Roth Conversion Financial Advisor

For informational purposes only — not tax, legal, or investment advice. Your situation may differ.

If you have $1M or more in traditional IRA or 401(k) accounts and you are 10–20 years from peak retirement income, you are sitting inside one of the most valuable tax-planning windows available to you. Roth conversions done correctly in this window can move hundreds of thousands of dollars from the IRS column to the heirs column. Done incorrectly — or not done at all — the same balance generates forced taxable income at the worst possible time: when Social Security, required minimum distributions, and potentially a pension all hit simultaneously.

Getting this right requires multi-year modeling, not a one-time calculation. It is financial planning work, not investment management. And it is precisely the category where the fee model of your advisor matters.

What a Roth Conversion Is — and Isn't

A Roth conversion is a taxable event: you move money from a traditional IRA or pre-tax 401(k) to a Roth IRA, and the converted amount is added to your gross income for the year and taxed at ordinary income rates. Unlike direct Roth IRA contributions, conversions have no income limit — a household earning $500,000 can convert as much as they choose. There is also no dollar cap on the conversion amount in a given year.

What you get in exchange: future growth and withdrawals from the Roth account are entirely tax-free. No required minimum distributions during your lifetime. A 10-year distribution window for heirs, but with no income tax owed on distributions (unlike inherited traditional IRAs, where heirs pay ordinary income tax on every dollar).

One important point: Roth conversions have been irreversible since 2018. The TCJA eliminated recharacterization of conversions — you cannot undo a conversion once completed. This makes sizing it correctly the critical task.

The Four Questions That Drive Conversion Strategy

Whether a Roth conversion makes sense — and how much to convert each year — comes down to four variables:

1. What bracket are you in now vs. what bracket will you be in during peak RMD years? The conversion is worth doing when your current rate is lower than the rate you expect to pay at forced distribution. If you are in the 22% bracket today and will be in the 32% bracket at age 75, converting $100,000 now saves $10,000 in taxes on that $100,000 — before counting any growth on the converted amount.
2. How long until the converted money is needed? The longer money can compound tax-free in a Roth, the more valuable the conversion. Converting at 55 with a 30-year investment horizon is more compelling than converting at 70 with a 15-year horizon. Break-even analysis typically shows 8–15 years for conversion to pay off, depending on tax rate differential and investment return assumptions.
3. How will the conversion interact with IRMAA? Medicare Part B premiums in 2026 jump from $202.90/month at the base to $284.10/month at $218,000 MAGI for a married couple — an extra $1,950/year.¹ Roth conversions increase MAGI in the conversion year and determine Medicare premiums two years later. A conversion that crosses an IRMAA tier costs real money. This is not a reason to avoid conversions, but it must be factored into sizing.
4. What is the estate planning goal? Roth IRAs pass to heirs with no income tax on distributions and no lifetime RMDs. For high-net-worth households with estate planning intent, conversions are effectively a way to prepay tax at your rate rather than having heirs pay tax at their (often higher) combined marginal rate.

Conversion Sizing: The Bracket-Filling Method

The most common approach to Roth conversions is bracket-filling: convert enough each year to bring your taxable income to the top of a target bracket, but not enough to spill into the next bracket up.

In 2026, the 22% bracket for married filing jointly runs from $100,800 to $211,400 of taxable income.² After the 2026 standard deduction of $32,200 for MFJ filers,² a retired couple with $70,000 in Social Security and pension income has roughly $109,400 of conversion headroom before reaching 24%.

That means they can convert $109,400 per year at 22% — generating roughly $24,000 in federal tax on the conversion — while staying below the next bracket. Run that for 10 years on a $1.5M IRA and you have converted $1.09M at an average rate of 22%, compared to the 32–37% those same dollars would face if taken as RMDs at the peak of retirement income.

The math changes every year as the situation evolves. Social Security start date, other income, investment performance, new legislation, and potential health or family changes all shift the optimal conversion amount. A good Roth conversion plan is modeled annually, not set and forgotten.

IRMAA and the Conversion Ceiling

For pre-retirees planning conversions in their early 60s, Medicare IRMAA surcharges set a practical ceiling on how aggressively to convert. IRMAA is based on income from two years prior — so a large 2026 conversion affects 2028 Medicare premiums.

The 2026 IRMAA thresholds for Part B are:¹

Crossing from the base tier to the first IRMAA tier — by even $1 of MAGI — costs a married couple an extra $1,950/year for that year's Medicare. Conversions must be sized to stay below tier boundaries, not just below income tax bracket lines. A good conversion strategy tracks both simultaneously.

The Roth Conversion Window by Life Stage

The conversion window is not equally valuable at every age:

• Ages 50–62 (pre-Medicare): Often the most flexible window. Income may already be declining if semi-retired or sold a business. Medicare IRMAA doesn't apply yet. Large conversions at relatively low rates are possible. Risk: converting too aggressively and creating large tax bills before the money is needed.
• Ages 63–72 (post-retirement, pre-RMD): This is typically the prime window. Earned income is gone or minimal, Social Security not yet claimed (or claimed at reduced amount), RMDs haven't started. IRMAA now applies. The goal is to fill the 22% bracket (or as high as 24% if the numbers support it) each year. Every dollar converted here is one fewer dollar forced into taxable income at 73–75.
• Ages 73+ (RMD years): Conversions are still mathematically possible, but they stack on top of mandatory RMD income, making it harder to find clean conversion headroom. The window shrinks significantly. If conversions weren't done in the prior decade, options are limited to charitable strategies (QCDs),³ estate planning structures, or simply paying the tax.

