3 Questions to Ask Yourself Before Doing a Roth Conversion in 2026

If your traditional IRA or 401(k) balance keeps growing, you may be headed toward a good but frustrating problem. Eventually, you'll be forced to take required minimum distributions (RMDs), which could drive up your taxes in retirement and potentially cost you more in Medicare premiums. But a Roth conversion could come to the rescue.

With a Roth conversion, you move funds from a traditional IRA or 401(k) into a Roth IRA. From there, your money gets to grow tax-free, withdrawals are tax-free, and you don't have to concern yourself with RMDs.

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But a Roth conversion isn't the right choice for everyone. If you're thinking of initiating a Roth conversion this year, make sure to run through these key questions first.

1. What's my tax bracket today?

Your tax bracket should play a big role in your Roth conversion decision. If your current one is high, a Roth conversion may not make sense.

Let's say you're a high earner in the 32% bracket. That means for every $1 you move to a Roth IRA, you'll owe $0.32. A $100,000 Roth conversion could cost you $32,000 in taxes, which makes it a less appealing prospect.

2. What's my expected tax bracket in retirement?

There's more to consider than just your current tax bracket before doing a Roth conversion. Also consider your future one.

If you expect to be in a lower tax bracket in retirement than you're in today, a Roth conversion may not pay off at all. Going back to our example, if you convert at 32% today but only end up in the 24% tax bracket in retirement, you'll have paid the IRS extra on your savings.

Of course, the total math isn't that simple because there are other factors to consider, like the benefits of having tax-free retirement income. Tax-free withdrawals could help keep your Medicare premiums down and potentially get you out of paying taxes on your Social Security benefits.

Still, the tax bracket question of now versus the future is an important one to answer. Some people may find themselves in a higher tax bracket in retirement due to accumulated savings. It's not a given that you'll always end up in a lower one, so think about your specific financial circumstances.

3. How charitable do I want to be?

If charitable giving is a big part of your retirement plan, a Roth conversion may not make sense. Qualified charitable distributions allow you to transfer funds to charities directly, thereby bypassing taxes while satisfying RMDs.

It doesn't pay to do a Roth conversion if you intend to donate most of the money to charity anyway. In that situation, you're paying taxes instead of waiting to unload that money without an increase in your tax bill.

Roth conversions can be a strategic move. Just make sure a Roth conversion is right for you before taking the plunge.

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