Should High Income Earners Do Roth Conversions?

Not while you're in the 37% bracket, and often yes in the lower-income windows around your peak years. Converting at 37% to dodge a possible 22% later is a losing trade; converting at 22% or 24% in early retirement, before RMDs and Social Security stack up, is usually a winning one. There is no income limit on conversions. The question is whether the right year has arrived.

Why "Lower Bracket Later" Often Fails

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

Required minimum distributions start at age 73, and a 30-year career of maxed 401(k)s, employer matches, and rollovers can produce a pre-tax balance of $2 to $4 million. At a 4% RMD rate on $3 million, that's $120,000 forced out as ordinary income every year, before Social Security or any pension. The "lower bracket later" story collapses under what has accumulated. The real calculus is which years offer a genuine window where paying the tax now wins.

The Rules and the Traps

Anyone, at any income, can convert pre-tax retirement assets to a Roth IRA by paying ordinary income tax on the converted amount that year. That part is simple. The traps are subtler.

IRMAA. Medicare premiums are means-tested with a two-year lookback. In 2026, the first surcharge starts at $106,000 (single) and $212,000 (married filing jointly), so a large conversion the year you turn 63 can show up as a Medicare surcharge at 65.

The 5-year rules. One clock governs tax-free withdrawal of earnings. A second applies to each individual conversion: converted principal cannot come out penalty-free for five years unless you are 59½ or older. It matters if you plan to touch the money soon.

Where the tax comes from. The math works in your favor when the tax is paid from outside the account. Withholding it from the conversion shrinks the balance that compounds tax-free, which is one of the most common ways the benefit gets eroded.

State tax. Converting while resident in a high-tax state, then retiring to a no-tax state, adds a cost a future withdrawal would not have carried.

An Illustrative Example: When the Window Opens

Consider a hypothetical couple, late 50s, earning around $750,000 combined while working. They retire at 62, and until Social Security starts at 70 their taxable income drops to roughly $120,000. In 2026, the 22% bracket (married filing jointly) tops out near $201,050. Converting up to that line, they pay 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 differential alone represents roughly $40,000 in present-value tax savings, before decades of tax-free compounding. The window is real, but it has to be planned before it opens, not discovered the year it happens.

How This Connects to Roth Conversions Broadly

Whether to convert is the easy part. Knowing when the window will appear, sizing conversions across multiple years, and avoiding the side effects (IRMAA, ACA subsidy cliffs, state tax) is the design problem, and it's covered in the parent pillar: Roth Conversion: A Practical Guide for High Earners and Pre-Retirees. In the Sporos framework this is Soil-layer work: tax architecture laid years before you need it.

Frequently Asked Questions

Is there an income limit on Roth conversions in 2026?

No, conversions have no income limit. The 2026 limit of $236,000 (married filing jointly) applies only to direct Roth IRA contributions.

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

Rarely during a high-income working year. It works in transition years, early retirement, or a year when income temporarily drops, converting at 22% or 24% ahead of a 32-37% future.

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

The surcharge applies for that Medicare year and does not undo the conversion. The two-year lookback means you model it two years ahead, not retroactively.

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

Often yes, and sometimes this is the strongest argument for converting. Most non-spouse beneficiaries must empty inherited IRAs within 10 years, while a Roth passes income-tax-free and has no 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.

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.