# 5 times a Roth conversion will cost you money > Roth conversions aren't always smart. Here's when skipping one saves you thousands. - Title: 5 times a Roth conversion will cost you money · Kiplinger - Summary: Roth conversions aren't always smart. Here's when skipping one saves you thousands. A Roth conversion only makes sense for your specific situation this year… - Keywords: roth conversion, roth ira, traditional ira, tax planning, retirement planning, tax strategy, required minimum distributions, tax brackets, estate planning, state taxes, financial planning, times - Source: Kiplinger — https://kiplinger.com/taxes/tax-planning/when-you-should-skip-a-roth-conversion - Published: 2026-09-19T14:00:00+00:00 - Read time: 3 min - Topics: roth conversion, roth ira, traditional ira, tax planning, retirement planning, tax strategy, required minimum distributions, tax brackets, estate planning, state taxes, financial planning ## Roth conversions aren't always smart Moving money from a traditional IRA to a Roth can reshape your taxes for decades. But treating conversions as automatic rather than strategic can cost you thousands. > A Roth conversion is a tool, not a virtue. ## The conversion logic explained A conversion works by paying tax now at today's rate to avoid taxes later. This only benefits you if your current tax rate is lower than your expected future rate. ## Problem one: peak earning years Converting during a high-income year means paying tax at one of the highest rates you'll ever see. Wait for a lower-income year, often after you stop working but before required minimum distributions begin at age 73. ## Problem two: no outside cash If you must pull extra from the IRA itself to pay the tax, you shrink the amount reaching the Roth and lose years of tax-free growth. Only convert when you can pay the tax bill from a separate account. ## The math of using IRA funds Converting one hundred thousand dollars with a quarter needed for taxes means only seventy-five thousand reaches the Roth if paid from the IRA. You've lost decades of potential tax-free growth. ## Problem three: lower future taxes Not everyone's taxes rise in retirement. Many people drop into a lower bracket once paychecks stop, especially without large traditional IRA balances. Converting now means paying a higher rate to avoid a lower one. ## Test your retirement income honestly Project your actual retirement income including Social Security and pensions. Don't assume the worst about future tax rates. Sometimes taking ordinary distributions in retirement beats prepaying tax today. ## Problem four: heirs and step-up basis If assets will pass to heirs soon, traditional IRA dollars are taxed as heirs withdraw them. But other assets like appreciated stock get a step-up in cost basis at death, wiping out capital gains for heirs. ## Estate planning changes everything Someone late in life with serious health concerns may not benefit from converting. Spending tax dollars converting a traditional IRA may cost the family money rather than save it. ## Coordinate with an estate attorney Before converting, talk to an estate planning attorney. The reflexive always convert instinct can cost a family money rather than save it in these situations. ## Problem five: state taxes matter If you live in a high-tax state now but plan to retire in a low or no-tax state, converting now means paying state tax you could sidestep by waiting until after you move. ## The full bill includes state taxes The federal math might look fine in isolation, but once you layer your current state's tax on top, the case can fall apart. Analyze the conversion with your specific state in the picture. ## The real pattern: context matters A Roth conversion isn't good or bad on its own. It's good or bad relative to your current bracket, future bracket, outside cash, estate plans, and state taxes. ## Strip away the slogan Always convert sounds responsible and forward-thinking, which is exactly why people follow it without checking whether it fits their own numbers. That's what makes the slogan dangerous. > "Always convert" is just a slogan. ## The right question to ask Before you convert, ask: Does this make sense for me, this year, given everything else? Sometimes the answer is yes. Sometimes the most valuable thing is deciding to wait. > Does this make sense for me, this year, given everything else? ## Key takeaway A Roth conversion only makes sense for your specific situation this year, not as an automatic move everyone should make.