Explainer
What is a Roth conversion, and how does it work?
By Secure Retirement PlannerUpdated
If you do a Roth conversion, you move money from your traditional IRA, 401(k) or other pre-tax account into a Roth IRA. You pay income tax on the amount you move, for the year you move it. After that, your money can grow and later come out tax-free. A Roth IRA also never makes you take withdrawals during your lifetime.
In 2026 there is no income limit and no dollar limit on your conversions. You can convert a little or a lot, any year you like. Each year's conversion just has to be done by December 31.
Your real question is whether paying tax now beats paying it later, when RMDs, a spouse filing single, or your heirs may face higher rates. This page explains how a conversion works, what it costs you, and the trade-offs.
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The short version
- You pay ordinary income tax on the amount you convert, in the year you convert it.
- Your later withdrawals from the Roth can be tax-free, and your Roth has no required withdrawals for you.
- You can convert at any income. There is no income or dollar limit.
- You can't undo a conversion, so size it before you do it.
- Converting part of your IRA each year is common. It keeps your tax in a lower bracket.
How does a Roth conversion work?
The money in your traditional IRA or 401(k) has usually never been taxed. The IRS collects that tax when you take the money out. A conversion takes your money out and puts it in a Roth IRA, so your tax is due now.
The amount you convert is added to your income for the year. It is taxed at your normal rates. You owe no 10% early withdrawal penalty on the conversion itself, even if you are under 59½. The full amount just has to go into your Roth.
Once your money is in the Roth, your future growth can come out tax-free. The table shows you how the two accounts compare.
| Traditional IRA or 401(k) | Roth IRA | |
|---|---|---|
| Tax on withdrawals | Taxed as ordinary income | Tax-free once the 5-year and age rules are met |
| Required withdrawals (RMDs) | Start at 73, or 75 if born 1960 or later | None for you as the owner |
| Counts toward Medicare IRMAA income | Yes | No, for qualified withdrawals |
| Can make Social Security taxable | Yes | No, for qualified withdrawals |
| Tax for heirs | Taxed as income when they withdraw | Usually tax-free |
Which accounts can I convert to a Roth IRA?
You can convert most of your pre-tax retirement accounts. You don't need earned income, and being retired doesn't stop you.
- Your traditional IRAs, including rollover IRAs.
- Your SEP IRAs, and SIMPLE IRAs once two years have passed since you first joined the SIMPLE plan.
- Your 401(k), 403(b) and governmental 457(b) plans, usually after you leave the job. Some plans also let you convert inside the plan. See 401(k) to Roth IRA.
- Not allowed: an IRA you inherited from someone other than your spouse. If you inherit from your spouse, you can treat the IRA as your own and then convert.
How much tax do you pay on a Roth conversion?
You pay your regular income tax rate on the amount you convert. In 2026, if you are married, your 12% bracket runs up to $100,800 of taxable income and your 22% bracket up to $211,400. If you file single, those lines are $50,400 and $105,700.
So a $20,000 conversion that fits inside your 12% bracket adds about $2,400 in federal tax. The same $20,000 in the 22% bracket adds about $4,400. In retirement, your real cost can be higher. That's because extra income can make more of your Social Security taxable. Our full guide to Tax on a Roth conversion walks you through that.
Why do retirees convert to a Roth?
The main reason is to pay tax at a lower rate now than you, your surviving spouse or your heirs would pay later. These are the most common situations.
- Big required withdrawals ahead: at 73, a $1,000,000 IRA must pay out about $37,736 in the first year (divided by 26.5 under the IRS table). Converting earlier shrinks your payouts.
- Your spouse may be left filing single: a widow or widower usually has a smaller standard deduction and narrower brackets, often on similar income.
- Your heirs: most adult children who inherit an IRA must empty it within 10 years, often in their peak earning years. Roth money is usually tax-free to them.
- Medicare and Social Security: your qualified Roth withdrawals don't count toward Medicare IRMAA surcharges or the tax on your Social Security benefits.
What are the downsides of a Roth conversion?
A conversion is a trade. You pay a known tax bill now for possible tax savings later. It doesn't help everyone.
- You pay tax now, and you can't undo a conversion if you change your mind or the market falls.
- It raises your income this year. That can raise your Medicare premiums two years later. It can also shrink your new $6,000 senior deduction if you are 65 or older.
- If your tax rate later will be lower than today, converting can cost you money.
- Two 5-year rules decide when your money comes out tax-free and penalty-free. See The 5-year rules.
Is it right for you?
