When should you do an IRA Conversion?

You should consider a Roth conversion when paying tax now is likely cheaper than paying tax on withdrawals later. That might be because you expect your income to rise, believe tax rates will increase, or see that future required minimum distributions could push you into higher brackets. It can also make sense when you have a long time horizon, since more years of tax‑free growth improve the payoff. Another good sign is that you can comfortably pay the conversion tax from non‑retirement funds, so the full converted amount stays invested. You might delay or limit conversions in years when your income is unusually high, you’re close to a higher Medicare premium tier, or you need the IRA money in the near term.

Learn more about IRA conversion appraisals.