The question “how much should I convert to Roth IRA” has become one of the most important topics in retirement planning in 2025. With potential tax law changes approaching, many Americans are considering Roth conversions as a way to secure tax-free growth for the future.
Deciding how much to convert isn’t a one-size-fits-all decision. It involves tax bracket strategy, current and future income expectations, required minimum distributions (RMDs), and the latest updates under U.S. tax law — including provisions from the SECURE 2.0 Act.
This detailed guide breaks down everything you need to know to make informed decisions about Roth conversions this year.
Table of Contents
Why Roth IRA Conversions Are So Popular Right Now
Roth IRAs have long been attractive because qualified withdrawals in retirement are tax-free. Unlike traditional IRAs and 401(k)s, Roth IRAs have no required minimum distributions during the original owner’s lifetime. This gives retirees more control over when and how they access their savings.
In 2025, Roth conversions are especially relevant because of the scheduled expiration of current tax rates. The 2017 Tax Cuts and Jobs Act lowered individual tax brackets, but those rates are set to sunset after 2025, potentially leading to higher taxes in 2026 and beyond.
For many, this means converting money from a traditional IRA or 401(k) to a Roth IRA while tax rates are still historically low could be a smart move.
How a Roth Conversion Works
A Roth IRA conversion involves transferring funds from a tax-deferred account (like a traditional IRA or 401(k)) into a Roth IRA. When you do this, you pay income tax on the converted amount in the year of the conversion, but the money then grows tax-free and can be withdrawn tax-free in retirement.
Basic Steps of a Roth Conversion
- Choose the amount to convert from your traditional IRA or 401(k).
- The converted amount is added to your taxable income for that year.
- Pay any federal and state taxes owed on the conversion.
- Once the funds are in the Roth IRA, they grow tax-free going forward.
How Much Should You Convert? Key Factors to Consider
The heart of the question “how much should I convert to Roth IRA” depends on your tax situation and financial goals. Converting too much could push you into a higher tax bracket, while converting too little may leave future RMDs or taxes unaddressed.
Here are the main factors to weigh:
1. Your Current Tax Bracket
One of the smartest strategies is to convert enough to “fill up” your current tax bracket, but not so much that you move into a higher one. This allows you to optimize your tax bill in the conversion year.
For example, if you’re in the 22% bracket, you might choose to convert just enough to bring your taxable income up to the top of that bracket — but not beyond.
| Filing Status | 22% Bracket Ends At (2025) |
|---|---|
| Single | ~$100,525 |
| Married Filing Jointly | ~$201,050 |
(Figures rounded for simplicity. Tax brackets adjust annually.)
If your income is $80,000 as a single filer, you could potentially convert $20,000 without leaving the 22% bracket.
2. Your Expected Future Tax Rates
Roth conversions make the most sense when you expect your future tax rate to be equal to or higher than your current rate.
For example, if you’re currently in a relatively low bracket but expect Social Security, pensions, and RMDs to push you into a higher bracket later, converting now could save significant taxes down the road.
3. Time Horizon Until Retirement
The longer your money stays in the Roth IRA after conversion, the more time it has to grow tax-free. Converting earlier in your career or early in retirement gives the converted dollars more compounding potential.
Someone converting at age 55 could enjoy 20–30 years of tax-free growth. A conversion at age 70, while still beneficial for RMD control, has less time to grow.
4. Impact on Medicare Premiums and Other Benefits
Large conversions can increase your Modified Adjusted Gross Income (MAGI), which may affect:
- Medicare Part B and D premiums (IRMAA surcharges)
- Social Security taxation
- Eligibility for certain deductions or credits
For retirees near Medicare thresholds, carefully managing the conversion amount can help avoid unexpected premium hikes.
5. Available Cash to Pay Taxes
It’s usually best to pay the conversion taxes with money outside of the retirement account. Using IRA funds to pay the tax reduces the amount that can grow tax-free in the Roth.
