For new retirees: To Roth or not to Roth?

Roth conversions can be a useful way to trade taxes today for tax-free income later, but the strategy is far from automatic.

With RMD ages rising under SECURE 2.0, some retirees may benefit from keeping assets tax-deferred longer, especially if they expect lower taxes in retirement. Yet life events, Social Security taxation, Medicare IRMAA surcharges, and changes in household income can quickly alter the picture and push clients into higher brackets.

The best opportunities often come during lower-income years before Social Security begins or when planning for heirs who may face higher taxes. For many investors, partial conversions and careful timing are more effective than moving all traditional assets at once.

Advisors should weigh Roth moves alongside charitable giving goals, health insurance subsidies, and estate plans. In this environment, personalized analysis matters more than broad rules of thumb.