Roth conversions are one of the most effective tools for reducing your lifetime tax burden, but they're often misunderstood or mishandled. In 2026, with interest rates hovering at 3–4% and markets at all-time highs, this strategy is more relevant than ever. As a CFP® in Newtown, Connecticut, I've helped families nationwide use Roth conversions to lock in tax savings, protect against future hikes, and build tax-free legacies. But here's the key: There's no blanket advice—whether, when, and how much to convert depends on your unique situation.
In this deep dive, we'll cover what Roth conversions are, why now might be the ideal time, real-world examples, and actionable steps to decide if they're right for you. If you're in your 20s building wealth, 60s nearing retirement, or already retired, read on to see how this could save you thousands.
What Is a Roth Conversion and Why Consider It?
A Roth conversion moves funds from a tax-deferred account (like a traditional IRA or 401(k)) to a Roth IRA. You pay income taxes on the converted amount now, at your current rate, but all future growth and withdrawals are tax-free. Plus, Roth IRAs have no required minimum distributions (RMDs) at age 73, giving you more control and flexibility for legacy planning.
The core idea? Pay taxes in low brackets today to avoid higher ones tomorrow. But it's personal—no one-size-fits-all. Some "advisors" claim everyone should convert; others say no one should. The truth: It hinges on your facts, goals, and modeling to avoid pitfalls like bracket jumps.
Why Roth Conversions Make Sense in 2026
Lower rates (down from 4–5% last year) make holding cash less attractive, freeing up opportunities for conversions. Markets are strong, swelling your accounts—converting now reduces future RMDs that could push you into 22%+ brackets or trigger IRMAA surcharges (extra Medicare premiums).
Potential post-2026 election changes add urgency: Lock in today's rates before hikes. For families, it's a legacy booster—heirs inherit tax-free, preserving more for grandkids without the 10-year rule complications on traditional IRAs.
Contrarian view: Waiting for "even lower rates" is risky. Modeling often shows delays miss tax-free compounding and lead to bigger RMD taxes. Don't guess—use data.
Real Examples: How Roth Conversions Save Taxes
From my practice, here are three scenarios across ages, all optimized with financial modeling (like Monte Carlo simulations factoring volatility and longevity):
- A 28-year-old tech worker in Connecticut: Low bracket now, high earnings expected. We prioritized direct Roth IRA contributions over traditional 401(k) maxing—paying at 12% for tax-free growth. Modeling $10k annual conversions from existing accounts projected $150k+ savings by 65. Without? He'd pay 32–37% later—reverse engineering a tax trap.
- A 64-year-old couple with $1.2M in IRAs: Modeling showed converting ~$16k/year for nine years (pre-RMDs) drops their long-term effective rate from 22% to 12%, saving ~$25k annually by avoiding RMD bloat. Added QCDs for charity preserved $200k for heirs—a solid legacy plan.
- A 75-year-old retiree in RMDs: Simulations pinpointed partial conversions + QCDs cutting taxable income 15%, dodging $9k/year IRMAA. It kept principal intact for family.
Common lesson: Modeling ran thousands of scenarios—without it, they'd overpay or miss opportunities.
Step-by-Step: How to Optimize Roth Conversions
- Assess Your Bracket: Use a tax calculator—target years under 22% (single <$47k; joint <$95k in 2026). AI tools flag your "conversion window" (often retirement to age 73).
- Run a Model: Free online starters will give basics. For depth, AI-powered Monte Carlo tests to age 100, personalizing for health/family.
- Decide Amount/Timing: Model "what ifs"—convert to fill (not exceed) brackets. AI maps multi-year plans, avoiding creep.
- Layer in QCDs or HSAs: Model combos—QCDs satisfy RMDs tax-free; HSAs pay medical expenses (e.g., hearing care), freeing cash for conversion taxes without selling assets.
- Review Annually: Markets/taxes shift—AI helps adapt.
Tip: 20s/30s? Start small for compounding. 50s/60s? Pre-RMD prime time. Retirees? Legacy focus. Tie in health-wealth: Conversions free funds for preventive care.
Is a Roth Conversion Right for You?
If modeled well, yes—but consult a CFP®/tax pro. Free offer: I'll build your real-time model—no obligation, while slots last. Spot Roth ops, taxes, legacy. Book: calendly.com/anthony-leonardi-leonardifwc/15-minute-check-in-quick-questions-quick-answers.
Your Action Plan
- Calculate current/future brackets.
- Model scenarios (quiz below).
- Schedule a free model build.
Because there IS a Smarter Way to Retire.
Take my free 2-minute retirement readiness quiz + get my book instantly:
https://www.leonardifamilywealthcare.com/quiz
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https://calendly.com/anthony-leonardi-leonardifwc/15-minute-check-in-quick-questions-quick-answers
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