As we head into November, one tax planning question is worth revisiting: Does a Roth conversion make sense before the end of the year?
A Roth conversion can be a valuable retirement tax strategy, but knowing when to convert and how much to convert is often more important than simply deciding to do one.
With most of 2026 behind us, we can usually get a fairly good estimate of where income, deductions, and adjusted gross income (AGI) will land for the year. That makes this a good time to compare different scenarios and determine whether converting some of a traditional IRA to a Roth IRA could create long-term tax benefits.
The challenge is that Roth conversions affect more than just your income tax bracket. They can also influence Medicare premiums, the taxation of Social Security benefits, certain deductions and credits, and even how efficiently assets eventually pass to your heirs.
The short answer: A Roth conversion may make sense when you can pay taxes at a favorable rate today, reduce potential future taxes, and create more flexibility in retirement. But the right decision depends on the full tax picture, not just your current tax bracket.
What Is a Roth Conversion?
A Roth conversion moves money from a traditional, generally tax-deferred retirement account into a Roth IRA.
The taxable portion of the conversion is included in your income for the year of conversion. In exchange, the funds can potentially grow tax-free, and qualified Roth IRA withdrawals are tax-free.
Unlike traditional IRAs, Roth IRAs also have no required minimum distributions (RMDs) during the original owner's lifetime.
The tradeoff is straightforward: You are choosing to pay taxes on retirement money today in exchange for potentially reducing taxes on that money in the future.
Whether that tradeoff makes sense depends on several factors, including your current tax rate, expected future tax rates, retirement income needs, investment horizon, and estate goals.
Why November Is a Good Time to Evaluate a Roth Conversion
Earlier in the year, there may still be considerable uncertainty around bonuses, business income, capital gains, charitable contributions, and other items that affect your tax return.
By November, much of that uncertainty has usually narrowed.
At Omaha Wealth Management, we use tax planning software to estimate what a client's current-year tax return may look like and compare scenarios with no conversion, a partial conversion, or a larger conversion.
Rather than making the decision based on a general rule, we can evaluate how each scenario may affect federal and state taxes, deductions, Medicare premiums, and other income-sensitive considerations.
For someone who recently retired, had a lower-income year, experienced a change in business income, or is approaching RMDs, this analysis can be especially valuable.
Timing matters: A Roth conversion intended to be taxable in 2026 generally needs to be completed by December 31, 2026. Unlike certain IRA contributions, it cannot simply be designated for the previous year when filing a tax return the following spring.
1. Tax Bracket Management: The Starting Point
One of the most common Roth conversion strategies is converting enough money to use a favorable tax bracket without unnecessarily pushing additional income into a higher one.
For example, in 2026, married couples filing jointly are in the 22% federal ordinary income tax bracket for taxable income above $100,800 and up to $211,400.
Suppose a married couple expects to finish 2026 with $190,000 of taxable income before considering a Roth conversion.
No conversion: Their projected taxable income remains $190,000.
$20,000 conversion: Their taxable income could increase to approximately $210,000, still within the 22% bracket.
$40,000 conversion: Their taxable income could increase to approximately $230,000, pushing part of the conversion into the 24% bracket.
These simplified examples assume no other tax calculations change, which is often not the case in practice.
The important question is not necessarily whether to avoid the 24% bracket. It is whether paying taxes at today's rates makes sense compared with the rates the couple might face later.
For someone with substantial traditional IRA balances, future RMDs, pension income, or a surviving spouse who may eventually file as a single taxpayer, paying some taxes today could still be beneficial.
But there is another layer to this decision that often gets overlooked.
2. Your Actual Tax Cost May Be Higher Than Your Tax Bracket
A Roth conversion increases adjusted gross income to the extent the conversion is taxable. That income can affect other portions of your tax return, sometimes creating a higher effective tax cost than your federal marginal bracket alone would suggest.
This is why simply converting enough to fill a tax bracket does not always produce the best result.
The New Senior Deduction and Income Phaseouts
For tax years 2025 through 2028, eligible individuals age 65 and older may qualify for an additional deduction of up to $6,000 per person, or $12,000 for married couples filing jointly if both spouses qualify.
