Should You Do a Roth Conversion? A Greenville, SC CFP® Professional's Q&A Guide for Pre-Retirees
By Bart Street, CFP®, Street Wealth Management Published: October 15, 2026 | 10 min read
"Why is everyone telling me to do Roth conversions, and is that right for me?" It's one of the most common questions I hear from pre-retirees in Greenville and across the Upstate. It comes up in nearly every conversation about retirement income, and in my last few posts on Social Security timing, Medicare premiums, and tax diversification, I've pointed back to it as one of the most useful tools available to someone about to retire.
This Q&A answers the questions I hear most about Roth conversions: what they are, who they help, how much to convert, what they cost, and what can go wrong. If you haven't read the earlier posts in this series, the Social Security timing guide and the IRMAA and Medicare premium guide are worth a look, because conversions interact with both.
What is a Roth conversion?
A Roth conversion means moving money from a pre-tax account, such as a traditional IRA or an old 401(k) rolled into an IRA, into a Roth IRA. You pay ordinary income tax on the amount you convert in the year you convert it. In exchange, that money (and all future growth) can come out tax-free in retirement, as long as you meet the Roth rules. Roth IRAs also have no Required Minimum Distributions during your lifetime.
In simple terms, you're choosing to pay tax now, at rates you can see and control, to avoid paying tax later at rates you can't predict.
Why would I pay taxes now instead of later?
Because later is often more expensive than people expect. For most pre-retirees with large traditional balances, three things come together after about age 73:
Required Minimum Distributions force taxable income out of your accounts whether you need the money or not. RMDs begin at age 73 for those born between 1951 and 1959, and at age 75 for those born in 1960 or later.
Social Security benefits start counting as taxable income at higher levels, up to 85% taxable, as I covered in the Social Security post.
Medicare premiums can rise through IRMAA if your income crosses certain thresholds, as I covered in the IRMAA post.
A conversion lets you fill up lower tax brackets in the years when your income is low, typically after you stop working and before RMDs and Social Security stack on top of each other. You pay tax at 12% or 22% today to avoid paying 22% or 24% later.
Who benefits most from Roth conversions?
Roth conversions tend to help most when several of these are true:
You have a large balance in traditional IRAs or 401(k)s relative to your other accounts.
You expect to be in the same or a higher tax bracket in retirement than you are in the years just after you stop working.
You have a window of low taxable income, often between retirement and the age you claim Social Security or start RMDs.
You can pay the tax from non-retirement money, such as a brokerage account or cash, rather than from the converted funds themselves.
You want to leave money to heirs. Roth IRAs inherited by children generally still must be emptied within ten years, but the withdrawals are income-tax-free to them, which can matter a great deal if your heirs are in their peak earning years.
Conversions help less when your tax bracket is likely to fall substantially in retirement, when you'd need to use the converted money itself to pay the tax, or when you're likely to need the money within a few years.
How much should I convert each year?
There's no single right number, and the answer is almost never "everything at once." The most useful way to think about it is as a ceiling set by whichever of these thresholds you'd hit first:
A tax bracket you don't want to cross. For 2026, a married couple filing jointly stays in the 12% bracket up to $100,800 of taxable income and the 22% bracket up to $211,400. Single filers hit 22% at $50,401 and 24% at $105,701. The standard deduction for 2026 is $32,200 for married couples and $16,100 for single filers, with an extra amount for people 65 and older.
An IRMAA threshold. For 2026 premiums, the first threshold is $218,000 of income for a married couple and $109,000 for a single filer, based on income from two years earlier. A conversion in 2026 shows up in your Medicare premium in 2028.
A Social Security taxation threshold. If you're already collecting benefits, conversion income increases the portion of those benefits that's taxable.
A health insurance subsidy cutoff. If you're buying coverage on the marketplace before Medicare, conversion income can reduce or eliminate premium tax credits.
The right amount is usually the largest conversion that keeps you under the first of those lines that matters to you, repeated across several years.
Can you show an example?
Here's a simplified illustration. It's hypothetical, ignores state tax and investment growth, and isn't a recommendation for any specific person.
Imagine a Greenville couple, both 62, who've just retired. They have $1.5 million: $1.1 million in traditional IRAs, $150,000 in Roth IRAs, and $250,000 in a brokerage account and cash. They plan to delay Social Security until 70 for the higher earner, and they cover living expenses from their brokerage account, generating about $30,000 a year of taxable income from interest, dividends, and gains.
If they convert $150,000 a year from their traditional IRAs, their income for the year is about $180,000, which is below the $218,000 IRMAA threshold. After the $32,200 standard deduction, their taxable income is about $147,800. Under 2026 brackets, the federal tax on that is roughly $21,900, an average rate of about 14.6% on the converted amount, even though the top dollars are taxed at 22%.
Do that for several years before Social Security starts and before RMDs begin, and they've moved a large portion of their traditional balance into a Roth at an average rate well under what they might pay later. And here's the part that often gets overlooked: when one spouse passes away, the survivor files as a single taxpayer. A surviving spouse with roughly $122,000 of income can already be in the 24% bracket on the top dollars, even though the household's spending has barely changed. Converting while both spouses are alive can help soften that.
What does a Roth conversion cost, and where should the tax come from?
The conversion itself has no fee, but the tax bill can be substantial. The single most important rule is to pay it from money outside the IRA, such as a brokerage account or savings. If you use part of the conversion to pay the tax, you permanently shrink the amount working for you in the Roth, and if you're under 59½, the portion withheld can be treated as an early distribution subject to a 10% penalty.
