Every fall, many people with a mix of traditional IRA or 401(k) balances and a few years of runway before required distributions kick in. The question is usually some version of: "Should I be converting some of this to a Roth?" The honest answer is: it depends on your numbers, and the last few months of the year are the best time to actually look at them.

Why Timing Matters

A Roth conversion means moving money from a traditional (pre-tax) IRA or 401(k) into a Roth account, paying ordinary income tax on the converted amount now, in exchange for tax-free growth and tax-free withdrawals later. The tax bill is calculated based on your total taxable income for the calendar year — which means the decision gets easier to make correctly once most of the year's income is already known. By September, you typically have a solid read on wages, bonuses, business income, and capital gains for the year. That makes it possible to estimate how much room remains in your current tax bracket before converting pushes you into the next one — and there's still enough time left in the year to process the conversion before the December 31 deadline.

A Simple Illustration

For 2026, a married couple filing jointly moves from the 24% bracket into the 32% bracket at $403,550 of taxable income. If a couple's taxable income is projected to land at $370,000 for the year, they have roughly $33,550 of room to convert before crossing into the higher bracket. Converting an amount that fills the remaining space in your current bracket — rather than guessing at a round number — is the basic mechanic behind most year-end conversion strategies. The specific thresholds differ for single filers (the 24% bracket runs from $105,700 to $201,775 in 2026) and change every year with inflation adjustments, so the math has to be redone annually.

The Case For Converting

The appeal of a Roth conversion is straightforward: if you expect to be in the same or a higher tax bracket in retirement than you are today, paying the tax now can mean a smaller total tax bill over your lifetime. It also removes future required minimum distributions from that converted balance, since Roth IRAs are not subject to RMDs for the original owner. For people with pension income, rental income, or a cross-border income stream that already fills up a good portion of their bracket in retirement, converting during lower-income years — including the years right after selling a business or before Social Security begins — can be a meaningful piece of a longer-term plan.

What Can Go Wrong If You Rush It

A common mistake is treating a conversion as an all-or-nothing decision made in December without checking the full picture. A few things worth flagging before you convert:

  • Medicare IRMAA surcharges. If you or your spouse are on Medicare, your modified adjusted gross income from two years prior determines your Part B and Part D premiums. For 2026, the surcharge begins above $109,000 for single filers and $218,000 for joint filers. A conversion that bumps this year's income can mean higher Medicare premiums two years from now — a cost that's easy to overlook in the moment.
  • The tax bill is due with cash you didn't convert. Paying the conversion tax out of the IRA itself reduces the benefit significantly and, if you're under 59½, can trigger an early withdrawal penalty on the amount used to pay the tax. Ideally, the tax is paid from outside savings.
  • State tax treatment varies. Depending on where you live and, for cross-border families, where you may eventually reside, state and foreign tax treatment of the conversion can differ meaningfully from the federal picture.
  • The five-year rule. Each conversion starts its own five-year clock for penalty-free access to the converted principal if you're under 59½, which matters if you might need the funds sooner than expected.

It's a Multi-Year Decision, Not a Single Event

For most people, a large one-time conversion makes less sense than a series of smaller conversions spread across several years — filling up available room in your current bracket each year without spilling into the next one. That approach also gives you flexibility to adjust as your income, tax law, and family circumstances change. Because 2026 marks the first year under the tax brackets set by recent legislation, and because these thresholds adjust annually, this is worth revisiting every year rather than setting and forgetting a single strategy.

The Bottom Line

A Roth conversion isn't right for everyone, and the right amount to convert depends heavily on your income this year, your expected income in retirement, your Medicare timeline, and your broader tax picture — including any cross-border tax obligations. This is highly individual math, and the details matter. If you haven't run these numbers for this year, the fourth quarter is the window to do it — there's enough of the year's picture in view to make an informed decision, and enough time left to act on it. Consult a qualified tax or legal professional about how a conversion would affect your specific situation before making a decision.

This article is for general educational purposes and does not constitute tax, legal, or individualized financial advice. Tax brackets, Medicare IRMAA thresholds, and conversion rules change annually and depend on your specific circumstances — consult a qualified tax or legal professional before converting.