Roth Conversions (2025)

Roth conversions involve paying income tax now to obtain tax-free withdrawals later. Evaluate timing and tax-bracket impact.

Why Convert?

  • Lock in lower tax rates if you expect higher future rates
  • Eliminate RMDs on converted funds in some cases
  • Estate planning benefits for heirs

Tax Considerations

Conversion amount is taxable in the year of conversion. Consider partial conversions to manage bracket impact and use 2025 brackets for planning.

Practical Steps

  1. Estimate current-year tax impact
  2. Consider spreading conversions over multiple years
  3. Coordinate with Roth contribution or backdoor Roth strategies