Roth Conversion Planning: A Guide for Investors with $1M+ in Pre-Tax Accounts

Research compiled by Journey Advisory Group | Last updated: September 2026

Performing a Roth conversion can be a powerful tool that lets investors with high-value pre-tax accounts pay ultimately less tax per dollar on their retirement funds and reap the many other benefits of a Roth IRA. However, every investor’s  unique financial circumstances can greatly impact what steps to take to ensure the most successful Roth conversion possible.  This guide, which was compiled through research from multiple verified sources, will explain every factor to consider as well as how to structure a multi-year Roth conversion plan for your high-value account.

What Is a Roth Conversion?

A Roth conversion moves funds from a traditional IRA or 401(k) into a Roth IRA.¹ Performing Roth conversions at an ideal time may allow you to receive the benefits of a Roth IRA while minimizing taxes on your retirement funds. Multiple factors must be considered prior to performing a Roth conversion to ensure you receive maximum benefit.  

Is a Roth Conversion Right For You?

Roth conversions have many benefits for individuals with the right financial circumstances.^{Some circumstances that may make a Roth conversion beneficial for you include:2}

• If you expect to be in the same or a higher tax bracket in retirement;
• If you wish to avoid withdrawing required minimum distributions (RMDs);
• If you wish to create an inheritable Roth IRA account as part of an estate plan;
• If you wish to have access to tax-free retirement funds in the future;
• If you have sufficient non-retirement funds to pay Roth conversion taxes.

Factors To Consider For Your Roth Conversion Strategy

Income Tax Bracket

One of the most significant factors is your current tax bracket, since a Roth conversion is subject to income tax in the year the conversion is completed.¹ Avoiding Roth conversions that push you into a higher income tax bracket helps ensure each dollar of your conversion is taxed at the lowest possible rate.  

Low Income Years

Fluctuations in your yearly taxable income will affect the value of the Roth conversions you can perform without raising your taxable income into a higher income tax bracket. Taking advantage of low-income years, when your taxable income is further from the upper threshold of your current income tax bracket, is an effective strategy that lets you move more funds in a Roth conversion at the same tax rate.²

Required Minimum Distributions (RMD)

Traditional IRA and 401(k) accounts require you to begin withdrawing annual RMDs beginning at age 73.³ Beginning in 2033, RMDs begin at age 75.⁴ Not only must an RMD be withdrawn prior to a Roth conversion taking place, but no funds gained from an RMD withdrawal are permitted to be used for a Roth conversion.⁵ Completing your Roth conversion plan before RMDs begin will maximize the portion of your retirement funds you can successfully convert.

Market Conditions

Market downturns reduce the value of your retirement account assets. Strategically using these affected assets in a Roth conversion during such a period will allow you to move more assets and be taxed less compared to the taxation that would have been required before the market downturn. Further, moving assets whose values have decreased due to market downturns into a Roth IRA allows them to regain or increase in value tax-free in the Roth IRA account once market conditions improve.²

IRMAA Surcharge

High-income individuals may be subject to IRMAA surcharges for Medicare Part B and D if their income reaches certain thresholds, resulting in higher monthly premiums for the same benefits. IRMAA surcharges are determined by your Modified Adjusted Gross Income (MAGI) from two years prior. MAGI is calculated by adding your Adjusted Gross Income (AGI) and tax-exempt interest. Roth conversions affect your AGI, subsequently affecting whether you will owe any IRMAA surcharges.⁶

Social Security Taxation

Your AGI, and therefore your Roth Conversion, may also impact your taxable Social Security benefits. Your Combined Income, which is calculated by adding your AGI, tax-exempt interest, and 50% of your Social Security benefits, determines what percentage of your Social Security benefits will be subject to income tax in line with your current tax bracket.⁷

The 5-Year-Rule

Each Roth conversion is subject to a unique 5-year rule that prohibits withdrawing any Roth conversion funds until 5 years have passed since the year the conversion was performed. This period begins on January 1 of the year the conversion is performed and concludes on January 1 5 years afterward. Withdrawing funds subject to this rule within this window will result in your withdrawal being subject to income tax at your current tax rate and a 10% penalty.⁸ A multi-year Roth conversion, started at the right time, can help ensure you can access your Roth IRA funds penalty-free when you need them in the future.

