If there’s one retirement planning move that deserves a look between now and December 31, it’s the Roth conversion. A conversion shifts money from a traditional IRA (or pre-tax 401(k) rolled into an IRA) to a Roth IRA. You pay income tax on the amount you convert this year, and in exchange, the money can grow, and be withdrawn, tax-free later, as long as the Roth rules are met.
The deadline matters because a Roth conversion counts for the tax year in which it’s completed. Miss December 31, and you’re waiting until 2027.
By October, you have something you don’t have in January: a clear picture of your income for the year. That makes it much easier to answer the question that drives every Roth conversion decision:
How much can I convert before the tax cost outweighs the benefit?
For many retirees, the answer comes from filling up a lower tax bracket. If your 2026 taxable income lands below the top of a bracket you’re comfortable with, you may be able to convert enough to “fill” that bracket and no more, rather than paying a higher rate later on larger RMDs.
Conversions tend to make the most sense for people who:
Conversions are not for everyone. If you’ll be in a much lower bracket later, need the cash soon, or can’t pay the tax from savings outside the IRA, they may not make sense.
Texas has no state income tax, so a conversion is generally taxed only at the federal level. Retirees in states with high income taxes face a bigger bill. That doesn’t make conversions automatic for Texans, but it does lower the cost of the strategy.
The tax on a conversion isn’t just the bracket you see. Converted dollars raise your income for the year, which can ripple through other parts of your plan:
This is why we rarely recommend an “all-or-nothing” conversion. A series of smaller, strategic conversions over several years is often more efficient. Our tax services team coordinates these details so the conversion fits the bigger picture.
Imagine a married couple, both 66, with $1.2 million in traditional IRAs and $90,000 of taxable income expected in 2026. They have room to convert a measured amount while staying in a bracket they find acceptable. Over several years, they could shift a meaningful portion of their IRA into a Roth, reducing future RMDs and creating tax-free income for later in retirement or for their heirs. (This example is hypothetical and for illustration only. Your situation will differ.)
A conversion isn’t a stand-alone trick. It works best as part of a full retirement income strategy that considers when to claim Social Security, how to draw from each account, and how to manage taxes over decades. If you’re also thinking about moving an old 401(k), our IRA and 401(k) rollover service can help you decide whether a rollover and a conversion should happen together.
We also offer a free guide, Converting to Roth IRA, on our Resources page.
What is a Roth conversion? A Roth conversion moves money from a pre-tax account like a traditional IRA into a Roth IRA. You pay income tax on the converted amount in the year of the conversion, and qualified withdrawals later are tax-free.
What’s the deadline for a 2026 Roth conversion? The conversion must be completed by December 31, 2026 to count for the 2026 tax year. Unlike IRA contributions, there is no extension into the following spring.
How much should I convert? There’s no universal number. It depends on your income, tax bracket, Medicare considerations, and your goals. Many people convert in partial amounts over several years.
Will a Roth conversion increase my Medicare premiums? It can. Medicare looks back two years at your income, so a large 2026 conversion could affect premiums in 2028.
Is there an income limit for Roth conversions? No. Anyone can convert, regardless of income. The income limits apply to direct Roth contributions, not conversions.
Should I convert if I’m already taking RMDs? Possibly. Conversions can still help reduce future RMDs and leave tax-free assets to heirs, but your RMD must be taken first and the added income needs careful modeling.
Can Crestview help me decide? Yes. We model conversion scenarios so you can see the tradeoffs before you commit. Meet our team to learn more.
Time is limited, and a conversion done well can pay off for decades. Schedule a Clear Path Consultation or call (469) 338-5333.
Crestview Wealth Management, LLC (CWM) is a Texas-registered investment advisor. CWM is a member of Ethos Financial Partnership, a Securities and Exchange Commission registered investment advisor. Content contained herein is not intended and should not be construed as personalized investment advice or an offer for the purchase or sale of any security, insurance, or other investment product. Investments involve the risk of loss, including possible loss of principal. Please consult with a qualified financial, tax, accounting, or legal professional before implementing any ideas or strategies discussed here. Content provided may be obtained from sources believed to be reliable but cannot be guaranteed as to its accuracy or completeness.