Roth Conversion 2026
Converting to a Roth means paying tax now to get tax-free money later. It is not always the right move — but in the right year, it can lock in today's rate and save a fortune. Here is the 2026 math and when it pays.
Conversion limit
None
Any amount, any income
Tax on conversion
Ordinary income
In the year converted
5-year rule
5 years
On converted earnings
Best timing
Low-income years
Or market dips
What a Roth Conversion Is
A Roth conversion moves money from a traditional IRA (or 401(k)) into a Roth IRA. There is no income limit and no cap on how much you convert. The trade-off is that the converted amount is added to your taxable income in the year you convert — so the whole strategy is about paying tax at a low rate today to avoid a higher rate later.
See your tax bracket
Understand the rate a conversion would be taxed at.
The Tax You Pay Now
Convert $50,000 and your taxable income rises by $50,000 that year. If that pushes part of the conversion into a higher bracket, the effective cost rises. A single filer with $60,000 of other income sits in the 22% bracket — a $50,000 conversion costs about $11,000 in federal tax. The value only materializes later, when those dollars (and their growth) come out tax-free.
When Conversion Wins
- Low-income years — between jobs, a sabbatical, or the gap between retirement and claiming Social Security.
- Market downturns — converting a depressed balance means more shares move tax-free for the same tax bill.
- Before RMDs begin — shrinking your traditional balance reduces future required distributions, which can also protect Social Security from taxation.
- Expecting a higher bracket later — a big raise, a pension, or future tax-rate changes all argue for converting now.
The 5-Year Rule
Each conversion has its own 5-year clock: if you withdraw the earnings from a converted Roth within five years (and before age 59½), you may owe a 10% penalty. The converted principal can generally be withdrawn anytime without penalty, since it was already taxed. This is separate from the "5-year rule" for qualified Roth distributions.
Frequently Asked Questions
Can I undo a Roth conversion?
Not anymore. "Recharacterization" of conversions was eliminated, so once you convert, it is permanent. This makes careful planning — especially around your tax bracket — essential.
Should I pay conversion tax from the IRA or outside money?
Paying from outside funds is almost always better. Withholding tax from the conversion itself reduces the amount that moves to the Roth and can trigger penalties if you are under 59½.
Does a conversion affect my Social Security tax?
It can. A conversion raises your income for the year, which can make more of your Social Security benefits taxable. Timing conversions before claiming Social Security often avoids this.
How is a conversion different from a backdoor Roth?
A backdoor Roth converts a non-deductible contribution (tax-free). A conversion typically moves pre-tax money, which is taxable. They use the same mechanics but very different tax outcomes.
Sources
- IRS Publication 590-A — Roth conversion rules.
- IRS — 5-year rule for Roth conversions.
- IRS Revenue Procedure 2025-32 — 2026 brackets used in the example.
This is informational, not tax advice. Conversions are permanent and interact with your full income picture — run a projection before converting.