Roth conversions get talked about like they’re the holy grail of tax planning. Move the money now, pay the tax at today’s rate, and enjoy tax-free growth for the rest of your life.
But a conversion done at the wrong moment can trigger an unexpected penalty, push you into a higher tax bracket than you’d have paid in retirement, or bump up your Medicare premiums down the line.
And once the money has moved, you can’t undo it. So before you fill out the paperwork, here are 5 times a Roth conversion is the wrong call.
1. You’re Under 59½ and Planning to Spend the Money Soon
You’ve heard about the Roth’s famous five-year rule, and you’ve had a Roth IRA open for a decade, so you assume you’re fine. You’re not, because there’s more than one five-year rule, and the one that applies to conversions is separate from the one that applies to contributions.
If you convert pre-tax money from a traditional IRA and then pull that converted money out before 5 years have passed, while you’re still under 59½, the IRS hits you with the 10% early withdrawal penalty on the converted amount.
Not just the earnings, the whole converted sum.
One workaround is to stagger conversions early enough that each one has cleared its own 5-year window before you touch it.
2. You’d Have to Use Withheld Money to Pay the Tax
When you convert, you owe federal (and often state) income tax on the amount moved. The obvious-looking option is to have the custodian withhold the tax straight out of the conversion, the way you would with a normal IRA withdrawal.
However, the money withheld for taxes never actually gets converted. It’s treated as a regular withdrawal sent to the IRS.
If you’re under 59½, that withheld portion carries the 10% early withdrawal penalty under Internal Revenue Code section 72(t), on top of the income tax you already owe. And even if you’re over 59½ and dodge the penalty, you’ve still shrunk the amount that made it into the Roth.
On a $100,000 conversion with 22% withholding, only $78,000 lands in the Roth. That missing $22,000 isn’t just $22,000. Left to grow tax-free at 7% for 20 years, it’s roughly $85,000 you no longer have.
The rule of thumb from every planner who deals with this: pay the conversion tax from outside money, a checking or brokerage account, so the full conversion amount actually gets into the Roth and starts compounding.
3. The Conversion Will Push You Into a Much Higher Bracket
A Roth conversion adds the converted amount to your ordinary income for the year. If that pushes you from the 22% bracket into the 24% or 32% bracket, you’re paying tax today at a rate you may never have paid in retirement.
The whole point of converting is to pay tax at a rate lower than the one you’d otherwise face later. Do it backward, and you’ve prepaid a bigger bill than the IRS would ever send you.
For 2026, the 22% bracket runs up to $50,400 for single filers and $100,800 for married couples filing jointly.
The 24% bracket starts above those figures and reaches $105,700 and $211,400, respectively.
The top 37% bracket kicks in at $640,600 single and $768,700 joint. If you’re sitting comfortably inside the 22% bracket, a conversion would drag you three-quarters of the way through the 24%.
The fix is to convert in slices rather than all at once. Fill up your current bracket, stop, and do another slice next year.
This is the whole reason the years between retirement and the start of RMDs get called the conversion window: your earned income has dropped, your taxable income is temporarily low, and you can convert in small enough chunks to stay in a lower bracket than you’d face once RMDs and Social Security are both running.
4. You’re on Medicare, or Will Be Within Two Years
Medicare premiums are means-tested through a surcharge called IRMAA, so a conversion can push up what you pay for Part B and Part D down the road.
For 2026, IRMAA kicks in once modified adjusted gross income exceeds $109,000 for a single filer or $218,000 for a married couple filing jointly. The scale runs through 5 brackets and tops out at $500,000 for individuals and $ 750,000 for joint filers.
At the highest bracket, the total monthly Part B premium reaches $689.90, and the Part D surcharge adds up to $91.00 a month. Kick yourself over one dollar of MAGI at the wrong threshold, and the extra cost is at least $1,148.40 for the year, split roughly $974.40 for Part B and $174 for Part D.
A conversion large enough to breach an IRMAA threshold can wipe out a chunk of the tax savings you were converting to get. That’s a reason to size conversions carefully.
Run the numbers before you convert, stay under the next threshold if you can, and if you do get hit with a notice for a conversion tied to a one-off event, you have 60 days to file a reconsideration request with the Social Security Administration.
5. You Expect to Be in a Lower Bracket in Retirement
The whole logic of a Roth conversion rests on one assumption: your tax rate later will be at least as high as your tax rate now. If it’s going to be lower, converting is a straightforward loss.
You’ve paid tax at 24% today on money that would have come out at 12% or 22% in retirement, and no amount of tax-free growth makes up for handing over the difference upfront.
People whose income drops sharply at retirement because a big salary goes away and isn’t replaced by an equivalent pension. People who don’t have huge traditional IRA balances waiting to force big RMDs. People who plan to spend most of their retirement in a state with no income tax after working in one with a high rate.
One complication: the One Big Beautiful Bill Act, passed in July 2025, made most individual tax provisions from the TCJA permanent, so the sunset scheduled for the end of 2025 is off the table.
If it isn’t, don’t take the bet. If you’re not sure, talk to a tax professional who can run the numbers for your actual situation before you move a dollar.
## Sources
irs.gov. https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill
247wallst.com. https://247wallst.com/personal-finance/2026/09/20/she-converted-80000-at-58-and-had-20-withheld-to-cover-the-tax-the-16000-never-reached-the-roth-so-the-irs-called-it-a-withdrawal-and-added-a-10-penalty/
covenantwealthadvisors.com. https://www.covenantwealthadvisors.com/post/how-to-pay-taxes-on-roth-ira-conversions
schwab.com. https://www.schwab.com/learn/story/what-to-know-about-five-year-rule-roths
taxfoundation.org. https://taxfoundation.org/data/all/federal/2026-tax-brackets/ (
humana.com. https://www.humana.com/medicare/medicare-resources/irmaa
Roth Conversion Confusion. https://irahelp.com/roth-conversion-confusion-taxes-withheld-when-under-59-%c2%bd/
Disclaimer: The content in this article is for informational purposes only and is not intended as financial, investment, or tax advice. Always consult a qualified financial advisor or tax professional before making decisions about your money, investments, or retirement planning.
Kylie Lang is a nationally syndicated travel journalist with bylines on the Associated Press Wire & more, a lifestyle writer, and the founder and editor of Your Lifestyle Library (yourlifestylelibrary.com). She holds a BA (Honours) in History from the University of Kent and is a member of the British Guild of Travel Writers.