Roth conversion pacing
A Roth conversion moves tax from a later year to this one, so the only question that matters is whether the rate you pay now is lower than the rate that money would otherwise be taxed at later, whether by you, by a surviving spouse filing single, or by the people who inherit the account.
Published September 11, 2026 by Flames Financial Planning. 13 min read.
Short answer: Convert up to the point where the marginal cost of the next dollar (the federal bracket, plus state tax, plus any Medicare surcharge tier or other threshold it pushes you across) exceeds the rate that dollar would otherwise face later. For many households with $2 million to $5 million in tax-deferred savings, that means filling the 22% and often the 24% bracket in the years between retiring and required distributions, while watching the IRMAA tiers, and stopping well short of 32%. The exact stopping point is arithmetic, and it changes every year.
The right frame
Money in a traditional IRA or 401(k) has not escaped tax. It is taxed when it comes out, at whatever rate applies to whoever takes it out, in whatever year that happens. A conversion picks the year and the person: you, now, at a rate you can see.
That makes the decision a comparison between three rates. The rate you would pay on converted dollars this year. The rate you would pay later if you leave the money alone, once required minimum distributions begin at 73 or 75 and Social Security is in the picture. And the rate someone else would pay: a surviving spouse who files as a single taxpayer, or children who inherit the account and must empty it within ten years, usually during their own peak earning years.
A conversion is "aggressive" only if the rate you are paying now is higher than the rates it replaces. Filling the 24% bracket looks bold in isolation and is conservative next to a future of 32% required distributions, or an heir in the 35% bracket taking a lump sum in year ten. Filling the 12% bracket looks timid and is exactly right for a household whose income will never be higher than it is today.
The test is the same every year: for each additional slice of conversion, what does it cost now, all in, and what would that slice have cost later? Convert while now is cheaper. Stop when it is not.
The brackets
Conversions are taxed as ordinary income, on top of everything else on the return, and "filling a bracket" means converting until taxable income reaches the top of one. For tax year 2026 inflation adjustments (Rev. Proc. 2025-32), the married-filing-jointly thresholds are:
| Rate | Applies to taxable income | Room in the bracket |
|---|---|---|
| 10% | $0 to $24,800 | $24,800 |
| 12% | $24,800 to $100,800 | $76,000 |
| 22% | $100,800 to $211,400 | $110,600 |
| 24% | $211,400 to $403,550 | $192,150 |
| 32% | $403,550 to $512,450 | $108,900 |
| 35% | $512,450 to $768,700 | $256,250 |
| 37% | over $768,700 | no ceiling |
Single filers reach the same rates at roughly half these amounts: 22% begins at $50,400, 24% at $105,700, 32% at $201,775. Source: IRS, tax year 2026 inflation adjustments (Rev. Proc. 2025-32).
Taxable income is what is left after deductions. For 2026 the standard deduction is $32,200 for a couple, plus $1,650 for each spouse who is 65 or older, and the One Big Beautiful Bill Act added a further $6,000 deduction per person aged 65 and over for 2025 through 2028, which phases out above $150,000 of modified adjusted gross income on a joint return. A conversion large enough to fill the 24% bracket will generally cost a couple that senior deduction, which is a real but modest part of the price.
Two things follow. The jump from 24% to 32% at $403,550 of joint taxable income is the largest step in the schedule, eight points, which is why so many conversion plans stop there. And the gap between the 12% and 22% rates at $100,800 is ten points, which is why a household with genuinely low income in early retirement should not rush past it without a reason.
The hidden rates
The bracket is the visible rate. Three other thresholds can add to it, and two of them behave like cliffs rather than slopes.
