For investors with significant assets in traditional IRAs or 401(k)s, a Roth conversion is one of the most powerful — and most misunderstood — tools in long-term financial planning. It’s not right for everyone, and it’s not right every year. But April, with last year’s tax return freshly filed and the full year ahead still open, is one of the best times to evaluate whether it makes sense now.
What a Roth Conversion Actually Does
A Roth conversion moves money from a pre-tax retirement account — a traditional IRA, SEP IRA, or 401(k) — into a Roth IRA. The converted amount is added to your taxable income in the year of conversion, meaning you pay taxes on it today. In exchange, that money grows tax-free and can be withdrawn tax-free in retirement. Roth accounts are also not subject to required minimum distributions during the account owner’s lifetime, which gives considerably more flexibility in managing taxable income in later years. ¹
The core question is simple: will your tax rate be higher now, or later? If you expect to be in a higher bracket in the future, because of growing RMDs, a large inheritance, or anticipated tax law changes, paying taxes today at a known rate can be a sound trade.
Why April Is a Natural Starting Point
Evaluating a Roth conversion requires knowing where your income is likely to land for the year. In April, you have a complete picture of last year’s income and a reasonable sense of what this year may look like. That context matters enormously: the converted amount is stacked on top of your existing 2026 income, and converting too much can push you into a higher bracket or trigger Medicare IRMAA surcharges two years out. ²
The retirement years before RMDs begin are often described as the optimal conversion window, a period when earned income has dropped but required distributions haven’t yet started, creating a lower-income stretch that may not last long.³ For clients in that window now, 2026 may represent one of the better opportunities in a multi-year conversion plan.
What the Current Tax Environment Adds
The tax legislation passed in July 2025 permanently extended the current seven-bracket structure and made rates that had been scheduled to expire a permanent feature of the tax code.⁴ That removes one source of prior uncertainty — the fear that rates might rise dramatically in 2026 due to expiring provisions — but it doesn’t eliminate the case for conversion. RMDs, Social Security taxation, and IRMAA surcharges remain powerful reasons for many retirees to consider reducing pre-tax balances over time, regardless of the broader rate environment.
A Multi-Year Strategy Often Beats a Single Decision
One of the most effective approaches is a systematic, multi-year conversion plan: converting just enough each year to fill the top of a target bracket, typically 22% or 24%, without spilling into a higher one.⁵ This approach spreads the tax cost across several years, reduces the risk of a single large conversion causing unintended consequences, and builds Roth assets gradually over time.
There are also important considerations that can complicate the math: the pro-rata rule, which affects how taxes are calculated when you hold both pre-tax and after-tax IRA funds; the five-year holding period for converted amounts; and the interaction between conversion income and deductions that phase out at higher income levels.⁶ These are the kinds of details that make this a conversation to have with an advisor, not a decision to make in isolation.
Bottom Line: A Roth conversion is a planning strategy. April provides the information and the runway to evaluate whether this year presents an opportunity. If you have significant pre-tax retirement assets, now is a good time to ask your advisor whether a conversion or the start of a multi-year plan belongs in your 2026 picture.
Sources:
[1] https://investor.vanguard.com/investor-resources-education/iras/ira-roth-conversion
[2] https://www.sdocpa.com/roth-conversion-strategies/
[3] https://www.schwab.com/learn/story/why-consider-roth-ira-conversion-and-how-to-do-it
[4] https://taxfoundation.org/data/all/federal/2026-tax-brackets/
[5] https://www.sdocpa.com/roth-conversion-strategies/
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