When should I convert my IRA to a Roth IRA?

A Roth conversion is advantageous when your current tax rate is lower than your expected future rate. This time often occurs between when you retire and when you start taking required minimum distributions (RMDs) at age 73. Taking a systematic approach and filling your lower tax brackets can potentially reduce future RMDs, lower Social Security taxation, and avoid Income-Related Monthly Adjustment Amount surcharges (a type of Medicare surcharge for people with higher incomes), while providing tax-free growth and distributions for heirs.

This information is not intended to provide individualized tax or legal advice. Discuss your specific situation with a qualified tax or legal professional.

Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.