Should High Income Earners Do Roth Conversions?

The most common version of this question I hear goes something like: "I'm in the 37% bracket now. Why would I convert and pay tax today when I might be in a lower bracket later?" It's a reasonable instinct. It's also, in most cases, the wrong frame.

The Real Question Isn't Your Bracket Today

A Roth conversion isn't a bet on where rates go. It's a bet on the spread between now and later, and for high earners, that spread is rarely as wide as it looks.

Here's why. The assumption behind "I'll be in a lower bracket in retirement" holds when your income drops sharply and stays there. But for many high earners, that's not what actually happens. Required minimum distributions (RMDs) start at age 73. A 30-year career of maxing out a 401(k), absorbing employer matches, and rolling over old plans can produce a pre-tax balance in the $2 to $4 million range. At a 4% RMD rate on $3 million, that's $120,000 forced out as ordinary income every year, before Social Security, before any pension, before any other source. The "lower bracket later" story collapses under the weight of what has accumulated.

The conversion calculus, then, isn't about today's bracket versus a guessed future bracket. It's about which years offer a genuine window where the math actually favors paying the tax now.

The Rules, the Traps, and the Real Tradeoffs

There is no income limit on Roth conversions. Anyone, at any income level, can convert pre-tax retirement assets to a Roth IRA by paying ordinary income tax on the converted amount in the year of the conversion. That part is simple.

The traps are subtler.

IRMAA. Medicare Part B and Part D premiums are means-tested, using a two-year lookback on your modified adjusted gross income. In 2026, the income thresholds that trigger the first IRMAA surcharge start at $106,000 (single) and $212,000 (married filing jointly). A large conversion the year you turn 63 can show up as a Medicare surcharge at 65. That is not a reason to never convert. It is a reason to size conversions carefully.

The 5-year rule. Roth IRAs have two distinct 5-year clocks. The first governs when earnings can be withdrawn tax-free (starts with the first Roth IRA contribution or conversion). The second, often overlooked, applies to each individual conversion: the converted principal cannot be withdrawn penalty-free until five years have passed, unless you are 59½ or older. If you are converting in your 50s with no immediate plans to touch the money, this is rarely an issue. If you are converting in your early 60s as a bridge income strategy, the sequencing matters.

The opportunity cost of the tax payment. The math on a Roth conversion only works in your favor if the tax is paid from outside the account, not withheld from the converted amount. Paying the tax from a taxable account preserves the full converted balance to compound inside the Roth. Funding the tax bill by shrinking the conversion itself is one of the most common ways the benefit gets eroded.

State income tax. If you live in a high-income-tax state now and plan to retire in a no-income-tax state, converting today has an added cost that a future withdrawal would not. The geography of where you live at conversion versus retirement matters and is frequently ignored.

An Illustrative Example: When the Window Opens

Consider a hypothetical client. Married, both professionals, late 50s. Combined W-2 income around $750,000 annually during their working years. They retire at 62. Between 62 and the start of Social Security at 70, their taxable income drops to roughly $120,000 from a mix of portfolio withdrawals and a small pension.

In that window, the top of the 22% bracket (married filing jointly in 2026) runs to approximately $201,050. If they target conversions up to $201,050 of total income, they are paying 22% on dollars that would otherwise be taxed at 32% or higher once RMDs begin at 73. On a $400,000 conversion spread over two years, the bracket-rate differential alone represents roughly $40,000 in present-value tax savings, before accounting for decades of tax-free compounding on the converted balance.

The window is real. But it requires knowing in advance that it will open, and planning the retirement income structure to take advantage of it. That is not something you optimize in the year it happens.

How This Connects to Roth Conversions Broadly

The question of whether to convert is actually the easy part. The harder part is building a plan that knows when the window will appear, sizes the conversions correctly across multiple years, and avoids the side effects (IRMAA, ACA subsidy cliffs, state tax inefficiency) that quietly erode the benefit.

That broader framework, including how the bracket math actually works, the multi-year conversion schedule, and the full list of watchouts, is covered in the parent pillar: Roth Conversion: A Practical Guide for High Earners and Pre-Retirees.

Within the Sporos framework, Roth conversions sit in what we call the Soil layer of the plan: the tax architecture that determines how much of your return you actually keep. The most common mistake I see is treating a conversion as a one-time decision rather than a multi-year design problem. The Soil is laid years before you need it.

Frequently Asked Questions

Is there an income limit on Roth conversions in 2026?

No. Roth conversions have no income limit. You pay ordinary income tax on the converted amount in the year of conversion, regardless of your income level. The income limit (in 2026, $236,000 for married filing jointly) applies only to direct Roth IRA contributions, not conversions.

If I'm in the 37% bracket, does a Roth conversion ever make sense?

It can, but not during a high-income working year. The logic applies in transition years, early retirement, or when a one-time income event temporarily reduces your taxable income. Converting at 37% into a future 22% environment is rarely the right trade. Converting at 22% into a future 32-37% environment usually is.

What happens if I convert too much and push into IRMAA?

The surcharge applies to that Medicare year. It does not undo the conversion. In most cases, a modest IRMAA surcharge does not eliminate the long-run benefit of a well-sized conversion. But it is a real cost, and the two-year lookback means you need to model this two years ahead, not retroactively.

Does my spouse need their own Roth IRA for the 5-year clock to apply separately?

Yes. Each Roth IRA owner has their own 5-year clock. If your spouse has never held a Roth IRA and you open one via conversion today, their clock starts in the year of that first conversion, independent of yours.

Should I convert even if I plan to leave the money to heirs?

Often yes, and sometimes this is the strongest argument for converting. Under the SECURE 2.0 Act, most non-spouse beneficiaries must empty inherited IRAs within 10 years. A large inherited pre-tax IRA can force your heirs into high brackets during their peak earning years. A Roth IRA passes income-tax-free and without RMDs during the original owner's lifetime.

What to Do Next

1. Pull your current pre-tax retirement balance and estimate what your RMD at 73 would look like under current law. If it would push you above the 24% bracket, you have a conversion case worth modeling.
2. Identify any gap years between your planned retirement date and RMD onset or Social Security commencement. Those are the years to examine first.
3. Before converting, check IRMAA thresholds for the year you turn 65 and work backward two years. Size conversions with that ceiling in mind.
4. If you want a second opinion on whether the math works in your specific situation, the next step is a conversation about fit, not a product pitch.

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The information provided is for educational purposes only and does not constitute investment, legal, or tax advice. Tax law changes frequently — verify current rules before acting. Consult with qualified professionals for guidance specific to your situation.