If you don’t have sufficient cash to pay the tax bill, you might consider smaller, phased conversions over multiple years.
Roth Conversion Strategies in 2025
Given the current tax environment, many savers are using strategic approaches to decide how much to convert to Roth IRA each year.
Strategy 1: Fill Up Your Current Tax Bracket
This is one of the most widely recommended methods. Determine your taxable income, calculate how much room is left in your current bracket, and convert just enough to fill that space.
Example:
A married couple has $150,000 of taxable income. The 22% bracket for joint filers goes up to ~$201,050. They might convert $50,000 to fully use the 22% bracket without bumping into 24%.
This approach allows you to minimize taxes while steadily shifting assets into tax-free territory.
Strategy 2: Multi-Year Conversions
Rather than converting a large amount in a single year (which could trigger a tax spike), many savers choose to spread conversions over several years.
This phased approach:
- Keeps each year’s tax bill manageable.
- Reduces the risk of crossing into higher brackets.
- Allows you to adjust annually based on tax law or income changes.
Strategy 3: Pre-RMD Conversions
For people in their 60s or early 70s, a powerful approach is converting before RMDs begin at age 73. Once RMDs start, you can’t convert those amounts — and RMDs increase taxable income, which can limit your conversion flexibility.
Converting strategically during the “gap years” between retirement and RMD age can significantly reduce future RMDs and taxes.
Strategy 4: Take Advantage of Lower Tax Rates Before 2026
With tax rates scheduled to rise in 2026, 2025 is a pivotal year for many conversions. Some savers are intentionally converting larger amounts than usual to lock in today’s lower rates.
While this increases their current tax bill, they believe it will save more over the long term if tax brackets increase as planned.
How Conversions Affect Future RMDs
Traditional IRAs and 401(k)s are subject to Required Minimum Distributions starting at age 73. RMDs can cause:
- Forced taxable income even if you don’t need the funds
- Higher Medicare premiums
- Increased taxation of Social Security benefits
Roth IRAs, by contrast, have no RMDs during the original owner’s lifetime. By converting now, you shrink your future RMD base, giving you more tax control in retirement.
When a Roth Conversion May Not Make Sense
While Roth conversions offer powerful benefits, they’re not always the right move.
- If your current tax rate is much higher than your expected future rate, converting may increase your lifetime tax bill.
- If you don’t have cash to pay the taxes, large conversions could reduce the effectiveness of the strategy.
- Conversions can affect Medicare premiums and other benefits if not managed carefully.
This is why the amount you convert matters as much as the decision to convert at all.
Key Takeaway
The question “how much should I convert to Roth IRA” doesn’t have a universal answer. The ideal amount depends on your tax bracket, time horizon, income expectations, and financial goals.
For many Americans in 2025, converting enough to fill their current tax bracket, while avoiding spikes in Medicare premiums or moving into higher tax tiers, is a smart, strategic approach — especially with scheduled tax rate increases in 2026.
Phased, well-planned conversions can help you reduce future RMDs, lock in lower tax rates, and build a powerful tax-free income source in retirement.
Frequently Asked Questions
1. Can I convert my entire traditional IRA to a Roth IRA in one year?
Yes, but the converted amount will be fully taxable, which could push you into higher tax brackets. Many savers prefer multi-year conversions to manage taxes.
2. What happens if I don’t have cash to pay the taxes on a conversion?
You can use IRA funds to pay the tax, but it reduces the amount that moves into the Roth. It’s generally better to use non-retirement funds if possible.
3. Are Roth conversions still beneficial if I’m close to retirement?
Yes — particularly to reduce RMDs and future taxable income. Even conversions in your 60s can offer benefits if managed carefully.
Disclaimer:-This article provides general information about Roth IRA conversions for U.S. taxpayers and should not be considered financial, tax, or legal advice. Consult a qualified tax professional or financial advisor for advice specific to your situation.