However, the deduction begins phasing out when modified adjusted gross income exceeds $75,000 for individuals or $150,000 for married couples filing jointly.
A Roth conversion could increase income enough to reduce this deduction.
For someone in the phaseout range, the tax cost of converting additional dollars may therefore be higher than their stated marginal income tax rate.
Other income-sensitive deductions, credits, and surtaxes can create similar complications depending on a taxpayer's circumstances.
The lesson is that taxable income and adjusted gross income are both important, but they answer different questions. Tax brackets generally depend on taxable income, while many other tax provisions use AGI or a modified version of AGI.
That distinction can make a meaningful difference when deciding how much to convert.
3. Roth Conversions Can Affect the Taxation of Social Security
Another consideration for retirees is how Roth conversions interact with Social Security benefits.
Depending on income, up to 85% of Social Security benefits may be included in taxable income. This does not mean the benefits are taxed at an 85% rate. Rather, it means that as much as 85% of the benefits may become subject to regular income tax.
The calculation uses a measure commonly called combined income, which includes adjusted gross income, tax-exempt interest, and half of Social Security benefits.
Because a Roth conversion increases income, it may cause a larger portion of Social Security benefits to become taxable.
For example, a retiree who converts an additional $20,000 may find that the increase in taxable income is greater than $20,000 because more Social Security benefits are also included in taxable income.
This can produce a higher effective marginal tax rate than anticipated.
For some retirees, the better opportunity may occur in the years after retirement but before Social Security benefits begin. In other situations, a conversion can still make sense after Social Security starts, but the interaction should be modeled rather than overlooked.
4. Medicare Premiums Can Be an Important Factor
Medicare adds another consideration, particularly for retirees with larger investment portfolios or traditional IRA balances.
Medicare Parts B and D use income-related monthly adjustment amounts, commonly called IRMAA, to determine whether higher-income beneficiaries pay additional premiums.
These adjustments are generally based on modified adjusted gross income reported on a tax return from two years earlier.
That means a Roth conversion completed in 2026 could affect Medicare premiums in 2028.
For some taxpayers, a relatively small increase in income can move them across an IRMAA threshold, resulting in higher premiums. This is particularly important when both spouses are on Medicare because the added cost may affect each person's premiums.
However, avoiding IRMAA at all costs is not necessarily the best long-term strategy. Sometimes paying higher Medicare premiums temporarily may still be worthwhile if a conversion reduces a larger future tax liability.
The objective is to understand the additional cost and include it in the overall comparison.
5. Future RMDs and Estate Planning Matter Too
A Roth conversion is not just a current-year tax decision. It can also change the composition of retirement assets for decades.
Traditional IRA balances generally generate taxable income when distributed. Larger balances can eventually result in substantial required minimum distributions, potentially increasing taxes later in retirement.
Converting a portion of those assets before RMDs begin may reduce future required distributions and create a larger pool of Roth assets available for tax-efficient withdrawals.
Estate planning adds another consideration.
Traditional IRA assets inherited by adult children may create significant taxable income when beneficiaries are required to withdraw them, particularly if those children are in their highest earning years.
Roth IRA assets can offer more favorable income tax treatment for heirs when distribution requirements are met, although inherited Roth IRAs remain subject to beneficiary distribution rules.
This does not mean every traditional IRA should be converted. The tax rates paid by the original owner, the expected tax rates of beneficiaries, charitable intentions, and future spending needs all matter.
The most useful comparison may not be your current tax rate versus your own retirement tax rate. It may involve the combined tax consequences for you, your spouse, and eventually your beneficiaries.
6. When Might a Roth Conversion Not Make Sense?
Roth conversions are not automatically beneficial, even when someone has substantial retirement assets.
There are several situations where waiting or converting less may be appropriate:
Current income is unusually high, with lower tax rates expected in future years.
A conversion would create significant deduction phaseouts or Medicare premium increases.
Paying the conversion tax would require using retirement assets or reducing important cash reserves.
The converted assets are likely to be needed in the near future.
Charitable giving strategies or other future uses of traditional IRA assets may offer better tax treatment.
