The Roth series · By Rich LoPresti, CFP®
Three reasons people put off Roth conversions, and the honest answer to each.
Almost everyone who sits in front of me has heard of Roth conversions. Very few have done one. It's usually one of the same three reasons.
The short answer. The three objections I hear most are: "I don't want to pay the tax out of my savings," "the five-year rule scares me," and "my accountant told me not to." Each one has something true in it. But each one is usually answering a one-year question, when a Roth conversion is a ten-to-twenty-year decision. The tax on your pre-tax accounts is going to be paid by someone, at some point. A conversion is simply deciding who pays it, when, and at what rate. And there are real reasons not to convert, which I'll cover too.
At a glance.
| What people say | What's true | What usually gets missed |
|---|---|---|
| "I don't want to pay the tax from my savings." | A conversion creates a real tax bill this year | The tax on that money is coming anyway. Paying it from savings is what lets the whole amount grow tax-free |
| "The five-year rule scares me." | There are five-year rules, and they're confusing | After 59½ the conversion penalty clock stops mattering, and the money you convert is still yours |
| "My accountant says don't." | A conversion raises this year's tax bill, which is exactly what an accountant is paid to keep low | The conversion decision is about the next 30 years, not this April |
1. "I don't want to write the IRS a check from my savings."
I understand this one completely. You worked hard for that cash, and watching it go to taxes feels like going backwards.
Here's how I think about it. Every pre-tax dollar in a traditional 401(k) or IRA has a silent partner: the government. You put off the tax; you didn't make it disappear. You haven't paid it yet, but you will, or your kids will. When you take money out of an IRA in a 24% federal bracket with Connecticut tax on top, it can take roughly $1.40 out of the account to put $1.00 in your pocket. Out of a Roth, a dollar is a dollar.
So a conversion isn't a new tax. It's the same tax, paid at a time and a rate you choose instead of a time and a rate the IRS chooses for you. The rate can be different, and that's the point: we compare what you keep after tax, not just when you pay it.
And where the tax money comes from matters a lot:
Illustration · converting $10,000 with a 30% combined tax rate
What actually lands in the Roth.
A round 30% rate is used for illustration only. Your actual rate depends on your income, filing status and state. If you are under 59½, tax withheld from a conversion is treated as a withdrawal and can also face a 10% penalty.
When you pay the tax from cash, the full amount goes into the Roth and grows tax-free. When the tax comes out of the conversion itself, less goes in, and if you're under 59½ the amount withheld can be hit with a penalty too. That's why I decide where the tax money comes from before I decide how much to convert.
And there's usually more than one place it can come from:
| Where the tax money comes from | What to check first |
|---|---|
| Cash in the bank | What it's already set aside for. Your emergency reserve, the new roof, next year's spending. Your cash has other jobs |
| Selling taxable investments | Selling can create capital gains, which add to the same year's income |
| An extra IRA withdrawal | That's taxable income too, so you're paying tax on the money you use to pay the tax. Under 59½, it can also face a 10% penalty |
If the money isn't there without squeezing your reserves, the answer isn't to go find it somewhere else. It's a smaller conversion. A conversion that leaves you short today creates a new problem while trying to solve a future one.
2. "The five-year rule scares me."
Honestly, the rules are confusing, and I think some of them are a little silly. But they're more manageable than most people assume. There are really two clocks:
- The account clock. For the growth in your Roth to come out tax-free, your first Roth IRA must have been open for five tax years, and you need to be 59½ or meet another qualifying condition. The clock starts January 1 of the year you first put money into any Roth IRA, so starting one, even a small one, gets it running.
- The conversion clock. Each conversion has its own five-year clock, but it only matters if you're under 59½. Take converted money out before 59½ and within five years, and there can be a 10% penalty on the taxable amount, unless an exception applies. After 59½, that penalty doesn't apply.
And here's the part people miss: the money you convert is still your money. Roth withdrawals come out in a set order, your contributions first, then your conversions, then your growth. The dollars you moved in are generally the first ones that can come back out. In most plans I build, the Roth is the last place we take money from anyway, because it's the most valuable account you own.
