Should I Convert to a Roth or Leave It Alone?

The short version

A traditional IRA is a deal with the IRS: you skipped the tax going in, and you owe it coming out, at whatever rate applies in the year the money comes out. A Roth conversion settles that bill early, at today’s rate, in exchange for never owing tax on that money or its growth again.

So the whole comparison is one question: is the rate you’d pay today lower than the rate you’d pay later? If yes, converting wins. If no, leaving it wins. Everything else in this guide is about figuring out which one is true for you, because it is rarely obvious from the outside.

What “leaving it” actually means

Leaving the money alone feels like the safe, do-nothing option. It is a choice with consequences of its own.

• The tax bill grows with the account. Every dollar of growth inside a traditional IRA is a dollar the IRS will eventually tax as ordinary income.
• The IRS sets the schedule. Starting at 73 (75 for younger generations under current law), required minimum distributions force money out every year, whether you need it or not. Large RMDs can push you into a higher bracket, make more of your Social Security taxable, and raise Medicare premiums through surcharges.
• The survivor pays single rates. When one spouse dies, the other often pays tax on nearly the same income at single-filer rates, which are meaningfully higher at the same income.
• Your heirs inherit the tax bill. Most non-spouse heirs now have to empty an inherited traditional IRA within ten years, on top of their own income, often in their peak earning years.

None of that makes leaving it wrong. It means “leaving it” is really “letting the calendar pick the rate,” and the calendar is not always kind.

What converting actually costs

• Real tax, due now. The converted amount is added to this year’s income. Ideally the tax is paid from cash outside the IRA, so the full amount keeps growing tax-free.
• Brackets are edges. Converting a little too much in one year can spill into the next bracket, raise Medicare premiums two years later, or reduce health-insurance subsidies before 65. The size of each slice matters more than the decision to convert at all.
• It is permanent. There is no undo. That is why conversions are almost always done in yearly pieces, not one leap.
• It can be the wrong year. Converting while career income is still high means paying a high rate to avoid a rate that might have been lower anyway.

Side by side

• When the tax is paid: converting, now, at a rate you choose; leaving it, later, at a rate the calendar chooses.
• Growth from here: converting, tax-free forever; leaving it, tax-deferred, taxed on the way out.
• Required withdrawals: converting, none during your lifetime; leaving it, required from 73 or 75.
• A surviving spouse: converting, tax-free income at any filing status; leaving it, the same income taxed at single rates.
• Your heirs: converting, tax-free within their ten-year window; leaving it, taxable income stacked on their own.
• Flexibility: converting, permanent; leaving it, keeps the option open, but the window to convert cheaply may close.
• The risk you take: converting, paying tax you might never have owed if your later rate turns out low; leaving it, paying more than you needed to because you never used your cheap years.

Who converting is right for

• People in the stretch between retiring and starting Social Security and RMDs, when taxable income drops and the lowest brackets sit mostly unused. This is the classic window, and it is often the best tax window of your life.
• Anyone whose traditional IRA is large enough that future RMDs would push them into a higher bracket than they are in today.
• Married couples who want to protect the survivor from single-filer rates on the same income.
• People who expect to leave the account to children in their own peak earning years.

Who leaving it is right for

• Anyone still in their highest-earning years, where the conversion would be taxed at the top of their career rate.
• People who genuinely expect to spend the money in retirement at a lower bracket than today, with no large RMD problem looming.
• Anyone without cash outside the IRA to pay the tax, since paying it from the account itself gives back much of the benefit.
• People who plan to give from the IRA to charity, where qualified charitable distributions can satisfy RMDs without the income ever appearing on a return.

What people get wrong

• Treating it as all or nothing. The best answer is usually a slice a year, sized to fill a low bracket and stop.
• Paying the tax from the IRA. It works, but it shrinks the amount that gets to grow tax-free.
• Waiting for a “perfect” year that never comes. The low-income window between retirement and Social Security is finite. Once RMDs and Social Security stack up, the cheap years are gone.
• Converting without running the numbers. This is genuinely personal. The right amount in the right year depends on your full picture, which is exactly the math we sit down and do with people before anything moves.