Even when a Roth conversion appears attractive over the long term, converting too much in a single year can unnecessarily increase the current tax bill.
This is one reason we often look at partial Roth conversions spread across multiple years rather than treating the decision as all-or-nothing.
How Much Should You Convert in 2026?
This is where scenario analysis becomes particularly useful.
A good starting point is to compare a projected tax return with no Roth conversion against several possible conversion amounts.
For each scenario, it helps to evaluate:
Current-year income taxes: How much additional federal and state tax would the conversion create?
Deduction and credit phaseouts: Would the additional income reduce any tax benefits?
Social Security and Medicare: Would the conversion increase taxable benefits or future premiums?
Long-term retirement taxes: Could the conversion reduce future RMDs or improve withdrawal flexibility?
Estate considerations: Would converting assets improve the after-tax outcome for a surviving spouse or beneficiaries?
The answers may point toward a larger conversion, a smaller conversion, or no conversion at all.
It is also important to coordinate the actual transaction with the tax analysis. Roth conversions completed under current law generally cannot be reversed through recharacterization, and any required minimum distribution for the year must be satisfied before converting other eligible IRA assets.
If an IRA contains previously taxed, nondeductible contributions, additional calculations are needed to determine the taxable portion of the conversion.
Roth Conversion FAQs
Is 2026 a good year to do a Roth conversion?
Possibly. A Roth conversion may be especially attractive during a temporarily lower-income year, after retirement but before RMDs begin, or when future tax rates are expected to be equal to or higher than current rates. The decision should also account for Medicare premiums, deduction phaseouts, cash needs, and estate goals.
Can I convert to a Roth IRA if my income is too high to contribute directly?
Yes. The income limits that apply to direct Roth IRA contributions do not generally prevent an individual from completing a Roth conversion. However, the taxable portion of the conversion increases current-year income, which may make converting less attractive in higher-income years.
Will a Roth conversion increase my Medicare premiums?
It can. Medicare generally looks at modified adjusted gross income from two years earlier when determining IRMAA. A taxable Roth conversion in 2026 could therefore affect premiums in 2028 if the resulting income exceeds the applicable thresholds.
Should I convert enough to fill my current tax bracket?
Not necessarily. Filling a tax bracket can be a reasonable starting point, but the optimal amount may be lower or higher after accounting for Social Security taxation, Medicare premiums, deduction phaseouts, future tax rates, and estate considerations.
Can I undo a Roth conversion if my income ends up higher than expected?
Generally, no. Roth conversions completed after 2017 cannot be recharacterized back into traditional IRAs. That makes reviewing income estimates and coordinating the conversion before year-end especially important.
Can I convert only part of my IRA?
Yes. Roth conversions do not have to involve the entire account. Partial conversions can help spread taxable income across multiple years and provide greater control over the timing of taxes.
Final Thought: The Best Roth Conversion Decision Starts With the Numbers
There is no single answer to whether someone should complete a Roth conversion in 2026.
For some, this may be an excellent opportunity to pay taxes at favorable rates and reduce future retirement taxes. For others, the interaction with Social Security, Medicare, deductions, or current income levels may make a smaller conversion or waiting until another year more appropriate.
As we approach the end of 2026, the advantage is that we have a clearer picture of the year and still have time to evaluate the options.
At Omaha Wealth Management, we believe tax decisions are most valuable when they are coordinated with the rest of the financial picture, including investments, retirement income, cash flow, and estate goals.
Rather than assuming a Roth conversion is always a good idea, the better approach is to compare the scenarios and understand the tradeoffs before deciding.
Sometimes the best strategy is to convert. Sometimes it is to convert less. And sometimes the right decision is to wait.
The important part is making that decision intentionally.
This article is for educational purposes only and is not individualized tax, investment, or legal advice. Tax rules, income thresholds, and individual circumstances can affect the outcome. Consult your financial and tax professionals before implementing a Roth conversion.
Additional resources:IRS — Traditional and Roth IRA conversion guidance | IRS — 2026 tax provisions | Social Security Administration — Medicare income adjustments
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