Roth Conversion Pros and Cons

A Roth conversion moves pre-tax IRA money into a Roth IRA and adds the taxable amount to that year's income. Potential advantages include tax-free qualified withdrawals and no required minimum distributions for the original owner. Potential drawbacks include a larger tax bill now, possible Medicare premium and Social Security tax effects, and needing cash to pay the tax.

Last updated October 10, 2026 (originally published July 28, 2023). As of October 10, 2026, the IRS describes a conversion as taxing any previously untaxed amounts moved from a traditional IRA, and it treats the early-withdrawal rules for converted money separately from the rules for qualified Roth distributions.[1][2] This guide is educational and is not a recommendation to convert. Individual circumstances vary, and conversion decisions should be coordinated with your tax professional.

What Is a Roth Conversion?

A Roth conversion refers to moving money from a traditional IRA into a Roth IRA. Traditional IRA money is generally pre-tax, so distributions are generally taxed as ordinary income. A Roth IRA is funded with after-tax dollars, and the IRS says qualified distributions from a Roth IRA are tax-free if the requirements are met.[1][3]

The IRS also says the original owner of a Roth IRA does not have to take required minimum distributions during their lifetime, which is a difference from a traditional IRA.[1]

If a required withdrawal applies to your account, the RMD itself is not eligible for conversion. Our RMD and Roth conversion explainer addresses how a separate conversion may be considered in the same year.

Roth Conversion Pros and Cons

Each potential advantage below comes with a limitation. Whether the trade-off is favorable depends on your income, your timeline, and rules that can change, so none of these points is a recommendation.

Potential advantage: qualified withdrawals may be tax-free

Money in a Roth IRA can be withdrawn tax-free if the distribution is qualified.[1]

Limitation: The conversion itself is taxable. The IRS says a conversion results in taxation of any untaxed amounts in the traditional IRA, so the converted amount is added to income for the year of the conversion and could push a household into a higher tax bracket.[2] A distribution is qualified only if it meets the five-year and age or other conditions described below, and how future withdrawals are taxed depends on the rules in effect at that time.[1]

Potential advantage: no required minimum distributions for the original Roth owner

Converted money that stays in a Roth IRA is not subject to lifetime RMDs for the original owner.[1]

Limitation: A conversion does not remove RMDs from the traditional IRAs and workplace plans that remain. A Roth IRA's beneficiaries may have to take distributions after the owner's death.[1]

Potential advantage: a more flexible mix of account types in retirement

Holding pre-tax, Roth and taxable accounts may give a household more choices about which account to draw from in a given year.

Limitation: A conversion generally cannot be undone. The IRS says that for conversions made on or after January 1, 2018, recharacterization is not allowed.[2] If the tax bill turns out larger than expected, the conversion stands.

Potential advantage: the option to convert in years with lower taxable income

Some households have years between retirement and the start of RMDs when taxable income is lower. A conversion in those years may be taxed differently than a conversion made during peak earning years.

Limitation: Added income can have effects beyond the tax bracket. Social Security uses an earlier tax return to set income-related Medicare premium adjustments, so a conversion may affect Medicare Part B and Part D premiums in a later year.[4] The SSA also says federal income tax may apply to Social Security benefits when combined income exceeds certain levels, so a conversion may increase the taxable share of benefits.[5]

Potential advantage: paying the tax from outside the IRA keeps the full amount invested in the Roth

When the tax is paid with cash from a taxable account, the entire converted amount can stay in the Roth IRA.

Limitation: This requires cash outside the IRA. Using part of the IRA to cover the tax means that portion is a distribution rather than a conversion. If you are under age 59 1/2, the IRS says an early distribution may be subject to a 10% additional tax, unless an exception applies.[1][6]

The Five-Year Rules, Stated Accurately

An older version of this article said converted money must stay in the Roth IRA for five years or face a 10 percent penalty. That shorthand oversimplifies. IRS Publication 590-B describes two separate five-year rules, and the age 59 1/2 rule interacts with both.[1]

1. The conversion rule (early-distribution tax). If you take a distribution from a Roth IRA within the five-year period that starts on the first day of the tax year in which you made a conversion, you may have to pay the 10% additional tax on the part of the converted amount that was included in income. A separate five-year period applies to each conversion.[1] The IRS describes this as an additional tax on early distributions, which are generally distributions before age 59 1/2, and exceptions exist.[1][6] A distribution of converted money after age 59 1/2 generally is not subject to the 10% additional tax.

2. The qualified-distribution rule (tax-free earnings). A Roth IRA distribution is qualified when it is made after the five-year period that begins with the first tax year for which a contribution was made to a Roth IRA set up for you, and it is made on or after age 59 1/2, because of disability, to a beneficiary or estate after death, or under the first-home exception (up to a $10,000 lifetime limit).[1] This period is counted once for your Roth IRAs, not separately for each conversion.

Reaching age 59 1/2 therefore addresses the age condition and generally the 10% additional tax on early distributions, but it does not by itself settle whether earnings are tax-free if the qualified-distribution five-year period has not been met. Your custodian and tax professional can confirm how these dates apply to your accounts.

Other Considerations Before Converting

• Timeline to retirement. If you expect to need the money soon, the five-year and age rules above may affect which dollars you can access without additional tax. A longer time horizon gives those rules less practical effect.
• Tax payment source. Confirm in advance where the cash for the tax will come from, including any estimated tax payments, so the plan does not depend on taking money out of the IRA.
• Future tax rates. A conversion trades a known tax now for a possible tax difference later. Future rates and rules are uncertain, and income in later years may be higher or lower than expected.
• How much and when. Some households convert a portion at a time across several years rather than in one lump sum, which changes how much income is recognized in any single year. Whether that fits depends on your full tax picture. For the larger transition from paychecks to withdrawals, see Tax Planning To and Through Early Retirement.

Questions to Bring to a Planning Conversation

• How much additional taxable income would a conversion add this year, and what else could change that year's tax picture?
• Could the added income affect Medicare premiums or the taxable share of Social Security benefits?
• Where would the cash for the tax come from?
• When would I expect to need the converted money, and how do the five-year and age rules apply?
• What needs to be confirmed with my custodian and tax professional before any transaction?

Start With a Conversation

The firm's tax planning service looks at conversions alongside withdrawals, Social Security and Medicare, and the who-i-help page describes the households it works with. You can also review how the firm charges for advice. If you would like to talk through your situation, start with a conversation. It is a 30-minute introductory call, and nothing in this article is a recommendation to convert.

Sources

All sources accessed October 10, 2026.

1. IRS, Publication 590-B (2025), Distributions from Individual Retirement Arrangements (IRAs), Table I-2 and chapter 2 (Roth IRAs: qualified distributions, additional tax on early distributions, and distributions of conversion contributions within the five-year period); 2025 edition for use in preparing 2025 returns.
2. IRS, Retirement plans FAQs regarding IRAs, sections "Rollovers and Roth conversions" and "Recharacterization of IRA contributions."
3. IRS, Roth IRAs.
4. Social Security Administration, Premiums: Rules for Higher-Income Beneficiaries, 2026 premium guidance.
5. Social Security Administration, Request to withhold taxes, describing federal income tax on Social Security benefits.
6. IRS, Retirement topics: Exceptions to tax on early distributions.