Should I do a Roth conversion in 2026? #
A Roth conversion means paying ordinary income tax now to move pre-tax IRA or 401(k) money into a Roth for tax-free growth and no required minimum distributions. In 2026, the One Big Beautiful Bill Act made the TCJA brackets permanent — so there is no rate-hike deadline. Convert when your current marginal rate is lower than your expected future rate: usually to fill up a low bracket in an early-retirement or low-income year, or to shrink future RMDs that would otherwise stack with Social Security and push you into higher brackets and higher Medicare premiums.
- OBBB (P.L. 119-21, 2025) made the TCJA 10/12/22/24/32/35/37% brackets permanent — the 2026 sunset was repealed.
- There is no income limit on Roth conversions (unlike direct Roth IRA contributions).
- Roth conversions are irreversible — recharacterization was repealed by TCJA in 2017.
- Conversions raise MAGI and can trigger IRMAA Medicare surcharges two years later.
- Each conversion starts its own 5-year clock for penalty-free access before age 59½.
- Pay the conversion tax from outside funds, not the IRA, or the benefit erodes.
No 2026 rate-hike deadline #
For years, Roth conversion articles urged readers to convert before the TCJA brackets sunset after 2025. The One Big Beautiful Bill Act (2025) repealed that sunset and made the current brackets permanent. Any 2026 conversion has to be justified on its own numbers — not a countdown clock.
Run your numbers #
Model your exact 2026 conversion — bracket fill, tax owed, IRMAA impact — in the Roth Conversion Calculator.
What changed for 2026 #
The single most important thing to know about 2026 Roth conversions is what didn't happen: individual tax rates did not go up. The TCJA brackets were scheduled to expire on December 31, 2025, which drove years of "convert now while rates are low" advice. The One Big Beautiful Bill Act (P.L. 119-21, signed July 4, 2025) made the TCJA rate schedule permanent. The 10/12/22/24/32/35/37% brackets continue indefinitely.
Translation: the urgency is gone. A 2026 conversion is no longer a "lock in low rates before they jump" move — it's a bet that your future marginal rate will be higher than your current one. That bet still wins in a lot of situations. It just isn't a market-wide, everybody-should-do-this event anymore.
When a conversion still makes sense in 2026 #
- Fill up a low bracket in a low-income year. Gap years between retirement and Social Security, sabbaticals, business losses, or the first year of early retirement are prime windows. Convert exactly enough to reach the top of the 12% or 22% bracket — no further.
- Shrink future RMDs. Under SECURE 2.0, RMDs start at age 73 (age 75 for those born 1960+). A large pre-tax balance produces large RMDs that stack on top of Social Security and pension income, potentially pushing you into a higher bracket and higher Medicare IRMAA tier. Chipping the pre-tax balance down in your 60s often lowers lifetime tax. Model the effect in the RMD Calculator.
- Tax-free growth with no owner RMDs. Roth IRAs have no RMDs during the original owner's lifetime, so converted dollars can compound tax-free for decades.
- Tax-free legacy for heirs. Contributions and converted dollars come out of an inherited Roth tax-free, and earnings do too once the original owner's first Roth IRA is 5 tax years old. Earnings withdrawn before that are taxable (but not penalized). Most non-spouse heirs must empty the account within 10 years, with no annual RMDs; a surviving spouse can treat it as their own. That is still a large gift for heirs in their peak earning years.
- Hedge the widow(er)'s penalty. When one spouse dies, the survivor files as single at compressed brackets — often on nearly the same income. Roth dollars don't count as taxable income in that scenario.
The traps (most content misses these) #
Before you convert, check these six things
- Pay the tax from OUTSIDE funds. If you withhold from the IRA to cover taxes you shrink the compounding base and, if you're under 59½, trigger a 10% early-withdrawal penalty on the withheld amount.
- IRMAA 2-year lookback. A conversion in 2026 spikes MAGI, which determines 2028 Medicare Part B and Part D surcharges. This starts biting at age 63. Review the 2026 IRMAA brackets and lookback rules, then check the impact in the IRMAA Calculator before you convert.
- Social Security taxability jumps. Higher AGI pulls more of your Social Security benefit into the taxable range (up to 85%). Model it in the Social Security Calculator.
- 3.8% NIIT and capital-gains stacking. Higher AGI can trigger the Net Investment Income Tax on your dividends and gains, and push preferential long-term gains from the 0% into the 15% or from the 15% into the 20% bracket.
- You cannot undo a conversion. Recharacterization was repealed by TCJA (2017). Over-convert and you owe the tax whether or not the market cooperates. Do not convert an amount you might regret.
- Each conversion has its own 5-year clock. Converted principal is penalty-free after five tax years or age 59½, whichever comes first. Under 59½? Plan a five-year runway before you need the money.
