Should You Still Do a Roth Conversion in 2026? A Full Guide

A Roth conversion moves money from a traditional IRA into a Roth IRA. You pay ordinary income tax on the converted amount now, and in exchange the money grows tax-free: qualified withdrawals are never taxed again. For years, the pitch was simple: convert before the 2017 tax cuts expire and rates jump. But the One Big Beautiful Bill Act (OBBBA), signed into law in 2025, made those lower brackets permanent. That changes the calculus significantly.

So should you still do a Roth conversion in 2026? The short answer is: it depends on your personal tax rate now versus your expected rate in retirement. The blanket "convert everything before the sunset" argument is gone. What remains is a powerful but situation-specific strategy. If you are in a temporary low-income year, facing large future required minimum distributions (RMDs), or sitting in the gap between retirement and age 73–75 when RMDs begin, a well-sized conversion can still save you tens of thousands of dollars over your lifetime. But if you convert carelessly, ignoring Medicare surcharges, Social Security taxation thresholds, or capital-gains brackets, you can actually lose money on the deal. This guide walks you through every factor, with dollar amounts, a decision framework, and the specific traps to avoid. This is especially important if you're someone who has a large traditional IRA balance and is within a decade of retirement.

Should You Still Do a Roth Conversion in 2026? The Core Question

The question of whether you should still do a Roth conversion in 2026 hinges on one comparison: your marginal tax rate today versus your marginal tax rate when you'd otherwise withdraw the money. If today's rate is lower, converting saves you money. If today's rate is higher or equal, converting costs you money, or at best breaks even while locking up liquidity.

Before the OBBBA, the math tilted broadly in favor of converting. The 2017 Tax Cuts and Jobs Act (TCJA) brackets were set to expire after 2025, which would have pushed the 22% bracket back to 25%, the 24% bracket back to 28%, and so on. "Convert now at 22% instead of 28% later" was a compelling, widely applicable argument. The OBBBA removed that sunset, making those lower brackets permanent as of June 2026.

This doesn't mean Roth conversions are dead. It means conversions no longer get a free tailwind from expiring legislation. Each conversion must now justify itself on its own merits: your specific income, your specific deductions, your specific retirement trajectory. If you're deciding between converting this year or waiting, the answer is no longer "always convert now." It's "run the numbers for your situation."

What changed and what didn't

The structural advantages of Roth accounts (no lifetime RMDs, tax-free growth, tax-free withdrawals for heirs) are completely untouched by the OBBBA. What changed is the timing pressure, not the strategy itself.

When a Roth Conversion Still Makes Sense in 2026

Three situations still create a strong case for converting, even without the bracket-sunset tailwind.

1. You expect a higher personal tax rate later

Even with permanent brackets, your personal rate can rise. Consider a married couple, David and Maria, both age 62, with $1.8 million in traditional IRAs. They've just retired, and their 2026 income is only $48,000 from a part-time consulting gig. They're in the 12% bracket. But once David starts Social Security at 67, Maria's pension kicks in at 65, and RMDs begin at 73, their combined income could push them into the 24% bracket or higher. Converting $50,000 this year at 12% instead of withdrawing it later at 24% saves them $6,000 in federal tax on that chunk alone, and that's before accounting for decades of tax-free growth inside the Roth.

2. You are in a temporary low-income year

A sabbatical, a gap between jobs, a year spent caregiving, or the first year of early retirement can leave you with unusually low taxable income. That gap is a conversion window. For example, consider Sarah, age 58, who left her corporate job in late 2025 and won't start her own consulting practice until mid-2027. Her 2026 taxable income is just $22,000 from severance. She has roughly $78,000 of room in the 12% bracket (for a single filer in 2026, the 12% bracket runs to about $48,475 of taxable income after the standard deduction of $15,700). Converting $26,000 fills that bracket space at a 12% federal rate, a $3,120 tax bill now that prevents a much larger bill later when she's earning $150,000+ again.

3. You are in the pre-RMD window

The years between retirement and the start of RMDs (age 73 or 75, depending on birth year) are often the lowest-bracket years of your life. Earned income has stopped, Social Security may not have started, and RMDs haven't begun. That empty bracket space is the single most valuable, and most underused, asset in retirement planning. Should you still do a Roth conversion in 2026 if you're in this window? Almost certainly yes, as long as you size it correctly.

There are also non-tax reasons to convert: Roth accounts have no lifetime RMDs, which simplifies estate planning. Heirs who inherit a Roth IRA can withdraw from it tax-free (though they must empty it within 10 years under the SECURE Act). And Roth withdrawals don't count toward the income thresholds that trigger Social Security taxation or IRMAA surcharges.

Dollar-Impact Ladder: How Much Could a Conversion Save?

The value of a Roth conversion depends on the amount converted and the rate difference between now and later. Here's what the federal tax savings look like at different conversion sizes, assuming you convert at 12% now and would otherwise withdraw at 24% later, a 12-point rate gap.

