Question 1

What is a Roth conversion?

Accepted Answer

A Roth conversion moves money from a pre-tax retirement account, such as a traditional IRA or 401(k), into a Roth IRA. You pay ordinary income tax on the converted amount in the year you convert. In exchange, the money grows tax-free afterward and qualified withdrawals in retirement are not taxed.

Question 2

When does a Roth conversion make sense?

Accepted Answer

A conversion tends to pay off when your tax rate today is lower than the rate you expect to face later. The clearest window is usually between retiring and starting Social Security or required minimum distributions, when earned income has stopped but mandatory withdrawals have not yet begun.

Question 3

Is there a limit on how much I can convert?

Accepted Answer

No. Unlike Roth contributions, conversions have no income limit and no dollar cap. The practical limit is tax: converting a large balance in one year can push you into a higher bracket, so conversions are often spread across several years to fill lower brackets deliberately.

Question 4

Should I pay the conversion tax from the IRA itself?

Accepted Answer

Paying the tax from outside the account is generally better, because every dollar withheld from the conversion is a dollar that stops growing tax-free. If you are under 59½, withholding from the IRA can also trigger a 10% early-withdrawal penalty on the amount used to pay the tax.

Question 5

Can a Roth conversion be undone?

Accepted Answer

No. The Tax Cuts and Jobs Act eliminated recharacterization of conversions from 2018 onward. Once converted, the decision is final for that tax year, which is why the arithmetic is worth running before converting rather than after.

Question 6

How does a Roth conversion affect Medicare premiums?

Accepted Answer

Converted amounts count toward modified adjusted gross income, which determines Medicare Part B and D premiums through IRMAA. Because IRMAA uses a two-year lookback, a conversion can raise premiums two years later. This is a common reason conversions are sized carefully rather than done in one lump.

Should I convert my IRA to a Roth — and how much?

What people ask about this

A calculator gives you a number. It can’t tell you whether to act on it.