Three Questions to Consider Before Converting to a Roth in 2026

Key Points

• A Roth conversion moves money from a traditional IRA or 401(k) into a Roth IRA.

• These conversions can provide tax-free growth and withdrawals while helping you avoid RMDs.

• Because a Roth conversion can create tax consequences, it is important to be sure it fits your situation.

If your traditional IRA or 401(k) balance keeps climbing, you may face a pleasant but complicated issue. Eventually, you may have to take required minimum distributions, or RMDs, which can increase your retirement tax bill and potentially raise your Medicare premiums. A Roth conversion may help address that problem.

When you do a Roth conversion, you transfer money from a traditional IRA or 401(k) into a Roth IRA. After that, the assets can grow tax-free, withdrawals can be tax-free, and RMDs are no longer a concern.

Still, a Roth conversion is not the best move for everyone. If you are considering one, it helps to work through these three questions first.

1. What is my tax bracket right now?

Your current tax bracket should be a major factor in the decision. If your bracket is already high, a Roth conversion may not be worth it.

For example, if you are in the 32% bracket, every $1 you convert to a Roth IRA creates a $0.32 tax bill. Converting $100,000 could mean owing $32,000 in taxes, which may make the move less attractive.

2. What tax bracket do I expect in retirement?

You should look beyond your current bracket and think about where you may land later in life.

If you expect to be in a lower bracket in retirement than you are now, a Roth conversion may not produce a benefit. In the example above, converting at 32% now but facing only a 24% bracket in retirement would mean paying the IRS more than necessary on those savings.

The calculation is not quite that simple, though, because tax-free retirement income has other advantages. Tax-free withdrawals can help keep Medicare premiums lower and may also reduce the chance that your Social Security benefits are taxed.

Even so, comparing your present bracket with your likely future bracket is an important step. Some people could even end up in a higher bracket in retirement because of the savings they have built. There is no guarantee you will be taxed less later, so it is worth evaluating your own finances carefully.

3. How much do I plan to give to charity?

If charitable giving is a major part of your retirement plan, a Roth conversion may not be the most efficient choice. Qualified charitable distributions let you send money directly to charities, which can satisfy RMDs without triggering taxes.

It does not make much sense to pay taxes on a Roth conversion if you expect to give most of that money away anyway. In that case, you would be paying tax now rather than waiting to give the money without increasing your tax bill.

Roth conversions can be a smart strategy, but only if they fit your goals. Make sure the move makes sense for you before you proceed.