We get this question regularly from clients in Beavercreek, Centerville, and across the Miami Valley: “Should I convert my IRA or 401(k) to a Roth?” The honest answer is: sometimes yes, sometimes no, and the difference between those two answers can mean tens of thousands of dollars in taxes over a retirement.
Here is how to think through it.
What Is a Roth Conversion?
A Roth conversion moves money from a traditional IRA or pre-tax 401(k) into a Roth IRA. You pay income tax on the amount converted in the year you do it. In exchange, the money grows tax-free in the Roth, and qualified withdrawals in retirement are tax-free. You also eliminate Required Minimum Distributions (RMDs), which traditional IRAs impose starting at age 73.
Why Retirees Consider It
There is a specific window that makes Roth conversions attractive for many retirees. The gap between when you stop working and when Social Security and RMDs begin can be a period of unusually low taxable income. If your income temporarily drops into a lower tax bracket, you can convert pre-tax IRA money to Roth at a lower rate than you may face later. This matters because RMDs at 73 can push some retirees into surprisingly high brackets. By converting in early retirement, you can smooth your lifetime tax burden and reduce the size of future forced distributions.
The Ohio Tax Angle
Ohio’s income tax rates have been reduced substantially in recent years. For tax year 2025, the top rate on nonbusiness income above $100,000 was cut to 3.125%, and further reductions have been enacted since (Ohio Department of Taxation). Confirm the rate for your filing year before running any projection. Ohio does not tax Social Security benefits, but it does tax IRA withdrawals and Roth conversions as ordinary income at the state level. When modeling a conversion, you need to include both federal and Ohio state tax in the year of conversion. For most Dayton-area retirees, the federal picture dominates, but Ohio’s rates are not nothing, especially on large conversions.
The IRMAA Trap
This is where Roth conversions most commonly go wrong. Medicare Part B and Part D premiums are income-based through a system called IRMAA. If your Modified Adjusted Gross Income exceeds certain thresholds (for 2026, $109,000 for single filers and $218,000 for couples, per the CMS 2026 premium fact sheet), you pay higher Medicare premiums for the following two years. A large conversion that pushes you over an IRMAA threshold can easily add $1,000 to $4,000 in extra Medicare costs per person per year. We have seen conversions that looked efficient on paper cost far more once IRMAA was factored in. This is the most frequently overlooked piece of the analysis.
Who Benefits Most from Converting
Roth conversions tend to produce the most benefit when you are in a temporarily low tax bracket in early retirement, you have a large traditional IRA or 401(k) that will generate substantial RMDs at 73, you have non-IRA funds available to pay the conversion tax (so you are not depleting the account itself), and you have a long time horizon for Roth growth. They are also valuable when you want to leave a tax-free inheritance to your heirs, since Roth IRAs do not have RMDs and beneficiaries receive distributions tax-free.
How Much to Convert Each Year
The general approach is to convert up to the top of your current tax bracket without crossing into the next one, while also staying below IRMAA thresholds. For a married couple filing jointly, the top of the 22% federal bracket and the first IRMAA threshold sit close enough together that they often bind at the same time. For 2026 the first joint IRMAA threshold is $218,000 in MAGI (CMS); federal bracket figures are indexed annually, so check the current year’s tables before sizing a conversion. Converting to fill that bracket while staying below IRMAA is a common strategy. This is not a one-time calculation. Your income changes year to year, brackets adjust for inflation, and IRMAA thresholds shift. A Roth conversion strategy needs to be revisited annually.
Common Mistakes to Avoid
Beyond IRMAA, the most frequent errors we see include: converting so much in one year that it triggers ACA marketplace subsidy clawbacks for pre-Medicare retirees, not accounting for Ohio state tax in the analysis, paying the conversion tax from the IRA itself instead of outside funds (which reduces efficiency), and converting before completing broader retirement income planning that might change projected brackets.
Getting the Math Right
A Roth conversion analysis is not conceptually complicated, but getting it right requires projecting your income, tax brackets, RMDs, Medicare costs, and estate goals for the next 10 to 20 years. Generic advice about “always convert to Roth” misses the point. The right answer depends entirely on your specific numbers.
If you are a Dayton-area retiree wondering whether a Roth conversion fits your situation, our Beavercreek team can work through the analysis with you. Contact us to review your retirement income picture.
Sources
- CMS — 2026 Medicare Parts A & B Premiums and Deductibles (IRMAA brackets)
- Ohio Department of Taxation — What’s New — individual income tax rates
This article is general educational information, not individualized financial, tax, or insurance advice. Medicare and tax figures are adjusted annually — confirm current-year amounts with the agency or your plan documents before acting on them.