Because the tax is due the following April, it's also worth setting aside the cash in advance and checking whether you need to make an estimated tax payment so you don't face an underpayment penalty.
Can I undo a Roth conversion?
No. Since 2018, Roth conversions can't be recharacterized, which means once you convert, it's final. Before the law changed, people could reverse a conversion if the market dropped after they converted. That option is gone, so the decision needs to be made carefully.
This is also why timing matters. Conversions must be completed by December 31 of the tax year. Unlike IRA contributions, there is no extension to April 15. If you're thinking about a conversion for 2026, the window is closing, and the weeks between now and year-end are when most of the real planning decisions get made, because by this point you have a much clearer picture of your income for the year.
What are the five-year rules?
There are two separate five-year rules, and they're easy to confuse.
The first applies to earnings. To withdraw Roth earnings tax-free, you generally need to be 59½ or older and have had a Roth IRA open for at least five tax years.
The second applies to each conversion individually. If you withdraw converted principal within five years of the conversion and you're under 59½, you may owe a 10% penalty on the amount that was taxable when you converted it. After age 59½, this penalty no longer applies, which is one reason many conversion strategies are designed around the years after 59½.
What is the pro-rata rule, and why does it matter?
If you hold both pre-tax and after-tax money in traditional IRAs, the IRS treats all of your traditional, SEP, and SIMPLE IRAs as one pool when you convert. You can't choose to convert only the after-tax dollars. Instead, each conversion is taxed proportionally based on the share of pre-tax money in the pool as of December 31.
This catches a lot of people off guard, especially those who've made nondeductible IRA contributions over the years. Before converting, it's worth confirming the basis you've tracked on IRS Form 8606.
Will a Roth conversion affect my Medicare premiums?
It can, and this is the most common unintended consequence. Medicare uses your income from two years earlier to set your premium. A large conversion in a single year can push you into a higher IRMAA bracket two years later, for both you and your spouse.
That doesn't mean you shouldn't convert. It means each conversion should be sized with IRMAA in mind, and in some cases split across years. If you've just retired or your income has dropped since the year Medicare is looking at, you can ask the Social Security Administration to use a more recent year by filing Form SSA-44.
Does a conversion affect the senior deduction or other tax benefits?
It can. The 2025 tax law created a temporary additional deduction for taxpayers 65 and older, available for tax years 2025 through 2028, that phases out at higher income levels. Because conversion income raises your adjusted gross income, a large conversion can reduce or eliminate that deduction. The same is true for other income-tested items such as the taxability of Social Security, certain credits, and the deductibility of medical expenses. This is one of the reasons conversion planning works best as part of a full tax projection rather than as a standalone decision.
What if I'm already taking Required Minimum Distributions?
You can still convert, but you must take your full RMD for the year first. RMDs themselves can't be converted. After the RMD is satisfied, additional distributions can be converted to Roth. For people who start the conversation after RMDs begin, the benefits are often smaller but can still be meaningful, especially for heirs.
Does South Carolina tax Roth conversions?
Yes, conversion income is generally included in South Carolina taxable income, though the state's retirement income deduction and the additional deduction for residents 65 and older can offset part of it. South Carolina doesn't tax Social Security benefits, which keeps the state picture simpler than in many other places. The federal side drives most of the conversion decision, but it's worth including the state in your projection.
What are the most common Roth conversion mistakes?
Converting too much in one year and tripping an IRMAA threshold or a higher bracket without realizing it.
Paying the tax from the IRA instead of from outside money.
Ignoring the pro-rata rule and being surprised by the tax bill.
Converting without looking at the impact on Social Security taxation and Medicare premiums.
Treating conversions as a one-time event rather than a multi-year strategy.
Waiting until the end of December to decide, when there's no time left to adjust.
Not coordinating with a tax preparer who needs to file the right forms the following spring.
How do I decide whether Roth conversions make sense for me?
A short framework:
Start with a multi-year tax projection. Look at your expected income and tax bracket each year from now through age 80 or beyond, including Social Security, RMDs, and the likelihood that one spouse will eventually file as a single taxpayer.
Identify your low-income window. For many pre-retirees, it's the stretch between the last paycheck and the start of Social Security and RMDs.
Set your ceiling. Decide which bracket or Medicare threshold you want to stay under each year.
Plan the funding. Make sure the tax can be paid from outside the IRA without disrupting your cash flow.
Revisit every year. Tax law changes, markets move, and your plans change. A conversion plan that made sense two years ago may need adjusting.
If you're 50 to 65 and wondering whether Roth conversions belong in your retirement income plan, I'd be glad to talk. You can reach us at:
Phone: 864-232-8111
Text: 864-301-1888
Online: streetwealthmanagement.com
About Bart Street, CFP®
Bart Street, CFP®, is the founder of Street Wealth Management in Greenville, South Carolina, where he focuses on retirement income planning, tax-efficient withdrawal strategy, and account-taxability diversification for pre-retirees and retirees in the Upstate. He holds the Certified Financial Planner™ designation, the Series 65 Uniform Investment Adviser Law license, the Series 63 Uniform Securities Agent State Law license, and the Series 6 securities license. Securities and investment advisory services are offered through Osaic Wealth, Inc., member FINRA/SIPC.
Compliance disclaimer
This article is for educational purposes only and is not personalized investment, tax, or legal advice. The example above is hypothetical, is provided for illustration only, and does not represent the results of any actual client. Tax brackets, deduction amounts, IRMAA thresholds, and other figures reflect 2026 amounts, are subject to change, and may not reflect your specific situation. Roth conversions are irreversible and may increase your current tax liability. Consult a qualified tax professional before making any conversion decision.
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