Retirement tax · comparison
Roth Conversion vs. Keeping a Traditional IRA
Updated 2026-10-21 · Gregory Garone, CEPA®
Short answer: A conversion tends to pay off when the tax rate you pay today is lower than the rate the money would face later, whether withdrawn by you or by your heirs. It costs more when the conversion pushes income into a higher bracket or a Medicare surcharge than you would face in retirement.
Convert to Roth vs. Keep it traditional, side by side
| Question | Convert to Roth | Keep it traditional |
|---|---|---|
| When tax is paid | Now, as ordinary income in the year converted | Later, as ordinary income when withdrawn |
| Required minimum distributions | None for the original owner of a Roth IRA | Start at age 73, or 75 if born in 1960 or later |
| Effect on Medicare premiums | Can raise IRMAA two years after the conversion year | RMDs can raise IRMAA every year they are large |
| Heirs | Most must still empty it in ten years, but withdrawals are generally tax-free | Withdrawals are taxed at the heir’s rate, often during peak earning years |
| Paying the tax | Works best when the tax is paid from money outside the IRA | No current cash needed |
| Five-year rules | Each conversion has its own five-year clock for penalty-free withdrawal before 59½ | Not applicable |
When each one tends to fit
Convert to Roth may fit when
- You are between retirement and RMD age with unusually low taxable income.
- You expect your future rate, or your heirs’ rate, to be higher than today’s.
- You can pay the conversion tax from a taxable account.
Keep it traditional may fit when
- You are in a high bracket now and expect a lower one in retirement.
- You plan to leave the IRA to charity, which pays no income tax on it.
- A conversion would cross an IRMAA line or the NIIT threshold for little benefit.
An example
Illustration only: a married couple, both 64, have $80,000 of taxable income in 2026. The 12% bracket for joint filers ends at $100,800, so roughly $20,800 could be converted at 12%. Converting up to the top of the 22% bracket ($211,400) would add more, but the higher modified adjusted gross income could also move their 2028 Medicare premiums into a surcharge tier. The decision is about which bracket edge to stop at, not whether to convert all at once.
Questions to bring to your CPA or advisor
- What bracket will our RMDs land in at 75, assuming today’s balances keep growing?
- Which IRMAA line are we closest to two years from now?
- Do we have cash outside the IRA to pay the tax?
- Who will inherit this account, and what is their likely tax rate?
Common questions
Can I undo a Roth conversion?
No. Recharacterizing a conversion has not been allowed since 2018, so the amount converted is taxable in the year it is converted.
Is there an income limit for Roth conversions?
No. Anyone with a traditional IRA can convert regardless of income. Income limits apply to direct Roth IRA contributions, not to conversions.
Does a Roth conversion count toward IRMAA?
Yes. The converted amount is part of modified adjusted gross income, which Medicare uses two years later to set Part B and Part D premiums.
Should I convert all at once or over several years?
Spreading conversions across several lower-income years often keeps each year’s amount in a lower bracket. The right pace depends on your income each year and the thresholds you want to stay under.
Sources and limitations
More comparisons
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