Under SECURE 2.0, RMDs begin at age 73 for those born 1951–1959, and at age 75 for those born in 1960 or later.⁴

When NOT to Do a Roth Conversion

Conversions are not universally optimal. Cases where they may not make sense:

• Your current bracket is higher than your expected future bracket. This happens when income is temporarily elevated (business sale year, large bonus, equity vest). Converting in a high-income year just pays more tax than necessary.
• Short time horizon. If you will need the converted funds within 5–8 years, the break-even math often doesn't work. You pay tax now; the Roth needs time to recover that cost in tax-free growth.
• State income tax with no Roth break. Some states tax Roth conversions at ordinary income rates but don't tax traditional IRA distributions (e.g., states that exempt pension/retirement income). In those states, the conversion tax drag may exceed the federal savings.
• Already in a high bracket now. If you are in the 35–37% bracket today and expect 24% bracket income in retirement, the direction is wrong — you'd be converting at high rates to avoid lower future rates.
• Near-term estate tax exposure. If the estate is already above the $15M federal exemption (OBBBA, permanent),⁵ estate tax planning may take priority over income tax optimization.

Roth Conversions vs. Direct Roth Contributions

These are distinct planning tools. Direct Roth IRA contributions in 2026 phase out for married couples with MAGI between $242,000 and $252,000 — above $252,000, direct contributions are not allowed.⁶ Roth conversions have no income limit. High earners who cannot contribute directly to a Roth IRA can still convert unlimited amounts from traditional accounts.

The backdoor Roth — contributing to a non-deductible traditional IRA and immediately converting to Roth — is a separate strategy for current high earners funding their Roth balance each year. It is distinct from the Roth conversion strategy for pre-retirees with existing large traditional IRA balances, though a comprehensive plan often includes both. One trap: the pro-rata rule. If you hold other pre-tax IRA dollars, a backdoor Roth conversion triggers tax on the proportional pre-tax balance — not just the after-tax contribution. More on backdoor Roth mechanics here.

What a Flat-Fee Advisor Does for Roth Conversion Planning

A flat-fee or hourly advisor working on a Roth conversion strategy typically delivers:

• Multi-year tax projection: Modeling your income trajectory from now through peak RMD years — Social Security timing, other income sources, projected RMD amounts at each age — to identify the optimal annual conversion amount.
• Bracket and IRMAA coordination: Sizing conversions to fill exactly the right bracket each year without triggering the next IRMAA tier. These two constraints don't always align — balancing them requires explicit modeling, not rules of thumb.
• Tax payment sourcing: Determining whether to pay conversion taxes from taxable accounts (optimal) or from the converted amount itself (suboptimal for Roth growth). For large conversions, this affects the strategy significantly.
• Annual recalibration: Updating the model each year as tax law changes, investment performance shifts, and your income situation evolves. A Roth conversion strategy from age 60 looks different at 65.
• Estate and inheritance planning integration: Coordinating conversions with beneficiary designations, the 10-year rule for inherited IRAs, and portability elections so the full picture is optimized.

What This Engagement Costs

Roth conversion planning from a flat-fee advisor typically fits into one of two structures:

• Annual retainer ($4,000–$10,000/year): Ongoing planning, conversion modeling updated annually, IRMAA tracking, and integration with broader retirement tax planning. Most appropriate for households with $2M+ in pre-tax accounts where the stakes justify continuous modeling.
• Project-based engagement ($1,500–$4,000): A defined deliverable — a 10–20 year Roth conversion roadmap showing the optimal annual conversion amount, break-even analysis, and IRMAA exposure map. You take the model and implement. Revisit with a new project engagement if circumstances change materially.
• Hourly engagement ($300–$500/hour): 3–6 hours for a focused Roth conversion analysis. Best for investors with a straightforward situation who want the math validated and a framework to execute independently. How hourly engagements work here.

Compare this to an AUM advisor charging 1% on a $1.5M IRA — $15,000/year — who may not proactively model Roth conversion strategy and who faces a financial disincentive to recommend conversions that reduce the managed balance. The flat-fee advisor's compensation is disconnected from the outcome of the recommendation.

Is This the Right Engagement for You?

Good candidates for a Roth conversion planning engagement:

• $750K or more in traditional IRA, 401(k), 403(b), or deferred comp
• Age 50–72, in the conversion window before peak RMD years
• Current marginal bracket at or below the expected RMD-year bracket
• Currently paying AUM fees for portfolio management but receiving limited proactive planning
• DIY investor who manages their own portfolio but wants the Roth conversion math done rigorously

If you have a large pre-tax balance and you are not yet maximizing the conversion window, the question is not whether to engage a flat-fee advisor for this work — it is how much the delay is costing you annually in future taxes. Full retirement tax planning overview here.