What Is a Roth IRA Conversion and Should I Do One?

The amount converted is added to your taxable income in the year of the conversion, meaning you pay taxes on it now in exchange for tax-free growth and withdrawals going forward. There are no income limits on Roth conversions, making them accessible to high earners who cannot contribute directly to a Roth IRA. Conversions are particularly powerful during years when your income is temporarily lower, such as the gap between retirement and when you begin taking Social Security or RMDs. Converting pre-tax funds in those lower-income years can reduce your future RMD burden, lower lifetime taxes, and shrink the portion of your Social Security benefits subject to tax. Roth accounts also pass to heirs income-tax-free, making them a valuable estate planning tool. Whether a Roth conversion makes sense depends on your current and projected future tax brackets, timeline, and overall financial plan.

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