Once you are on Medicare, your Part B and Part D premiums are set by your modified adjusted gross income (adjusted gross income plus tax-exempt interest) from the return filed two years earlier: 2026 premiums come from the 2024 return. A conversion in 2026 therefore sets premiums for 2028. The standard Part B premium is $202.90 a month in 2026; above $218,000 of joint MAGI ($109,000 single) the surcharges begin, and they step up in tiers. One dollar over a threshold buys the whole tier.
| 2026 tier (joint MAGI on the 2024 return) | Single filers | Extra premiums, per couple, per year |
|---|---|---|
| up to $218,000 | up to $109,000 | none |
| $218,000 to $274,000 | $109,000 to $137,000 | $2,297 |
| $274,000 to $342,000 | $137,000 to $171,000 | $5,770 |
| $342,000 to $410,000 | $171,000 to $205,000 | $9,240 |
| $410,000 to $750,000 | $205,000 to $500,000 | $12,710 |
| over $750,000 | over $500,000 | $13,872 |
Part B and Part D income-related adjustments combined, both spouses on Medicare, twelve months. Source: CMS, 2026 Medicare Parts A & B premiums and deductibles; the two-year lookback is described by the Social Security Administration. The full table and the appeal process are in Roth conversions and IRMAA.
Up to 85% of Social Security benefits are taxable once "combined income" (half of benefits plus all other income, including tax-exempt interest) exceeds $44,000 on a joint return. Those thresholds were set in statute and are not indexed, so a household converting meaningful amounts is already past them; the practical point is that a conversion made before benefits begin avoids pulling more of them into income, which is one more reason the years before claiming are the natural window. Source: IRS, Publication 915, Social Security and Equivalent Railroad Retirement Benefits.
Conversion income is not investment income, so it is not itself subject to the 3.8% tax. But the tax applies to the lesser of net investment income or the amount by which MAGI exceeds $250,000 on a joint return ($200,000 single), and a conversion raises MAGI. A couple with $60,000 of dividends and interest and MAGI otherwise under the threshold can find that a large conversion exposes those dividends to an extra 3.8%. Source: IRS, Topic no. 559, Net investment income tax.
Three futures
The later rates are the half of the comparison people skip, because they require assumptions. Make them explicitly; a plan that never writes them down is guessing.
Required minimum distributions begin at 73 for people born 1951 through 1959 and at 75 for those born in 1960 or later. A $2,500,000 traditional IRA that has grown for another decade produces a first-year distribution well into six figures whether you need the income or not, stacked on top of Social Security and any pension. Project the balance forward and read the bracket it lands in.
The year after a spouse dies, the survivor files as a single taxpayer with roughly half the bracket room: the 24% bracket ends at $201,775 of taxable income instead of $403,550, and the first IRMAA threshold falls from $218,000 to $109,000. The same IRA, drawn by one person, is taxed harder. Conversions made while both spouses are alive use bracket room that disappears later.
A child who inherits a traditional IRA from an owner who died after 2019 must generally empty it within ten years, and when the owner had already reached required-distribution age, must also take annual distributions in years one through nine under the final regulations that apply from 2025. That income lands in the child's bracket, often at the peak of their career. A Roth passes under the same ten-year clock, tax-free.
Two further considerations belong here. The federal estate exclusion is $15,000,000 per person for deaths in 2026, so for most households the estate-tax reason to convert has gone; the income-tax reason, heirs' brackets, remains. And a Roth IRA has no lifetime required distributions, which is worth more the longer the money is meant to stay invested. Sources: IRS, Retirement plan and IRA required minimum distributions FAQs; IRS, Internal Revenue Bulletin 2024-33 (T.D. 10001, final required minimum distribution regulations); IRS, Notice 2024-35 (relief for certain 2024 required minimum distributions).
A worked example
A retired couple, both 66, with $2,000,000 in traditional IRAs, a brokerage account and a small Roth. They have $90,000 of pension, interest and dividends, no Social Security yet (they plan to claim at 70), and take the standard deduction of $35,500 ($32,200 plus $1,650 each for being over 65). Both are on Medicare, so the 2026 return will set their 2028 premiums. State tax is left out here and added back on the state pages.
