The Roth series · By Rich LoPresti, CFP®
The Roth isn't a tax break. It's a steering wheel.
Most people think of the Roth as "tax-free growth." That's true, but it's the least interesting thing about it. In retirement, the Roth is the account that lets you steer.
The short answer. In retirement, almost everything is driven by one number: your income. It sets your tax bracket, your Medicare premiums, how much of your Social Security is taxed, and in Connecticut, whether your retirement income is exempt from state tax. Each of those uses its own version of the number, but the pattern holds: every dollar you take from a pre-tax 401(k) or IRA counts, and a qualified Roth withdrawal doesn't. Cash and taxable savings give you some room to steer too. The Roth is the account that lets you decide what your income looks like each year, instead of your accounts deciding it for you. It isn't right for everyone, and it costs tax to build. But I don't think most people realize how much flexibility it buys.
Same withdrawal, two very different tax returns.
Here's the easiest way I know to show it. Say that in your second year of retirement you need a new roof, a new car, or you're helping pay for a wedding. You need $30,000 that isn't in your normal budget. Where it comes from changes everything.
| What the $30,000 touches | Taken from a traditional IRA | Taken from a Roth |
|---|---|---|
| Taxable income | Goes up by $30,000 | Doesn't change |
| Tax bracket | Can push you into the next one | Stays where it was |
| Social Security | Can make more of your benefit taxable | No effect |
| Medicare premiums | Can trigger a surcharge two years later, for both spouses | No effect |
| Connecticut exemptions | Can shrink them | No effect |
| What you have to take out | More than $30,000, if the withdrawal also pays its own tax | $30,000 |
Illustration of how each withdrawal is treated, not an estimate of anyone's tax. Assumes fully pre-tax IRA money and a qualified Roth distribution. Whether a threshold is crossed depends on your other income.
Nothing about your life changed between those two columns. The only thing that changed is which account wrote the check. That's what I mean by a steering wheel.
The blend: where the Roth really earns its keep.
Here's the part people miss. The Roth doesn't only help when you spend from it. It makes your IRA more efficient too.
Every year, I want my clients to land in a tax bracket on purpose. With money in both kinds of accounts, you can take from the IRA up to the top of the bracket you've chosen, then take whatever else you need from the Roth. The tax return sees exactly the income you planned, no more.
How a blended withdrawal works
Fill the bracket from the IRA. Use the Roth for the rest.
Bar lengths are illustrative only. The right mix changes every year with your income, spending and the tax rules.
Without a Roth, extra dollars come out of the IRA at whatever rate they happen to land at, or out of cash and taxable savings while those last. With one, you have a choice every single year. Over a 25- or 30-year retirement, that adds up.
Everything your income touches.
People are often surprised by how much in retirement depends on income, and how little of it a Roth affects:
- Your federal bracket. Qualified Roth withdrawals aren't taxable income.
- Social Security. Up to 85% of your benefit can be taxed, depending on your other income. Qualified Roth withdrawals aren't counted in that test.
- Medicare premiums. Higher income raises Part B and Part D premiums, based on your tax return from two years earlier. Qualified Roth withdrawals don't count.
- Health insurance before 65. If you retire early and buy coverage on the exchange, the help with premiums is based on income. Qualified Roth withdrawals don't count.
- Connecticut. The state's exemptions for pension, IRA and Social Security income depend on your federal adjusted gross income. Qualified Roth withdrawals don't raise it.
Nobody makes you take it out.
Traditional IRAs and 401(k)s come with required withdrawals starting at 73, or 75 if you were born in 1960 or later (a 401(k) at a job you still have can usually wait). Whether you need the money or not, it comes out and it's taxed.
A Roth IRA has no required withdrawals during your lifetime, and since 2024 neither does a Roth 401(k). You decide if and when that money comes out. If you don't need it, it can keep growing, untaxed, for as long as you live.
On a large pre-tax account that keeps growing, required withdrawals can become the biggest income line in retirement. The freight train →
It protects the people you leave behind.
Your spouse. When one spouse passes away, the survivor usually ends up filing as a single person on nearly the same income, with most brackets about half as wide. Roth money doesn't appear on that tax return. A spouse who inherits a Roth can generally treat it as their own. I explain this in One of you will file alone. The tax code will notice.
Your children. Most children who inherit a retirement account have to empty it within ten years. From a traditional IRA, every pre-tax dollar is taxed on top of their own salary, often in their peak earning years. From a Roth, it generally comes out tax-free.
A hedge against not knowing.
Nobody knows what tax rates will be in 2040. Not me, not your accountant, not Congress. If all your savings are pre-tax, you're making a thirty-year bet that rates will be the same or lower when you take the money out.
Having money in all three buckets, taxable, tax-deferred and tax-free, means you don't have to guess. Whatever the rules turn out to be, you have a choice about which account to use.
What the Roth can't do.
I believe in the Roth, but I want to be straight about its limits:
- It costs tax to build. Roth contributions and conversions are paid for with tax today. That's a real cost.
- It isn't always the better deal. If your income in retirement will be much lower than it is now, or you plan to leave most of your savings to charity, pre-tax money may serve you better.
- It has rules. Tax-free withdrawal of growth generally requires a five-year period and age 59½, or another qualifying event, and there are income limits on contributions.
- It isn't magic. A Roth holds investments, and investments can lose value.
How to build one.
If you're convinced the Roth belongs in your plan, there are three main ways to get money into it. Each has its own article:
- While you're still working. Switch your 401(k) contributions to the Roth side, make Roth IRA contributions if you qualify, and consider small conversions. If you believe in the Roth, why are you still feeding the IRA?
- In the gap years. Between your last paycheck and your first required withdrawal, your tax rate is often the lowest it will be. The best years to convert are the ones right after the paychecks stop.
- When you're unsure. Paying the tax, the five-year rules, and what your accountant thinks. Three reasons people put off Roth conversions, and the honest answer to each.
And if all your savings sit in one blended fund, it's harder to put the right investments in the Roth. I explain why in One fund got you here. Spending it takes a plan.
Bring it back to your plan
Four questions worth asking
- How much of my savings is pre-tax, how much is Roth, and how much is taxable?
- If I needed a large amount of cash in retirement, which account would it come from?
- How close will my income be to a Medicare or Connecticut threshold?
- Who inherits my retirement accounts, and how would that money be taxed for them?
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. Whether to contribute to or convert to a Roth depends on your income, tax rates now and later, health, state and goals.
- The $30,000 example is an illustration. It shows how each withdrawal is treated under the tax rules, not any tax owed or saved.
- The rules have details. Qualified distributions, five-year periods, income limits and inherited-account rules have exceptions not covered here.
- Tax law changes. The rules described are as they stand in 2026.
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 →See where your steering wheel is.
An hour is enough to see how your savings are split between the three buckets, and how much room you have to steer your income in retirement.
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. Qualified Roth distributions require a five-year holding period and age 59½, death or disability; nonqualified distributions of earnings may be taxable and subject to penalty. Roth IRA contributions are subject to income limits. Roth conversions are taxable in the year they occur and cannot be recharacterized. Investing involves risk, including loss of principal. Consult a qualified tax advisor. 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.