State Income and Roth Conversion Taxes

Only 9 states do not impose state income taxes that would affect your Roth conversions: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Every other state has its own income tax rules and rates that your Roth conversion may be subject to.⁹

Calculating Your Roth Conversion Amount

To determine the maximum amount of funds you can transfer through a Roth conversion while avoiding unwanted tax rate increases, you subtract your current taxable income from the upper threshold of your current income tax bracket.² The table below lists the required calculation for each 2026 bracket, as well as the accompanying income tax rate.¹⁰

Similarly, to determine the maximum amount of funds you can transfer through a Roth conversion while avoiding unwanted IRMAA surcharges, you subtract your MAGI from the upper threshold of your current IRMAA surcharge bracket. The table below lists the required calculation for each 2026 bracket, as well as the accompanying income tax rate.⁶

Planning Your Multi-Year Roth Conversion Timeline

The Ideal Roth Conversion Window

The ideal window to perform your Roth conversions is between ages 60 and 73, immediately following retirement and before RMDs begin.¹¹

Income vs. IRMAA surcharge vs. Social Security Benefits Brackets

The differing bracket thresholds between income tax, IRMAA surcharges, and Social Security benefits can be difficult to balance when performing Roth conversions.² These factors become even harder to manage with high-value accounts, which will often require high-value Roth conversions for a successful multi-year conversion schedule.

Multi-Year Conversion Schedule

Multi-year planning is key to maximizing the amount of retirement funds you can convert while minimizing taxes owed per dollar.² The table below lists a general conversion schedule for a multi-year Roth conversion plan, along with a breakdown of the factors to consider and the subsequent strategy to employ.¹¹

A general conversion schedule can help you begin your multi-year conversion plan; however, additional factors such as changing market conditions, unique state tax laws, and unexpected taxable income changes can greatly affect which Roth conversion strategies are right for you year to year. In-depth multi-year planning to maximize the benefit you receive from your Roth conversion schedule can be achieved with assistance from financial experts who can help you determine the best Roth conversion strategy for your circumstances.

References

1. Kagan, Julia. 2024. “Roth IRA Conversion: Definition, Methods, and Example.” Investopedia. https://www.investopedia.com/terms/i/iraconversion.asp.
2. Cutler, Dallin. 2025. “When to Do a Roth Conversion.” Epwealth.Com, EP Wealth Advisors, April 8. https://www.epwealth.com/blog/when-to-do-a-roth-conversion.
3. Blessing, Elizabeth. 2026. “What Is a Required Minimum Distribution (RMD)?” Investopedia, September 2. https://www.investopedia.com/terms/r/requiredminimumdistribution.asp.
4. Daugherty, Greg. 26AD. “Roth IRA Conversion Rules.” Investopedia, May 6. https://www.investopedia.com/roth-ira-conversion-rules-4770480.
5. Cooper PLLC, Steward Ingram. 2026. “How Roth Conversions Effect Taxes & Social Security.” Steward Ingram & Cooper PLLC, January 19. https://stewardingram.com/roth-conversions/.
6. LeValley, Donna. 2025. “Medicare Premiums 2026: IRMAA Brackets and Surcharges for Parts B and D.” Kiplinger, November 15. https://www.kiplinger.com/retirement/medicare/medicare-premiums-2026-irmaa-brackets-and-surcharges-for-parts-b-and-d.
7. Ellis, Frank. 2026. “Tax Tables for Seniors and Social Security Benefits 2026: Understanding How Your Retirement Income Is Taxed.” National Tax Reports, July 21. https://nationaltaxreports.com/tax-tables-for-seniors-and-social-security-benefits-2026/.
8. Kagan, Julia. 2025. “5-Year Rule: Definition for Roth, Traditional, and Inherited IRAs.” Investopedia, May 15. https://www.investopedia.com/terms/f/fiveyearrule.asp.
9. Wear, Craig. 2026. “Roth Conversion State Taxes: 2026 State-by-State Guide.” Q3 Advisors, July 15. https://q3adv.com/roth-conversion-state-taxes/.
10. Josh. 2026. “2026 Federal Tax Brackets.” PennyCalc, May 11. https://pennycalc.com/tax-brackets/2026/.
11. Bullseye Team. 2025. “Roth Conversion Timing: When and How Much to Convert.” Bullseye, October 6. https://www.bullseyeretirement.com/articles/roth-conversion-timing-strategies.