These figures are federal only and don't include state income tax (which varies: some states like Florida and Texas have none; others like California add up to 13.3%). They also don't account for the investment growth that would compound tax-free inside the Roth. Over a 15-year horizon, a $50,000 conversion growing at 6% annually becomes roughly $119,800, all withdrawn tax-free. The same $50,000 left in a traditional IRA grows to the same amount, but the full withdrawal is taxed at ordinary income rates.

The savings disappear if your rate gap is zero or negative. If you convert at 24% and withdraw later at 22%, you've prepaid tax at a higher rate. That's why the personal rate comparison is the foundation of every conversion decision.

The IRMAA Cliff: The Hidden Trap That Erases the Benefit

A Roth conversion raises your modified adjusted gross income (MAGI) for the year. Income determines more than just your tax bracket. The biggest hidden cost, and the one most people overlook, is IRMAA: the Income-Related Monthly Adjustment Amount, a surcharge on Medicare Part B and Part D premiums.

IRMAA is a cliff system, not a gradual ramp. Cross a threshold by a single dollar and the full surcharge applies for the entire year. And it operates on a two-year lookback: a conversion done in 2026 affects your 2028 Medicare premiums, a cost that lands long after you've forgotten the original decision.

2026 IRMAA thresholds (single filers)

Thresholds are approximate and based on 2026 published figures; exact amounts are set annually by CMS.

The fix is to size the conversion deliberately. Calculate how much room you have between your current MAGI and the next IRMAA threshold, then convert up to, not past, that line. If David and Maria from our earlier example have a combined MAGI of $180,000 before converting, and the married-filing-jointly IRMAA cliff sits at $212,000, they have $32,000 of conversion room before triggering a surcharge. Converting $35,000 would cost them roughly $1,680 in extra Medicare premiums two years later, potentially wiping out a meaningful portion of their tax savings.

Use our Roth conversion calculator to model this precisely for your income.

Other Cliffs and Thresholds to Watch

IRMAA is the most common surprise, but a 2026 conversion can also collide with several other income-sensitive thresholds:

• Social Security taxation: Up to 85% of your Social Security benefits become taxable once combined income exceeds $34,000 (single) or $44,000 (married filing jointly). A conversion pushes you toward or past these thresholds.
• Net Investment Income Tax (NIIT): A 3.8% surtax applies to investment income once MAGI exceeds $200,000 (single) or $250,000 (married filing jointly). A conversion doesn't trigger NIIT directly, but it can push other investment income above the line.
• ACA premium tax credit phase-outs: If you're on a marketplace health plan before Medicare eligibility, conversion income can reduce or eliminate your premium subsidies, a cost that can run thousands of dollars.
• Capital-gains bracket boundaries: The 0% long-term capital-gains rate applies up to roughly $47,025 of taxable income for single filers in 2026. A conversion adds to taxable income and can push realized gains from 0% to 15%.

One realized capital gain in the same year shrinks your conversion room dollar for dollar. The lesson is consistent: plan a conversion in specific dollar amounts based on a full income projection, not by converting "what feels right."

The "Convert Before the Sunset" Hook: What It Got Right and What It Missed

For years, financial media and some advisors pushed a compelling marketing hook: "Convert your IRA to Roth before 2026 or pay much higher taxes forever." This hook was directionally correct: if the TCJA brackets had expired, rates would have risen by 2 to 4 points across most brackets. But it missed several realities:

1. It assumed the sunset would happen. The OBBBA proved that assumption wrong. Anyone who panic-converted a large amount in 2024 or 2025 at a higher bracket than necessary may have overpaid.
2. It ignored IRMAA and other cliffs. The hook focused exclusively on income tax rates and glossed over the surcharges and phase-outs that can turn a "tax-saving" conversion into a net loss.
3. It treated all traditional IRA holders the same. A 35-year-old with a $40,000 IRA and a 68-year-old with a $2 million IRA face completely different conversion dynamics. Blanket advice erased those distinctions.

The 2026 version of the hook is quieter ("permanent low rates mean you should still convert") but it still requires the same scrutiny. Any time someone tells you to convert without asking about your income, your Medicare status, your state tax rate, and your retirement timeline, the advice is incomplete.