Our page on whether a Roth conversion is worth it compares the trade-offs for you with real 2026 numbers: Should I convert to a Roth?.
Example: a 64-year-old converting $20,000
Dan is 64, single and retired. He has $300,000 in a traditional IRA and is waiting until 70 to claim Social Security. His 2026 taxable income, after the $16,100 standard deduction, is about $25,000. It comes from part-time work and IRA withdrawals.
The 12% bracket for single filers ends at $50,400 of taxable income. That gives Dan about $25,400 of room. He converts $20,000. All of it is taxed at 12%, so his federal tax goes up by about $2,400. He pays it from savings so the full $20,000 lands in the Roth.
Because Dan is over 59½ and the money stays in the Roth, there is no penalty. One thing to watch: his 2026 income will set his Medicare premiums in 2028, when he is 66.
If you are retired and waiting to claim Social Security, your low-income years may be your cheapest time to convert. Just keep your amount inside your current bracket and watch the Medicare line.
| Before | After converting $20,000 | |
|---|---|---|
| Traditional IRA | $300,000 | $280,000 |
| Roth IRA | $0 | $20,000 |
| 2026 taxable income | $25,000 | $45,000 |
| Added 2026 federal tax | $0 | about $2,400 (12%) |
Hypothetical example using 2026 federal brackets and the single standard deduction (IRS Rev. Proc. 2025-32). It assumes no Social Security income yet and ignores state tax and investment growth. Your numbers will differ.
Step by step
Open a Roth IRA
If you don't have one, open a Roth IRA. It is often easiest at the same firm that holds your traditional IRA.
Pick an amount
Decide how much you want to convert this year. Most people pick an amount that keeps them inside their current tax bracket.
Ask for a direct conversion
Ask your firm to move the money straight from your traditional IRA to your Roth IRA. If both of your accounts are at the same firm, this is often a short online form.
Decide how to pay the tax
You can pay from your savings or have tax withheld. Paying from savings puts your full amount in the Roth.
Keep the tax forms
Your firm sends Form 1099-R early next year. You also report conversions from an IRA on IRS Form 8606 with your tax return.
Common questions
Is there an income limit for Roth conversions?
No. Anyone can convert, at any income. The income limits you may have heard of apply to Roth IRA contributions, not conversions.
Can I convert to a Roth after I retire?
Yes. You don't need a job or earned income to convert. You can convert in the years between retiring and starting your required withdrawals.
Do I pay a penalty if I'm under 59½?
Not on the conversion itself, if the full amount goes into the Roth. Tax withheld from the conversion is treated as a withdrawal and can owe the 10% penalty if you're under 59½.
Do I have to convert my whole IRA?
No. You can convert any part of it. You can convert a set amount each year to keep your tax in a lower bracket.
Can I convert my required minimum distribution?
No. In a year you owe an RMD, that amount must come out first and be taxed to you. You can convert more after that.
Can I undo a Roth conversion?
No. Recharacterizing (undoing) a conversion has not been allowed for conversions made in 2018 or later.
What tax form shows a Roth conversion?
Your IRA firm sends Form 1099-R. You report a conversion from an IRA on Form 8606, Part II, and the totals carry to your Form 1040.
Sources
Facts on this page were last checked on November 9, 2026.
- IRS Publication 590-A (2025), Contributions to IRAs · Conversion methods, RMDs can't be converted, no recharacterization after 2017, inherited IRA limits, SIMPLE 2-year rule. Read Nov 9, 2026.
- IRS Publication 590-B (2025), Distributions from IRAs · No lifetime RMDs for Roth owners, qualified distributions, Uniform Lifetime Table divisor 26.5 at 73. Read Nov 9, 2026.
- IRS Rev. Proc. 2025-32 (2026 inflation adjustments) · 2026 brackets and standard deduction. Read Nov 9, 2026.
- IRS Instructions for Form 8606 (2025) · How conversions from traditional, SEP and SIMPLE IRAs are reported. Read Nov 9, 2026.
- IRS Publication 915 (2025), Social Security and Equivalent Railroad Retirement Benefits · How other income makes Social Security benefits taxable. Read Nov 9, 2026.
- 26 U.S.C. 401(a)(9)(C)(v), applicable age for RMDs · RMDs start at 73, or 75 for people born 1960 or later. Read Nov 9, 2026.
Who wrote this
This guide was written and fact-checked by the Secure Retirement Planner editorial team using IRS, CMS and Social Security sources listed above. We update guides when the law or yearly limits change. How we research.