| Conversion slice | Federal rate | IRMAA step triggered (per couple, per year) | All-in cost of the slice |
|---|---|---|---|
| $0 to $128,000 | 22% | none (standard part b and part d premiums) | 22.0% |
| $128,000 to $156,900 | 22% | $2,297 (crosses into the second irmaa tier) | 29.9% |
| $156,900 to $184,000 | 24% | none (still in the second tier) | 24.0% |
| $184,000 to $252,000 | 24% | $3,473 (crosses into the third tier) | 29.1% |
| $252,000 to $320,000 | 24% | $3,470 (crosses into the fourth tier) | 29.1% |
| $320,000 to $349,050 | 24% | $3,470 (crosses into the fifth tier) | 35.9% |
Each slice's cost is its federal rate plus the IRMAA step it triggers, spread over the dollars in that slice. The first slice stops where MAGI reaches $218,000; the second where taxable income reaches the top of the 22% bracket at $211,400; later slices stop at the IRMAA tier ceilings and at the top of the 24% bracket, $403,550. Beyond that, the 32% bracket begins. The senior deduction is ignored; it would be phased out at these income levels.
Read the last column against the futures above. If this couple expects required distributions plus Social Security to put them in the 24% bracket later, the first slice is clearly worth taking and the 29.9% slice is marginal: it costs more now than it saves later, unless the surviving-spouse or heir scenario is the one they are planning for, in which case 32% or 35% is the comparison and every slice through the top of the 24% bracket clears it. If they expect to be in the 22% bracket for life, the first slice is the whole plan.
Notice what the table does not say. It does not say "convert to the top of the 24% bracket," which is the rule of thumb most often repeated. For this couple that final slice costs 35.9% once the Medicare step is counted, more than the 32% bracket it is supposedly avoiding. The rule of thumb is a reasonable first draft and a poor final answer.
IRMAA steps are fixed dollar amounts, so the wider the slice they are spread across, the less they cost per dollar. Crossing a tier by a little is the expensive mistake; crossing it by a lot, on purpose, can be cheap. Either stay just under a threshold or clear it decisively.
Signals
Mechanics
How this fits into withdrawal order, and which account should fund the tax, is the subject of which account to draw from first. How required distributions will land if you do nothing is in planning for RMDs at 73 or 75.
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FAQ
Only if the rate you avoid later is higher than the all-in rate you pay now, and the all-in rate includes Medicare surcharges. In the example above, the final slice up to the top of the 24% bracket cost 35.9% once the IRMAA step was counted. For some households that is still a bargain; for others it is more than the 32% bracket it was meant to avoid. Run the slices.
Conversion income raises modified adjusted gross income, and Medicare Part B and Part D surcharges are set from MAGI on the return two years earlier. A 2026 conversion sets 2028 premiums. Above $218,000 of joint MAGI ($109,000 single) the surcharges start, in tiers, and one dollar over a threshold buys the whole tier.
Spreading conversions keeps each year in a lower bracket, which is usually cheaper federally. But IRMAA steps are fixed dollar amounts, so a household that will cross a tier anyway can be better off crossing it decisively in fewer years than by a small margin every year. The right pattern depends on how much needs converting and how many years you have before required distributions.
No. Recharacterizing a conversion has not been allowed since 2018. Because of that, most conversions are best done late in the year, when the rest of the return is known and the amount can be set precisely.
Yes, and for households whose estate is under the federal exclusion it is often the deciding factor. A traditional IRA left to a child must generally be emptied within ten years, and if you had reached required-distribution age, with annual distributions along the way, so it is taxed at the child's rates during their earning years. Converting at your rate now can be cheaper than their rate later, and a Roth passes to them tax-free under the same ten-year clock.
It is part of the rate you pay now and part of the rate you would pay later, and the two can differ if you plan to move. A Minnesota resident who expects to retire to Florida faces up to 9.85% on a conversion today and zero on distributions later, which changes the answer; an Illinois or Pennsylvania resident pays no state tax on a conversion at all. The state pages carry each state's rule with its source.
Keep reading
The full 2026 surcharge table, the two-year lookback, and how to appeal after retiring.
Where conversions sit in a withdrawal order, and which account should pay the tax.
How conversion modeling, IRMAA, required distributions and tax filing fit into one flat-fee relationship.
This article is educational and is not individualized tax, legal or investment advice. Thresholds, rates and premiums are revised every year; the figures here are for tax year 2026 as published by the sources above, and you should confirm the current year’s before acting on any of them. Advisory services are offered through Core Planning, LLC, a Registered Investment Advisor.
