Jordan Rosenfeld

Sat, Jun 14, 2025, 12:01 PM5 min read

A Roth conversion is the process of rolling over retirement funds invested in a pretax account, like a regular IRA or 401(k), into an after-tax Roth IRA. You’ll pay capital gains taxes at the time of rollover, but you won’t pay taxes in retirement when it’s time to withdraw from the Roth.

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While a conversion can be the right thing for some retirees, or soon-to-be-retirees, to do finance experts suggested 10 times you should not do a Roth conversion.

“One of the biggest mistakes people make with Roth conversions is assuming they’re always a good idea, according to Stephan Shipe, CFP, founder and CEO of Scholar Advising. However, he said, “If you’re still working and expect your income to drop in retirement, it often makes sense to wait. Paying taxes now at a high rate, when you could defer and pay at a lower rate later, can undermine the strategy entirely.”

Shipe said that Roth conversions are best timed during low-income years, such as after retirement but before required minimum distributions or Social Security benefits begin.

“That window creates an opportunity to shift assets without pushing into higher tax brackets or triggering IRMAA (Income-Related Monthly Adjustment Amount, for Medicare) surcharges,” he said.

Another overlooked point is that tax law isn’t fixed, Shipe pointed out. “Roths are appealing because they hedge against future tax increases, but conversions are taxed under today’s laws.” With the odds of higher tax rates in the future, that hedge only has value if it doesn’t strain your cash flow or jeopardize other parts of a financial plan, he explained.

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If you’re close to retirement, you’re probably in your highest earning years and facing your highest tax brackets, which is a good reason to think twice about a Roth conversion, according to Carson McLean, founder and lead wealth advisor at Altruist Wealth Management.

“Doing a Roth conversion while in a peak tax bracket means you pay more tax now than you might need to. For most people, it is better to wait until after they retire, when income drops and they fall into a lower bracket,” McLean said.

That window between retirement and when required minimum withdrawals (RMDs) or Social Security start is usually the best time to do conversions, because you can control your taxable income and minimize the tax bill.