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A Roth conversion moves money from a traditional IRA or 401(k) into a Roth IRA, triggering income tax on the converted amount now in exchange for tax-free growth and withdrawals later. It must be done by December 31 to count for 2026. Convert when your current tax rate is lower than the rate you expect in retirement, which makes 2026 a strong year if your income is unusually low, you are in the 12% bracket, or you have large traditional balances facing big future RMDs. Here is how to decide. For the full evergreen mechanics, see our Roth IRA conversion guide, and for the big picture, our retirement accounts hub.
- Convert when today’s tax rate is lower than the rate you expect in retirement.
- The deadline is December 31, 2026, with no April extension and no undo (recharacterization ended in 2018).
- Fill your current bracket without spilling into the next one, and pay the tax from outside funds.
- Watch IRMAA, ACA subsidies, and the 3.8% surtax, which large conversions can trigger.
When does a Roth conversion make sense?
It makes sense when your current tax rate on the converted amount is lower than what you expect to pay on that money in retirement. The clearest cases to convert in 2026:
- Your income is unusually low this year (job loss, sabbatical, business slowdown, early-retirement gap), putting you in a lower bracket than your long-term average. Early retirees often build a Roth conversion ladder around exactly these years.
- You are in the 12% bracket or lower. Converting up to the top of the 12% bracket (about $50,400 single, $100,800 married filing jointly in 2026) is often smart because 12% is historically low.
- You have large traditional IRA balances and expect high retirement income. Required Minimum Distributions can push retirees into higher brackets, so converting gradually at 22% now may beat being forced into 28% to 32% later.
- You expect tax rates to rise. The OBBBA made current rates permanent, but if you think rates climb later, converting locks in today’s.
How much should you convert?
The usual strategy is to fill your current bracket without pushing into the next. Figure out how much room you have before the next rate kicks in, and convert up to that amount.
Example: a married couple with $80,000 in taxable income. In 2026 the 22% bracket runs to about $211,400, so they have roughly $131,400 of room before hitting 24%. Converting up to that keeps all the conversion income at 22%; converting more spills into 24%.
The right amount also depends on:
- Medicare IRMAA surcharges. High income raises Medicare premiums, and if you are 63 or older, a big 2026 conversion affects 2028 premiums (the two-year lookback).
- ACA premium tax credits. If you are on a Marketplace plan, a large conversion raises MAGI and can cut or eliminate subsidies, which matters most for early retirees.
- Net Investment Income Tax. Income above $200,000 single or $250,000 married triggers a 3.8% surtax on investment income, and large conversions can push you there.
How do you execute a conversion?
- Open a Roth IRA if you do not have one, ideally at the same institution as your traditional IRA.
- Contact your custodian (Fidelity, Vanguard, Schwab) and request the conversion; most allow it online.
- Decide what to convert: specific funds, a dollar amount, or the whole balance.
- Pay the tax from outside funds, not from the conversion itself, since withholding reduces what lands in the Roth and can trigger an early-withdrawal penalty if you are under 59 and a half.
- Complete it by December 31, since conversions are irreversible (recharacterization was eliminated in 2018).
See our guide on lowering your tax bill before year end.
What is the backdoor Roth for high earners?
If your income exceeds the Roth contribution limit (for 2026, the phase-out runs $153,000 to $168,000 single and $242,000 to $252,000 married), you cannot contribute directly. The backdoor Roth gets around it: contribute to a non-deductible traditional IRA, then immediately convert to Roth. The conversion is tax-free only if you have no other pre-tax IRA funds, because of the pro-rata rule, so verify with a tax advisor if you hold existing traditional IRA balances. It must also be done by December 31 to count for 2026.
What is the mega backdoor Roth?
Some 401(k) plans allow after-tax contributions above the $24,500 pre-tax limit, which can then be converted to Roth in-plan or rolled to a Roth IRA. The total 2026 401(k) limit including after-tax contributions is $72,000, so if your plan allows in-service distributions or in-plan Roth conversions, this can shelter up to roughly $47,500 in extra after-tax Roth contributions a year. See our mega backdoor Roth guide, and check your plan documents or call your plan administrator.
Estimate Roth vs traditional
Use this calculator to compare a Roth and traditional approach based on your tax rates and time horizon:
Roth vs Traditional IRA Calculator
Frequently Asked Questions
December 31, 2026. Unlike IRA contributions, conversions have no April extension, and they cannot be undone, since recharacterization ended in 2018.
Generally enough to fill your current tax bracket without spilling into the next. Watch for IRMAA, ACA subsidy, and 3.8% surtax thresholds, and pay the tax from funds outside the IRA.
Often yes. A low-income year (job loss, sabbatical, early retirement) puts you in a lower bracket, so the tax cost of converting is lower than your long-term average rate.
A way for high earners over the Roth income limit to fund a Roth: contribute to a non-deductible traditional IRA and convert it. It is tax-free only if you have no other pre-tax IRA money, due to the pro-rata rule.
Bottom line
Convert to a Roth when today’s tax rate is lower than your expected retirement rate, fill your current bracket without spilling over, and finish by December 31, paying the tax from outside funds. Low-income years, the 12% bracket, and large traditional balances are the strongest cases, but watch IRMAA, ACA, and surtax thresholds. To go deeper, see our guides on lowering your tax bill before year end, OBBBA tax changes, and freelancer and self-employed taxes.
This article is for educational and informational purposes only and is not tax advice. Roth conversions involve complex tax interactions, so consult a tax professional before executing a large conversion, and confirm current figures at irs.gov.
