How Much Money Should You Convert to a Roth Each Year?

The right Roth conversion amount could save you taxes, while converting too much could trigger costly surcharges.

Roth conversions can deliver major tax benefits, but knowing how much to convert is crucial. Jack_the_sparow/shutterstock

A Roth conversion allows you to turn funds in a traditional IRA into a Roth IRA. As a result, you get to enjoy qualified tax-free withdrawals in retirement. And you avoid the required minimum distributions (RMDs) that may trigger major tax consequences for retirees.

However, a Roth conversion can also set off surprise tax bombs if you convert a large enough amount. But if you convert too little, you could be letting substantial tax savings slip away.

Luckily, there’s no maximum or minimum as to how much money you can convert to a Roth IRA.

So how much should you convert into a Roth IRA? Let’s see what the experts say.

Convert Only Enough to Fill Lower Tax Brackets

The IRS treats the amount of money you convert into a Roth IRA as ordinary taxable income for the year in which you made the conversion.

So many financial advisers recommend you convert just enough to fill the marginal income tax bracket you’re currently in without converting enough to push you into a higher one.

So let’s see how you can do that step-by-step.

First, determine your taxable income for the year from all sources. This includes the following.

• Wages
• Social Security checks
• Pension payments
• Dividends and interest

Next, subtract your standard or itemized deductions. Most people take the standard deduction. In calculating how much of your social security income is taxable, the Social Security Administration has a website calculator that is highly useful.

Then, check to see the highest level of your current tax bracket and see how much room there’s left before reaching the next highest one.

Now, let’s crunch some numbers.

Suppose you’re a 45-year-old individual with gross income for the year of $80,000 and you’re filing single. Subtract the standard deduction of $16,100 to get $63,900 in taxable income. That puts you in the 22 percent tax bracket. The top level for that bracket is $105,700.

That means you have $41,800 to “fill” the 22 percent tax bracket before you spill into the 24 percent tax bracket.

So you can convert around $41,800 and stay in the 22 percent tax bracket, making it a potentially tax-efficient move.

But higher income individuals may need to tread a bit more lightly.

That’s because Roth conversions could increase your modified adjusted gross income (MAGI). And if it’s high enough, it could trigger major surcharges on your Medicare Part B and Part D premiums. These surcharges are called the Income-Related Monthly Adjustment Amount (IRMAA).

So you should be aware of key thresholds you may want to avoid crossing—especially if you’re near or over age 65. That’s the age when you begin qualifying for Medicare.

IRMAA Thresholds

The Social Security Administration (SSA) determines whether you owe IRMAA to your Medicare premiums by looking at your MAGI from two years prior.

You may face IRMAA in 2026 if your 2024 MAGI was greater than $109,000 as an individual filer or if it was larger than $218,000 for couples filing jointly.

So you may want to run the IRMAA thresholds against your total MAGI. This would include the Roth conversion amount.

If you’re in the 24 percent tax bracket, which opens at $105,701 in income, you may have little room to convert before you cross the IRMAA thresholds.

But a Roth conversion could still make sense if the pros outweigh the cons. Think about how much tax-free withdrawals in retirement, the avoidance of RMDs, and protection from potential future tax rate increases may benefit you.

Pro Tip: Timing Matters

Some financial advisers recommend considering Roth conversions during the sweet spot or gap years. This is generally the time after you retire, but before you begin collecting Social Security checks and before RMDs kick in (age 73 or 75, depending on birth year).

In theory, you would be in your lowest tax bracket at this time and have strong control over how you manage your cash flow from existing accounts.

But there’s more you should be aware of.

Understand the 5-Year Rule

The five-year rule is key to the mechanism of a Roth IRA. But here’s what you need to know about this rule when it specifically comes to Roth conversions.

In order to withdraw converted funds and their earnings tax-and-penalty-free, you must meet the following criteria.

• Have had the Roth account for at least five years

• Be at least 59.5 years old

If you withdraw converted funds before five years have elapsed and you’re under age 59.5, you will likely face a 10 percent penalty on any pre-tax assets that were converted as well as the earnings. Plus, you’d owe income taxes on those earnings.

The Bottom Line

The right amount to convert depends on a variety of personal factors. These include your income, your current and future tax situation, your Medicare situation and more.

And remember, Roth conversions could be most ideal when you’d be in a higher tax bracket in the future than the one you are in now.

But you can also strategically make Roth conversions over time. This is known as staggering conversions. Nonetheless, you must understand that every conversion has its own five-year rule.

As you can see, a Roth conversion can be as beneficial as it is complex. So it’s important to discuss this strategy with a qualified tax professional before you move forward.

The Epoch Times copyright © 2026. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.