3. "My accountant told me not to."
Your accountant isn't wrong to be careful, and I would never tell you to ignore them. But it helps to know what question each of us is answering.
An accountant's job is to get this year's return right and keep this year's bill as low as the rules allow. A conversion raises this year's bill. Looked at one year at a time, it will almost always look like a bad idea.
A Roth conversion isn't a one-year tax move. It's a ten-to-twenty-year chess move. It has to be weighed against things that show up years later:
- Required withdrawals from your pre-tax accounts, starting at 73 or 75, that grow every year whether you need the money or not.
- Medicare premium surcharges that are based on your income, for both spouses.
- The survivor's tax bracket, when one of you is left filing as a single person on nearly the same income.
- Your children, who generally have to empty an inherited IRA within ten years, often in their own peak earning years.
The best outcome is when the accountant and the planner are working together. That's why we coordinate every conversion with whoever prepares the return, including the quarterly estimates, so there are no April surprises.
And when not to convert.
A conversion isn't right for everybody, and I'd rather tell you that up front. It may not make sense if:
- you expect to be in a meaningfully lower bracket later than you are now;
- you don't have cash outside the IRA to pay the tax;
- you'll need the money within a few years, before 59½;
- you plan to leave most of your IRA to charity, which doesn't pay income tax on it; or
- the conversion would push you over a Medicare or state-tax threshold that costs more than it's worth.
Even then, the answer is often "not this much, not this year," rather than "never."
Bring it back to your plan
Four questions worth asking
- Roughly how much of my retirement savings has never been taxed?
- If I converted, where would the tax money come from?
- When did I first put money into a Roth, and when do I turn 59½?
- Has anyone looked at my taxes beyond this year, all the way to my required withdrawals and beyond?
What this article does not show.
Worth being explicit, because an article like this can imply more than it should.
- It is not a recommendation to convert. Whether to convert, and how much, depends entirely on your own income, accounts, health and goals.
- The illustrations are simplified. The 30% rate and $1.40 figure are round numbers for teaching, not estimates of anyone's tax.
- Conversions cost real money and cannot be undone. Since 2018, a Roth conversion can no longer be reversed once it's done.
- The rules have exceptions. Five-year rules, penalty exceptions and inherited-account rules have details not covered here.
Part of a series on the Roth. Start with The Roth isn't a tax break. It's a steering wheel.
Try it on your own dates
Is this worth a look for you?
Two minutes, eight questions, nothing saved. Or map the years between your last paycheck and your first required withdrawal.
Take the two-minute check → Map your conversion window →The timing
Why the years right after the paychecks stop are often the cheapest time to convert.
Read the article →The survivor's bracket
What happens to the tax bill when one spouse is left filing alone.
Read the article →What to convert
Why one blended fund makes it hard to put the right assets in the Roth.
One fund got you here →Bring your questions, and your accountant's.
If you've been told not to convert, or never been told anything at all, an hour is enough to see what the decision looks like over your lifetime, not just this year.
Talk with Rich →Sources: IRS Publication 590-A and Publication 590-B (IRAs and Roth IRAs); IRS 2026 inflation adjustments for tax brackets and standard deductions; Social Security Administration, Medicare Premiums: Rules for Higher-Income Beneficiaries; Connecticut Department of Revenue Services.
Educational content written by Rich LoPresti, CFP®, drawing on recurring planning conversations. It is not a client case study, testimonial or individualized recommendation. Roth conversions are taxable in the year they occur and cannot be recharacterized. Qualified Roth distributions require a five-year holding period and age 59½, death or disability; withdrawals of converted amounts before 59½ may be subject to a 10% penalty within five years of the conversion. Consult a qualified tax advisor before converting. Retirement Approaching provides retirement-planning education. Advisory services are offered through Milestone Asset Management Group, LLC, an SEC-registered investment adviser. Registration does not imply a certain level of skill or training. No investment result or tax savings is guaranteed.