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.

2026 update: Tax law changed in mid-2025. The brackets used below are the post–One Big Beautiful Bill Act figures — see how 2026 brackets actually look and why the "tax cliff" most articles still warn about didn't happen.

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:

(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 a couple from $217K MAGI to $222K MAGI doesn't just cost the extra federal tax — it triggers $95.70/month × 12 months × 2 spouses = $2,297/year in additional Medicare premiums two years later (IRMAA uses MAGI from the tax return two years prior). The single-filer first cliff sits at $109,001 MAGI per the CMS-final 2026 brackets; the joint first cliff at $218,001.

For the full six-tier 2026 bracket table, the worked marginal-rate arithmetic for each cliff, the two-year-lookback mechanic, and the list of strategies many retirees use to stay under each tier, see the deep dive: The IRMAA cliff. For the broader context on what Medicare actually costs in 2026 (base premiums, Medigap, Medicare Advantage), see Medicare and IRMAA: the retirement cost most calculators miss.

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?