Calculate whether a Roth IRA conversion makes sense for your situation. See the tax cost, break-even point, and lifetime tax savings. 2026 IRS brackets included. Free US calculator.
Roth Conversion Strategy in 2026
A Roth conversion moves money from a pre-tax traditional IRA or 401(k) to a Roth account, triggering taxes now in exchange for tax-free growth and withdrawals forever. The fundamental question: will your tax rate be higher now or in retirement?
The RMD Problem
Required Minimum Distributions (RMDs) begin at age 73 under SECURE 2.0. If you have $1,200,000 in traditional IRAs at 73, your RMD is roughly $43,000 in Year 1 — whether you need the money or not. At $2,000,000, it’s $72,000. These RMDs layer on top of Social Security, potentially pushing you into higher brackets and triggering Medicare IRMAA surcharges ($600–$5,000+/year in extra premium). Strategic conversions in your 60s and early 70s can reduce the RMD bomb before it detonates.
The Break-Even Calculation
Break-even = years for tax-free Roth growth to offset upfront conversion taxes. On a $50,000 conversion at 22% ($11,000 in taxes paid today), at 7% annual return: the Roth advantage grows approximately $3,500/year vs a taxable account. Break-even is roughly 3 years. On a 20–30 year retirement, the Roth wins substantially.
See your full retirement projection — traditional vs Roth — in our Retirement Calculator.
Frequently Asked Questions
A Roth conversion makes sense when your current tax rate is lower than your expected rate in retirement. Key scenarios where it works: (1) Low-income year — job loss, sabbatical, business loss; (2) Early retirement before Social Security and RMDs kick in (ages 60–72); (3) Large traditional IRA that will force large RMDs later; (4) Expecting tax rates to rise (likely given current federal debt levels). It makes less sense if you're in your peak earning years and the conversion bumps you into a higher bracket.
The converted amount is added to your ordinary income for the year. Converting $50,000 at the 22% bracket costs $11,000 in additional federal taxes (plus state income tax where applicable). The key: pay the conversion taxes from non-IRA funds, not from the converted amount. If you convert $50,000 and pay the $11,000 from the IRA itself, you effectively converted only $39,000 while paying taxes on $50,000 — a losing proposition. Always use outside savings to cover conversion taxes.
Each Roth conversion has its own 5-year clock before you can withdraw the converted principal penalty-free (before age 59½). Roth contribution earnings have a separate 5-year clock from your first Roth contribution ever. Practically: if you convert at 56, the converted funds must stay for 5 years (until 61) before withdrawal — but at 59½, the 10% early withdrawal penalty doesn't apply anyway, making the 5-year rule most relevant only if you're under 54 and plan to access converted funds before 59½.
Yes — the Roth conversion ladder is the standard FIRE strategy for accessing traditional 401(k) funds before age 59½ without the 10% penalty. The process: in Year 1 of early retirement, convert Year 6's living expenses from traditional IRA to Roth. Repeat each year. In Year 6, withdraw Year 1's conversion tax-free (the 5-year clock has run). You need to fund the first 5 years from taxable accounts or Roth contributions. At low post-retirement income, conversions happen at 0%–12% tax rates vs the 22%–32% they'd face as RMDs.
In 2026, Roth IRA contributions phase out at $150,000–$165,000 MAGI for single filers and $236,000–$246,000 for married filing jointly. Above those limits, direct Roth contributions aren't allowed — but Roth conversions have no income limit (the 'backdoor Roth' strategy). A backdoor Roth: contribute $7,500 to a traditional IRA (non-deductible), then immediately convert to Roth. No income taxes owed since you contributed after-tax funds. Works cleanly if you have no other traditional IRA balances (the pro-rata rule can complicate it otherwise).
