Should you do a Roth conversion? And if so, how much? And when? And how do you actually do the darn thing? This is usually how the sequence of questions I receive around Roth conversions goes. And the answer to all of them, I know you will be surprised to hear, is it depends. Each person has a unique financial, tax and life situation. What makes perfect sense in one situation might not be as elegant in another.
First, what is a Roth conversion? Glad you asked! A Roth conversion is when you move money from a pretax retirement account, such as a Traditional IRA, into a Roth IRA. Generally, the amount you convert that has not previously been taxed gets added to your ordinary taxable income for that year.¹
Suppose you have $100,000 in a Traditional IRA and convert $20,000. Assuming all of the money is pretax, that $20,000 generally gets added to your taxable income. If those dollars fall within the 22% federal tax bracket, that could mean roughly $4,400 in additional federal income tax.
So, why would you voluntarily pay the tax before you have to? Because you are essentially making a decision about when you want to pay it.
With a Roth IRA, you pay the applicable tax on the conversion today, the assets can continue growing inside the Roth, and qualified distributions can ultimately come out free from federal income tax. Roth IRAs also do not have required minimum distributions during the original owner’s lifetime. ²
This is where it gets interesting. Reducing the amount of money sitting in pretax accounts today may reduce your taxable income later in retirement, potentially affecting things like Medicare premiums, IRMAA and the taxation of Social Security. But, and this is a BIG but, the conversion itself increases your taxable income in the year you do it. Too large of a conversion could push you into a higher tax bracket, increase future Medicare premiums or cause more of your Social Security to become taxable.³ ⁴
This is why the question isn’t really, “Should I do a Roth conversion?” It is, “How much should I convert, when should I convert it and how much tax am I willing to pay to do it?”
For some perspective, the highest federal individual income tax rate for 2026 is 37%. ⁵ Historically, the top marginal rate has been as high as 91% during much of the 1950s and early 1960s and 70% through much of the 1970s.⁶ Does that mean taxes are definitely going up? No. Does it mean you should convert your entire IRA tomorrow? Also no.
What we do know is what the tax rules look like today, how much you have sitting in pretax accounts and what could happen if we do absolutely nothing.
If you have $2 million sitting in a Traditional IRA, you see $2 million on your statement. But you don’t necessarily have $2 million available to spend. If those dollars have never been taxed, the government still has a claim on some portion of that money when taxable distributions occur. We just don’t know exactly how big that claim will ultimately be.
Regardless of whether right now is the right time for you to execute a Roth conversion, it IS the right time to evaluate your future tax liability and make a plan for it.
Want to know what this could look like for you? Visit the Nightingale Wealth Solutions website to complete your complimentary Roth Conversion Report. We will help you see whether a Roth conversion might make sense for your situation, what your future tax liability will likely be, what a potential conversion could look like and, most importantly, what questions you should be asking before you make the decision.
Because the goal isn’t simply to pay the least amount of tax this year. The goal is to understand what you and your family could pay in taxes over your lifetime and make intelligent decisions today while you still have the ability to influence that number.
Sources
1. Internal Revenue Service. Publication 590 A: Contributions to Individual Retirement Arrangements (IRAs). U.S. Department of the Treasury.
2. Internal Revenue Service. Publication 590 B: Distributions from Individual Retirement Arrangements (IRAs). U.S. Department of the Treasury.
3. Centers for Medicare & Medicaid Services. “2026 Medicare Parts A & B Premiums and Deductibles.” CMS, 14 Nov. 2025.
4. Internal Revenue Service. Publication 915: Social Security and Equivalent Railroad Retirement Benefits. U.S. Department of the Treasury.
5. Internal Revenue Service. “IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments from the One, Big, Beautiful Bill.” Internal Revenue Service.
6. Federal Reserve Bank of St. Louis. “U.S. Individual Income Tax: Tax Rates for Regular Tax: Highest Bracket.” FRED. Source: U.S. Department of the Treasury, Internal Revenue Service.
Disclosure
This material is provided for educational and informational purposes only and should not be construed as individualized investment, tax or legal advice. Roth conversion strategies should be evaluated based on an individual’s specific financial circumstances, tax situation and objectives. Tax laws and regulations are subject to change. Individuals should consult with their financial, tax and legal professionals before implementing a Roth conversion strategy. Securities and advisory services offered through Packerland Brokerage Services Inc., an unaffiliated entity – Member FINRA & SIPC.
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