawals |
| Required distributions at 73 | No required distributions ever |
| Taxable inheritance for heirs | Tax-free inheritance |
Did You Know?
Think of it like this: with a traditional IRA, you're partnered with the IRS—they get a cut of every withdrawal. With a Roth, you buy them out upfront and keep everything after.
The 5 Questions
1. Is your tax rate lower now than it will be in retirement?
This is the core question. If you're paying less in taxes today than you expect to pay later, converting now locks in the lower rate.
| Your Situation | Conversion Makes Sense? |
|---|---|
| Retired, not yet collecting Social Security | Often yes — low income years |
| Between jobs or on sabbatical | Often yes — temporarily low bracket |
| Peak earning years | Usually no — wait for lower bracket |
| Retired with pension + Social Security | Depends — run the numbers |
The math: If you're in the 12% bracket now but expect to be in 22% later, converting saves 10 cents on every dollar.
You can find your current bracket on IRS Tax Rate Schedules.
2. Can you pay the taxes WITHOUT touching retirement funds?
This is critical. You need to pay the conversion tax bill from a checking account, savings, or taxable investments—not from the IRA itself.
| Payment Source | Good Idea? |
|---|---|
| Checking/savings account | Yes |
| Taxable brokerage account | Yes |
| The IRA being converted | No — defeats the purpose |
Why it matters: If you convert $50,000 and use $11,000 from the IRA to pay taxes, you've only actually converted $39,000. Plus, if you're under 59½, you'll owe a 10% early withdrawal penalty on that $11,000.
Did You Know?
Set aside the tax money first. If you can't afford the tax bill without touching retirement funds, you probably shouldn't convert—or convert a smaller amount.
3. Do you have at least 5 years before you need this money?
Roth conversions come with a 5-year waiting period. Each conversion starts its own 5-year clock. You can't withdraw the converted amount penalty-free until 5 years have passed.
| Time Horizon | Conversion Makes Sense? |
|---|---|
| Less than 5 years | Probably not |
| 5-10 years | Yes, if other factors align |
| 10+ years | Strong candidate |
The longer the better: More time means more tax-free growth. A conversion at age 55 has 30+ years to compound tax-free.
4. Are you worried about future tax rates going up?
Nobody knows where tax rates will be in 20 years. But consider:
| Factor | What It Suggests |
|---|---|
| Current rates are historically low | Rates may rise |
| National debt is $34+ trillion | Rates may rise |
| Your personal income may increase | Your rate may rise |
Converting now is like buying insurance against higher future rates. Even if rates stay the same, you haven't lost anything.
Did You Know?
The Tax Cuts and Jobs Act provisions are scheduled to expire after 2025. Converting now locks in today's rates regardless of what Congress does later.
5. Do you want to leave tax-free money to your heirs?
If passing wealth to the next generation matters to you, Roth accounts have two big advantages:
| Benefit | Why It Matters |
|---|---|
| No required distributions for you | Money keeps growing, nothing forced out |
| Tax-free inheritance | Heirs pay zero tax on withdrawals |
Under the SECURE Act, most non-spouse heirs must withdraw inherited IRA funds within 10 years. With a traditional IRA, they pay taxes on every dollar. With a Roth? They withdraw tax-free.
Quick Decision Guide
| If This Describes You... | Then... |
|---|---|
| Lower tax bracket now than expected in retirement | Convert |
| Can pay taxes from non-retirement funds | Convert |
| Have 5+ years before needing the money | Convert |
| Want tax-free money for heirs | Convert |
| In your peak earning years | Wait |
| Need the money soon | Wait |
| Can't afford the tax bill | Wait or convert less |
Most people who convert are glad they did. The peace of mind of tax-free retirement income—and knowing future tax changes can't touch your Roth—is worth a lot.
Next Steps
- Check your current tax bracket — Look at your last tax return or use the IRS tax tables
- Estimate your retirement tax bracket — Consider Social Security, pensions, and required minimum distributions
- Calculate how much you could convert — Stay within your current bracket if possible
- Set aside money for the tax bill — Don't use retirement funds
Want to know the best TIME to convert? Read our companion guide: Best and Worst Times for a Roth Conversion — covering Medicare considerations, early retirement strategies, and common timing mistakes.
Sources
- IRS — Roth IRAs
- IRS — Publication 590-B: Distributions from IRAs
- IRS — Form 8606: Nondeductible IRAs
- IRS — Tax on Early Distributions
- IRS — Federal Income Tax Rates and Brackets
Last updated: February 2026. Tax rules change. Verify current information at irs.gov.
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