Roth conversion ladders in 2026: when they pay, when they don't

Every retirement-planning article eventually mentions "Roth conversion ladders" as if the answer is obvious. It isn't. A well-timed Roth ladder can save a high-income retiree $50K-$200K in lifetime taxes. A badly-timed one can cost the same.

Here's the math, with the actual 2026 brackets, and the rule of thumb you can apply without a tax advisor.

The basic move

A Roth conversion is straightforward:

1. You have $X in a Traditional IRA or 401(k). That money was contributed pre-tax — you owe income tax on it whenever you withdraw.
2. You move some of it to a Roth IRA. You pay income tax on the converted amount in the year of conversion.
3. The converted dollars now grow tax-free in the Roth, and you'll never owe income tax on them again.

The trade is: pay tax now (at this year's rate) instead of paying it later (at retirement-year-X's rate). It pays off if your CURRENT marginal rate is lower than your FUTURE marginal rate.

The "ladder" part

A Roth conversion ladder is the strategic version: instead of one big conversion, you spread conversions across multiple low-income years so each year's converted amount stays in a lower tax bracket.

The textbook scenario: someone retires at 60 with $1.5M in a Traditional IRA. They have low income from 60-72 (no wages, low Social Security if any, no RMDs yet). Then at 73, RMDs kick in and force them into a higher bracket for the next 20+ years.

The ladder fills the low-income years with controlled Roth conversions — say, $80K/year that stays under the 22% federal bracket — so by age 73, the Traditional IRA balance is smaller and the RMD is smaller.

The 2026 brackets

For Married Filing Jointly:

Bracket	Income range (2026)
10%	$0 – $24,800
12%	$24,800 – $100,800
22%	$100,800 – $214,600
24%	$214,600 – $409,800
32%	$409,800 – $520,250
35%	$520,250 – $780,800
37%	Above $780,800

(Plus the standard deduction: $31,500 MFJ in 2026.)

Source: IRS Rev Proc 2025-42.

For most retirees, the planning question is: "where does the ladder crossover happen — 22% bracket, or 24%?"

When a ladder pays

The math favours conversions when:

1. You're in a low-income year (pre-Social-Security, pre-RMD, no wages). Below the 24% bracket cliff at $214K MFJ.
2. You expect higher future tax rates. Either personally (RMDs + Social Security pushing you into a higher bracket later) or politically (federal rates rising in the future).
3. You have time before RMDs. A 60-year-old has 13 years before RMDs start at 73. A 72-year-old has one. The longer the horizon, the more tax-free Roth growth compounds.
4. The conversion stays under an IRMAA threshold. Crossing an IRMAA bracket adds Medicare-premium surcharges that can equal 1-2% of the conversion amount.
5. You can pay the conversion tax from outside the IRA. Paying the tax FROM the converted amount erodes the benefit. Paying it from a taxable brokerage account preserves the tax-free growth runway.

When it doesn't pay

The math doesn't favor conversions when:

1. You're in a higher current bracket than you'll ever be in retirement. A still-working 50-year-old in the 32% bracket converting to a Roth they'll draw from at the 22% bracket is paying extra tax for nothing.
2. You'll spend down the Traditional IRA fast. If you'll deplete the IRA in 5-10 years anyway, the Roth-tax-free-growth compounding doesn't have time to matter.
3. You're charitably inclined. A Qualified Charitable Distribution (QCD) lets you donate up to $108,000/year (2026 limit) directly from an IRA to a charity — tax-free, satisfies your RMD. If you'll use QCDs for charitable giving, those IRA dollars never get taxed. Converting them to Roth pre-pays tax you didn't have to pay.
4. You expect to leave the money to charity at death. Charity inherits Traditional IRA tax-free; converting first just pays tax for no benefit.

A worked example

A 62-year-old couple retires with $1.4M in Traditional IRAs and $300K in taxable brokerage. They expect:

• $0 wages
• $0 Social Security until 67 ($60K/year combined when claimed)
• Monthly spending of $7,000 in retirement
• Standard deduction = $31,500/year

Without conversion ladder:

• Years 62-66: Withdraw $84K/year from Traditional IRA. Taxable income ≈ $52K. Federal tax ~$5,000/year.
• Year 67: Social Security starts ($60K). Withdraw $60K from Traditional. Taxable income (incl. up to 85% of SS taxable) ~$95K. Federal tax ~$11,000.
• Year 73: RMDs kick in. Traditional IRA still $1.0M+. RMD ~$38K. Plus ongoing withdrawals. Pushed into 22% bracket. Federal tax $20K-$24K/year.
• Lifetime federal tax: roughly $420,000 over 30 years.

With Roth conversion ladder (62-66):

• Years 62-66: Withdraw $40K from Traditional + convert $60K Roth. Taxable income ≈ $68K. Federal tax ~$7,500/year. Bonus: pay tax with taxable-brokerage cash so Roth balance is preserved.
• Year 67: SS starts. Withdraw $60K from Traditional. Taxable income ~$95K. Same as before.
• Year 73: RMD now ~$28K (smaller Traditional balance). Plus ongoing withdrawals. Federal tax $14K-$18K/year (more comes from Roth tax-free).
• Lifetime federal tax: roughly $320,000 over 30 years.

Net savings: ~$100,000 in lifetime federal tax, plus avoided IRMAA premium creep in the later years. Yearfold's Taxes tab reports a similar calculation against your actual numbers.

The IRMAA trap

The biggest mistake in DIY Roth conversions is unintentionally crossing an IRMAA bracket. A $5,000 over-conversion that pushes you from $211K MAGI to $217K MAGI doesn't just cost you $1,200 in extra federal tax — it triggers $87.70/month × 12 months × 2 spouses = $2,105/year in additional Medicare premiums for the year you cross AND for the year your tax return is filed (IRMAA is based on MAGI from two years prior).

See the Medicare/IRMAA pillar for the full bracket table and planning approach.

When to actually do this

The honest decision tree:

1. Are you in your 60s, retired, with significant Traditional IRA balances and no wages? → Conversion ladder probably pays. Run the numbers.
2. Are you in your 50s, still working, in the 24%+ bracket? → Wait until you retire. Conversions now cost more than they save.
3. Are you in your 70s, RMDs already started? → It's too late for the textbook ladder. Smaller incremental conversions can still help reduce future RMDs and survivor-tax burden, but the impact is smaller.
4. Are you charitably inclined? → Use QCDs first; convert the remainder.

How Yearfold helps

The Taxes tab in the calculator includes a Roth-conversion-ladder recommender that:

• Forecasts your year-by-year AGI and IRMAA exposure
• Identifies the headroom under each year's IRMAA threshold
• Suggests an annual conversion amount that fills that headroom without crossing the bracket
• Estimates lifetime tax savings vs. doing nothing

It's a starting point, not a prescription. Run your specific numbers, then talk to a fee-only CFP or tax professional before executing — Roth conversions are irreversible (the recharacterization rules went away in 2018) so the decision matters.

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Related reading:

• Medicare and IRMAA: the retirement cost most calculators miss
• How much do I really need to retire?
• What is the 4% rule, and is it still right in 2026?