How to Execute a Roth Conversion in 2026

If your analysis shows a conversion makes sense, here's how to do it step by step:

1. Gather your full 2026 income picture. Add up all expected income: wages, Social Security, pensions, rental income, capital gains, and any other sources. You need this total before deciding how much to convert.
2. Identify your bracket ceiling and your IRMAA ceiling. Find the top of your current federal tax bracket and the nearest IRMAA threshold (use the IRMAA calculator to model both). Your conversion amount should stay below both ceilings.
3. Choose the conversion amount and execute it. Contact your IRA custodian (Fidelity, Schwab, Vanguard, etc.) and request a Roth conversion for the specific dollar amount. This is a taxable event: the custodian will issue a 1099-R for the conversion year.
4. Set aside money for the tax bill. Pay the resulting income tax from a separate taxable account, not from the converted funds. Paying tax from the conversion itself reduces the amount that ends up in the Roth and undermines the benefit.
5. Confirm estimated tax payments. If you don't have enough withholding to cover the conversion tax, make a quarterly estimated payment to the IRS (pay online at IRS.gov) to avoid an underpayment penalty.
6. Document the conversion for your records. Keep the 1099-R, your income projection worksheet, and your IRMAA calculation. If you work with a CPA or fee-only planner, share these before year-end so they can verify the sizing.

Decision Framework: Should You Convert or Wait?

Use this framework to guide your decision. If you're deciding between converting in 2026 or holding off, match your situation to the column that fits best.

Choose to convert in 2026 if:

• Your current marginal tax rate is clearly lower than your expected rate in retirement
• You are in a temporary low-income year (job change, early retirement, sabbatical)
• You are in the pre-RMD window (retired, but RMDs haven't started)
• You have room under the next IRMAA threshold
• You can pay the tax bill from non-IRA funds
• You want to reduce future RMDs and simplify estate planning

Choose to wait (or skip) if:

• Your current marginal rate is equal to or higher than your expected retirement rate
• A conversion would push you past an IRMAA cliff or Social Security taxation threshold
• You need the converted funds within five years (the five-year rule applies to converted amounts)
• You're on an ACA marketplace plan and a conversion would eliminate your premium subsidy
• You don't have cash outside the IRA to cover the tax bill

This is not an all-or-nothing decision. Partial conversions, converting a specific dollar amount each year to fill bracket space, are often more effective than a single large conversion. Many advisors recommend a "Roth conversion ladder" spread over 5 to 15 years.

Pros and Cons of a Roth Conversion in 2026

Where a conversion wins

• Tax-free growth and withdrawals. Once funds are in the Roth, all future growth and qualified withdrawals are federal-income-tax-free.
• No lifetime RMDs. Unlike traditional IRAs, Roth IRAs don't force you to withdraw starting at 73 or 75. Your money can compound for decades longer.
• Tax-free inheritance. Heirs who inherit a Roth IRA withdraw tax-free, even under the 10-year SECURE Act rule. This can save a high-earning child hundreds of thousands of dollars.
• Hedges against future tax increases. Even though current brackets are permanent, Congress can always change the law. Roth money is already taxed and largely immune to future rate hikes.
• Reduces future RMDs. Every dollar converted out of a traditional IRA is a dollar that won't compound into a larger RMD later.

Where it falls short

• Immediate tax bill. You owe income tax on the full converted amount in the year of conversion. This is a guaranteed cost for an uncertain future benefit.
• IRMAA and other surcharge risks. As discussed above, a poorly sized conversion can trigger Medicare surcharges, Social Security taxation, or loss of ACA subsidies.
• Five-year rule. Converted amounts must stay in the Roth for at least five years (or until age 59½, whichever comes later) to avoid a 10% early-withdrawal penalty on the converted amount.
• Opportunity cost. The money you use to pay the tax bill could have been invested. If you pay tax from the IRA itself, you lose both the tax payment and its future growth.
• State tax adds up. In high-tax states, the combined federal-and-state rate on a conversion can exceed 35%, shrinking the benefit substantially.

Where to Park Conversion Tax Funds While You Wait

If you're setting aside cash to pay the conversion tax bill (which is due with your 2026 return in April 2027), a high-yield savings account is a practical holding spot. As of June 2026, the best high-yield savings accounts pay 4.40%, compared to a national average of 0.38%. That difference on a $10,000 tax reserve over 9 months is roughly $300 in extra interest, money that partially offsets the conversion cost.

If you prefer to lock in a rate, a short-term CD can work as well. The best 12-month CD rates are currently around 4.15%. Learn more about how CDs compare to savings accounts and whether a CD ladder strategy makes sense for your situation.

For context, the fed funds rate sits at 3.75% as of June 2026, and short-term Treasuries yield 4.30% to 4.10% depending on the term. These provide a benchmark for evaluating any savings or CD rate you're offered.

If you're managing broader cash reserves alongside a conversion strategy, our guide to building an emergency fund covers how to balance liquidity with yield.

Methodology

SwitchWize evaluates financial strategies by combining current tax code provisions, published regulatory thresholds (IRS brackets, CMS IRMAA tables), and independent financial planning research. Product rates displayed on this page are updated daily from issuer sources and ranked by APY net of fees. For full details on how we verify data and rank products, see our methodology page.

This is educational information, not personalized financial advice. Consult a qualified tax professional or fee-only financial planner before executing a Roth conversion.