Andrea in Connecticut called into Ask An Advisor With Wes Moss with a question worth real money: her employer offers an in-plan Roth conversion, she retires next year, and she wants to know whether to convert now or withdraw from the traditional IRA after retirement. Get this wrong by even one tax bracket and you hand the IRS tens of thousands of dollars that never needed to leave your account.
I’ve been watching the Roth conversion conversation for the better part of a decade, and the marketing around it has gotten loud enough to drown out the math. Moss cut through it in one paragraph.
The quote that frames the whole decision
Moss told Andrea, “if you’re in the 30% tax bracket today and you’re working, you have a high income, to convert money into from the 401 to the Roth will cost you 30% in taxes or maybe more because it’ll push up your income. But if you get to retirement and your retirement tax rate is 15%, then it is not a good idea to do a Roth conversion.”
He followed with the rule that makes the rest of the decision click: “It’s about taxes today versus taxes in the future. Why pay 30% today when if you wait a year, you’ll be pulling money out of 15%?”
Why Moss is right, with the math
A Roth conversion is a prepayment of income tax. The only question that matters is whether the rate you pay today is lower than the rate you would pay later.
Picture Andrea as a married joint filer with $220,000 of household wages in her final working year. Under the 2026 brackets, the 24% rate runs to $403,550 for joint filers, and 32% kicks in above that. If she converts $200,000 from the traditional 401(k) this year, that conversion stacks on top of her wages. A big chunk lands in the 24% bracket and the top slice lands in 32%. Rough federal cost on the conversion alone: north of $50,000.
Now run the alternative. She retires, delays Social Security, and pulls $80,000 a year from the traditional IRA. After the $32,200 standard deduction for joint filers in 2026, her taxable income sits inside the 12% bracket. Spreading the same $200,000 over several retirement years at that rate costs roughly $24,000 in federal tax.
That is a five-figure savings for doing nothing except waiting. This is the exact trap Moss is warning Andrea away from.
The one variable that can flip the answer
Moss flagged it himself: “there are still millions of Americans that find themselves in higher tax brackets because they might have a pension and when they get into their 70s, they have big IRAs. And those IRAs produce RMDs.”
Required minimum distributions stack on top of Social Security and any pension. If Andrea is sitting on a $1.5 million traditional balance, a pension, and full Social Security, her income at 73 could easily push her into the 22% or 24% bracket even without working. In that world, converting now at 24% while she still has control is the bargain.
The test is simple: project your taxable income at age 73 assuming RMDs of roughly 4% of your traditional balance, plus 85% of Social Security as taxable, plus any pension. If that number lands in a higher bracket than your current one, conversions help. If it lands lower, they hurt.
What Andrea, and you, should actually do
- Pin down your current marginal rate. The marginal rate, meaning the rate on the next dollar. For most pre-retirees still working, that is 22%, 24%, or 32%.
- Model your age-73 income. Add projected RMDs (4% of traditional balances is a workable starting point), 85% of expected Social Security, and any pension. Compare that to today’s bracket.
- If retirement is the lower bracket, do not convert. Withdraw from the traditional account in retirement and pay the lower rate Moss is pointing at.
- If retirement is the higher bracket, convert in chunks. Moss’s warning here is concrete: “be careful not to do too big of a conversion all at once because the conversion itself increases your income, which increases your tax bracket.” Size each conversion to fill your current bracket and stop.
- Use the gap years. The window between retirement and the start of Social Security and RMDs is usually the lowest-tax stretch of an entire adult life. That is the prime conversion window, not the final working year.
Andrea’s instinct to ask before clicking the button is the entire game. The expensive move is assuming the answer is yes because the internet said Roth conversions are always smart. They are a bet that your future tax rate will be higher than today’s, and for someone retiring next year out of a high-income job, that bet usually loses.
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