Every fall, the question comes up in one form or another: should I convert some of my retirement plan balance to a Roth IRA before the year ends? For years, the answer was tangled up with a ticking clock. The Tax Cuts and Jobs Act rates were scheduled to expire after 2025, and advisors everywhere were nudging clients to convert while rates were still low.
That clock stopped. The One Big Beautiful Bill Act(OBBBA), signed into law in 2025, made the current tax rates permanent. The urgency that once drove Roth conversion conversations is gone. But that does not mean the strategy itself lost its value. It means the decision now rests on your own financial picture rather than a looming deadline, which is actually a better place to make this call from.
What a Roth Conversion Actually Does
A Roth conversion moves money from a pre-tax account, such as a 403(b), 401(k), or traditional IRA, into a Roth IRA. You pay ordinary income tax on the amount converted in the year you convert it. In exchange, that money grows tax-free going forward, and qualified withdrawals in retirement are tax-free too. Roth IRAs also are not subject to Required Minimum Distributions during your lifetime, which matters more than people realize once you see how RMDs interact with everything else in your return.
For professionals, this often comes up around a 403(b) balance built up over a long career with TIAA or Fidelity. If you have spent two or three decades contributing to an employer-sponsored retirement plan, you may be sitting on a substantial pre-tax balance that will eventually generate large RMDs and a correspondingly large tax bill.
Why the 2026 Rate Deadline No Longer Applies
Before OBBBA, the calendar had a built-in argument for converting sooner rather than later. Tax rates were set to reset higher in 2026, so converting at 2025’s lower rates looked like a bargain. OBBBA made the current bracket structure permanent, so there is no scheduled rate increase to plan around anymore.
The 2026 federal income tax brackets reflect this. For married couples filing jointly, the 22% bracket runs from $100,801 to $211,400, and the 24% bracket runs from $211,401 to $403,550. For single filers, the 22% bracket runs from $50,401 to $105,700, and the 24% bracket runs from $105,701 to $201,775. These numbers move a little each year for inflation, but the structure itself is no longer at risk of expiring.
That is a meaningful shift in how to think about this decision. Converting is no longer about beating a deadline. It is about whether moving money into a Roth IRA improves your specific lifetime tax picture.
What Still Makes a Roth Conversion Worth Considering
Your own income curve matters more than the calendar. If you are retired or partially retired and your income is temporarily lower than it will be once Social Security and RMDs kick in, you may be sitting in a lower bracket right now than you will occupy later. Converting during that window lets you pay tax at today’s lower rate rather than a higher rate down the road. This is especially relevant in the years between retiring and starting Social Security or RMDs, when income often dips.
RMDs are still coming, and they are bigger than people expect. Under SECURE 2.0, your first RMD is required at age 73 if you were born between 1951 and 1959, or at age 75 if you were born in 1960 or later. Decades of 403(b) contributions and growth can add up to a large balance by then, and the IRS requires you to withdraw a percentage of it every year whether you need the income or not. Those withdrawals count as ordinary income and can push you into a higher bracket than you expected. Converting some of that balance earlier, in smaller amounts, can reduce the future RMD and the tax bill that comes with it.
A temporary senior deduction adds a window worth knowing about. For 2025 through 2028, taxpayers 65 and older can claim an additional deduction of up to $6,000 per person, or $12,000 for a married couple both 65 or older, subject to income limits. Because this deduction is temporary, some professionals approaching or past 65 may find these four years offer a particularly efficient time to convert, since the deduction offsets some of the taxable income the conversion creates.
Watch Medicare IRMAA thresholds closely. This is where a Roth conversion can backfire if it is not planned carefully. Medicare’s Income-Related Monthly Adjustment Amount uses your modified adjusted gross income from two years earlier to determine your Part B and Part D premiums. For 2026, the first IRMAA tier applies once modified adjusted gross income exceeds $109,000 for single filers or $218,000 for married couples filing jointly. Crossing that threshold, even by a small amount, does not incur a small penalty. It applies the full surcharge to your Medicare premium for the entire year, for both spouses on a joint return. A conversion that looks appealing on paper can trigger an IRMAA surcharge that erases much of the benefit, so this needs to be modeled before you convert, not discovered afterward.
Estate and legacy goals can tip the decision. If leaving retirement assets to children or grandchildren is part of your plan, a Roth IRA is often a more favorable asset to pass down than a traditional account. Beneficiaries of inherited Roth IRAs still generally must empty the account within ten years, but the withdrawals are tax-free rather than taxable, which can matter a great deal if your beneficiaries are in their peak earning years.
Who Might Want to Pause
Not every situation calls for a conversion this year. If you are still working and in your peak earning years, converting now likely means paying tax at a higher rate than you would in retirement, which usually defeats the purpose. If your only reason for considering a conversion was the tax increase that never happened, there may be no urgency at all. And if paying the conversion tax would require pulling funds from the IRA itself rather than from outside savings, the math often does not work in your favor, since that reduces the amount left to grow tax-free.
Making the Decision That Fits Your Situation
A Roth conversion is not a single, one-time decision so much as an ongoing strategy that can be adjusted year by year based on your income, your tax bracket, your Medicare timeline, and your goals for the money. The right amount to convert this year might differ from the right amount next year, and modeling the IRMAA impact alongside the tax bracket impact requires some care.
If you are within a few years of retirement, recently retired, or approaching age 73, this is worth a closer look before year-end while there is still time to act on 2026 numbers. Our team can walk through your specific 403(b) or 401(k) balances, your projected RMDs, and your Medicare timeline together to determine whether a conversion makes sense for you this year and, if so, how much.
Schedule a consultation with our team to review your situation before December 31.