- ACA subsidy cliff. Conversions raise MAGI. For Marketplace-insured households near 400% of the poverty line, even a modest conversion can vaporize the entire premium tax credit — and OBBB removed the repayment caps for 2026. Check exposure in the ACA Subsidy Cliff Calculator before you convert.
How to size the conversion #
The general rule is convert up to the top of your target bracket, and stop. The extra dollar that spills into the next bracket costs you not just the higher marginal rate, but potentially IRMAA, NIIT, and Social Security taxability jumps too. Use the calculator to find the exact ceiling for your situation:
- Project this year's taxable income. Add up wages, self-employment, pensions, Social Security, dividends, and required distributions to find your marginal bracket before any conversion.
- Pick your target bracket ceiling. Decide the top bracket you're willing to pay on converted dollars — usually your current bracket or one you're already in for the year.
- Model the exact conversion amount. Use the Roth Conversion Calculator to find the largest conversion that stays inside your target bracket without triggering IRMAA, NIIT, or Social Security taxability jumps.
- Execute the conversion with your custodian. Request the conversion from your IRA custodian or plan administrator. Any earnings between contribution and conversion are taxable at ordinary rates.
- Pay the tax from outside funds. Pay the conversion tax from taxable-account cash — never from the IRA itself. Paying tax with IRA dollars shrinks the compounding base and (under 59½) also triggers the 10% early-withdrawal penalty.
- Report it on your return. Converting a traditional, SEP or SIMPLE IRA: file Form 8606, Part II, for the year you converted (Part I if you also have nondeductible basis). Converting 401(k), 403(b) or governmental 457(b) money, whether a direct rollover to a Roth IRA or an in-plan Roth conversion: the plan sends Form 1099-R (code G) and you report it on Form 1040 lines 5a/5b, not on Form 8606 Part II. Keep that 1099-R: for a rollover into a Roth IRA, the amount counts as conversion basis if you later take a nonqualified Roth IRA distribution.
Best timing #
- Low-income years. Between full-time work and Social Security is often the sweet spot.
- Market dips. A depressed portfolio value means fewer taxable dollars per share converted. When the market recovers, that recovery happens inside the Roth.
- Before RMDs begin. Every year you convert in your 60s is a year that pre-tax balance isn't compounding into a bigger future RMD.
- Before Medicare enrollment. Conversions before age 63 avoid the IRMAA 2-year lookback altogether.
- Before claiming Social Security. Once benefits start, conversions also push more of the benefit into the taxable range.
Frequently asked questions #
- Should I do a Roth conversion in 2026?
- Only if your current marginal tax rate is lower than the rate you expect to pay in retirement. The classic case: an early-retirement or low-income year where you can fill up a low bracket without spilling into the next. There is no 2026 rate-hike deadline — the One Big Beautiful Bill Act made the TCJA brackets permanent — so a conversion must stand on its own numbers.
- Didn't tax rates go up in 2026?
- No. The One Big Beautiful Bill Act (P.L. 119-21, 2025) made the TCJA individual income-tax brackets permanent. The 10/12/22/24/32/35/37% brackets that were scheduled to sunset after 2025 are the law of the land. Any advice built on 'convert now before the 2026 sunset' is stale.
- How much should I convert?
- Convert up to the top of your current marginal bracket — no further. Spilling into the next bracket taxes those extra dollars at the higher rate and can also stack capital gains, trigger the 3.8% NIIT, and push Medicare premiums up two years later. Model the exact stopping point in the Roth Conversion Calculator with your other income for the year.
- Will a Roth conversion raise my Medicare premiums?
- Yes — indirectly, via the IRMAA 2-year lookback. Your 2026 MAGI (including the conversion) determines your 2028 Medicare Part B and Part D surcharges. This trap is especially expensive starting at age 63, when your income first affects Medicare pricing. Model it before you convert.
- Can I undo a Roth conversion?
- No. Roth conversion recharacterization was repealed by the 2017 Tax Cuts and Jobs Act. Once you convert, it is permanent — you owe the tax whether or not the market cooperates. That is why over-converting is a real risk and why sizing to the top of your bracket (not beyond) matters.
- Does each conversion have its own 5-year rule?
- Yes. Each Roth conversion starts its own 5-year clock for penalty-free access to the converted principal before age 59½. This is separate from the Roth IRA's own 5-year clock for tax-free earnings. Under 59½? Plan the timing so you do not need those converted dollars for at least five years.
Educational content only. A Roth conversion is a permanent, taxable event with multi-year Medicare and Social Security consequences — model it in the calculator and consider consulting a CPA or CFP® before executing.
Sources & References #
Disclaimer: This calculator provides estimates for educational purposes only. Not tax, legal, or financial advice. Results may vary based on your specific circumstances. Consult a qualified CPA or tax professional for personalized guidance.