If you’re approaching retirement—or you’ve recently retired—you’ve probably heard more conversations about Roth conversions than ever before.
Friends may be talking about them. Financial headlines often describe them as a smart tax strategy. Some articles make Roth conversions sound like something everyone should do, while others suggest avoiding them altogether.
So, who’s right?
In my experience, the answer is that a Roth conversion isn’t inherently “good” or “bad.” Like many important financial planning decisions, whether it makes sense could depend on your personal circumstances.
One of the most common questions we hear is:
“Should we convert our IRA to a Roth?”
An understandable question we’ve heard time and time again. After spending decades building your retirement savings, it’s natural to want confidence that you’re making thoughtful decisions about protecting what you’ve worked so hard to achieve. We feel the answer isn’t found in a headline. We believe it’s found in a plan.
What Is a Roth Conversion?
A Roth conversion is moving money from a Traditional IRA or other pre-tax retirement account into a Roth IRA.
Because those dollars haven’t been taxed yet, the amount you convert is generally included in your taxable income for that year.
In return, future qualified withdrawals from the Roth IRA may be tax-free under current tax law.
That’s a straightforward explanation. The more important question may be how a Roth conversion works—and whether converting today creates a better financial outcome over the course of your retirement.
When a Roth Conversion May Make Sense
Once you retire, your financial decisions often become more interconnected.
You’re no longer focused on accumulating wealth. Instead, you’re prone to making decisions about how to generate income, manage taxes, preserve flexibility, and enjoy retirement with confidence.
For some families, there may be years when taxable income is temporarily lower than usual.
Imagine you’ve recently retired. Your paycheck has stopped, but you haven’t started Social Security yet. Required Minimum Distributions (RMDs) are typically still several years away.
Those “in-between” years can sometimes create opportunities to strategically convert portions of retirement savings while remaining within a desired tax bracket.
The goal isn’t necessarily to eliminate taxes.
It’s often about managing when those taxes are paid in a way that supports your long-term retirement income strategy.
When It May Not Be the Right Choice
A Roth conversion isn’t automatically beneficial simply because someone recommends it.
Converting too much in a single year could:
- Push you into a higher tax bracket.
- Increase the taxation of Social Security benefits.
- Affect future Medicare premiums through Income-Related Monthly Adjustment Amounts (IRMAA).
- Reduce flexibility for other financial goals.
I do not consider a Roth conversion a race.
In many situations, converting smaller amounts over several years may provide greater flexibility than converting everything at once.
And sometimes, the best decision may be to wait.
Every family’s situation is different, which is why I believe thoughtful planning matters.
Looking at the Bigger Picture
One of the first questions we often hear is:
“Should we convert all of our IRA?”
Interestingly, that’s usually not the first question we ask.
Instead, we start by understanding the bigger picture.
Questions like:
- What income will you need throughout retirement?
- When do you plan to begin Social Security?
- How might Required Minimum Distributions affect your future tax picture?
- What other sources of retirement income do you have?
- Are you planning to help children or grandchildren financially?
- What does your overall retirement income plan look like?
Those answers help shape the conversation.
We often find that the Roth conversion itself isn’t the real decision.
The real decision can come from creating a retirement income strategy that balances taxes, income needs, healthcare costs, estate planning goals, and long-term flexibility.
A Roth conversion may become an important part of that strategy. Or it may not.
Planning Before Acting
Financial decisions rarely happen in isolation.
Changing one piece of your retirement plan can affect several others.
That’s why we believe it’s valuable to model different scenarios before making significant decisions.
Sometimes the numbers support a Roth conversion.
Sometimes they suggest waiting.
Sometimes they point toward a completely different approach.
We believe good retirement planning isn’t about avoiding taxes altogether; it’s about paying taxes intentionally.
Rather than reacting to headlines or following what worked for someone else, thoughtful planning should focus on understanding how each decision fits into your overall financial picture.
Final Thoughts
There isn’t a universal answer when it comes to Roth conversions.
The right strategy should consider your income, tax situation, retirement timeline, estate planning goals, and many other factors unique to your family.
If you’re wondering whether a Roth conversion belongs in your retirement plan, the best place to start isn’t by asking what everyone else is doing.
I recommend you understand how the decision fits into your own long-term goals.
The best retirement decisions rarely come from reacting to headlines.
They are more than likely to come from having a plan that helps you understand your options, evaluate potential tradeoffs, and make decisions with greater confidence.
A Roth conversion may be an important piece of that plan.
Or it may not.
The key to helping make the right decision is based on your unique circumstances—not someone else’s.
This article is provided for educational and informational purposes only and should not be considered tax, legal, or investment advice. Roth conversions involve tax consequences and may not be appropriate for every investor. The benefits of a Roth conversion depend on your individual circumstances, including your current and anticipated future tax situation.
Before making any financial, tax, or investment decision, consult with your financial advisor and qualified tax professional. Tax laws and regulations are subject to change, and their application may vary based on individual circumstances.
Investing involves risk, including the possible loss of principal. Past performance does not guarantee future results.
Investment Adviser Representative of and investment services offered through Royal Fund Management, LLC, an SEC Registered Adviser.
Insurance product guarantees are subject to the claims-paying ability of the issuing company. The adviser is paid commissions on the sale of insurance products.
