Is a Roth Conversion in 2026 Still Worth It After OBBBA?
The One Big Beautiful Bill Act made TCJA rates permanent and erased the “convert before 2026” urgency. The conversion math didn’t die. It just got more selective about who it rewards.
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For the better part of three years, the pitch was simple. Tax rates were set to jump on January 1, 2026, when the Tax Cuts and Jobs Act sunset. Advisors told clients to convert traditional IRA dollars to Roth now, while rates were still low. Thousands of retirees started multi-year conversion ladders on that exact premise.
Then the One Big Beautiful Bill Act was signed on July 4, 2025, and made those rates permanent. The 2026 cliff vanished. Suddenly the most common Roth conversion 2026 question stopped being “how much should I convert?” and started being “should I cancel the whole thing?”
The short answer: no, Roth conversions aren’t dead. But the reason to do one has changed, and a lot of people who were told to convert in 2024 and 2025 are now overpaying for a strategy that was sold under the old rules.
Roth conversions still make sense in 2026 for retirees aged 60 to 72 with sizable pre-tax balances, but the rationale shifted. With TCJA rates permanent, the case now rests on three things: your own marginal rate jumping when RMDs hit at age 73 or 75, the temporary OBBBA senior deduction available through 2028, and avoiding IRMAA Medicare cliffs that recur every year.
Why the “convert before rates go up” argument is over
The original sales pitch was a bet against Congress. If TCJA sunset as scheduled, the 22% bracket would have reverted to 25%, the 24% bracket to 28%, and the top rate to 39.6%. Converting at 24% in 2025 to avoid 28% in 2026 was a clean four-point arbitrage.
That arbitrage no longer exists. OBBBA made the seven-bracket TCJA structure permanent. The 2026 brackets for married filing jointly run 22% up to $211,400 of taxable income, 24% up to $403,550, and 32% up to $512,450. These rates are now indexed for inflation and scheduled to stay put indefinitely.
“Permanent” in tax law means “until the next bill.” Congress can change rates whenever it wants. But the inflection point everyone was planning around is gone. If you were converting purely to beat 2026, the deadline you were racing against doesn’t exist anymore.
The case for Roth conversions used to be about the calendar. Now it’s about your personal tax curve. Those are very different planning problems.
The three reasons Roth conversion 2026 math still works
Stripping away the rate-hike scare, three real drivers remain. Each is enough on its own to justify converting for the right person. None of them existed in their current form before OBBBA.
1. Your future tax rate, not the federal rate
Federal rates are stable. Yours probably isn’t. Required minimum distributions kick in at age 73 for those born between 1951 and 1959, and at age 75 for those born in 1960 or later. When RMDs start, a $1.5 million traditional IRA forces out roughly $56,000 in the first year. Stack that on Social Security and a pension and many retirees move from the 12% bracket straight into the 22% or 24% bracket and stay there permanently.
The point of conversion isn’t to beat a future federal rate hike. It’s to flatten your own lifetime rate curve by moving dollars out of the high-RMD years and into low-income years between retirement and 73.
2. The OBBBA senior deduction (2025 through 2028)
OBBBA created a temporary $6,000 deduction per person aged 65 or older, available on top of the standard deduction and on top of itemizing. For a married couple where both spouses are 65+, that’s $12,000. The deduction phases out between $75,000 and $175,000 of modified adjusted gross income for single filers and $150,000 to $250,000 for joint filers, and it disappears entirely after 2028.
This creates a real four-year window. A 66-year-old couple with $130,000 of other income can convert roughly $12,000 to a Roth and pay close to nothing in additional federal tax on the conversion itself, because the senior deduction absorbs the income. That’s not a windfall, but it adds up. Four years of it on a couple already in the 22% bracket is around $10,560 in tax savings that disappears in 2029.
3. IRMAA cliffs matter more in 2026 than ever
The income-related monthly adjustment amount, or IRMAA, is the Medicare surcharge tacked onto Part B and Part D premiums for higher-income enrollees. The 2026 IRMAA structure kicks in at $109,000 of MAGI for single filers and $218,000 for joint filers. The base Part B premium is $202.90 per month, and the surcharges range from an extra $81.20 to $487.00 per person, per month.
IRMAA is a cliff, not a phase-in. One dollar of MAGI over a threshold triggers the full surcharge for both spouses for the entire year. And it uses a two-year lookback: your 2026 IRMAA is based on your 2024 tax return. A Roth conversion executed in 2026 affects your Medicare premiums in 2028.
The 2026 IRMAA brackets every retiree converting should know
If you’re on Medicare or within two years of enrolling, these thresholds are the most important numbers in your conversion plan. Crossing one by accident can cost a couple over $5,000 in a single year.
| 2026 MAGI (Joint) | 2026 MAGI (Single) | Part B Premium / Month | Annual Cost (Couple) |
|---|---|---|---|
| Up to $218,000 | Up to $109,000 | $202.90 | $4,870 |
| $218,001 – $274,000 | $109,001 – $137,000 | $284.10 | $6,818 |
| $274,001 – $342,000 | $137,001 – $171,000 | $405.90 | $9,742 |
| $342,001 – $410,000 | $171,001 – $205,000 | $527.80 | $12,667 |
| $410,001 – $750,000 | $205,001 – $500,000 | $649.60 | $15,590 |
| Over $750,000 | Over $500,000 | $689.90 | $16,558 |
Read that table carefully. A joint filer with MAGI of $217,999 pays $4,870 a year in base premiums. At $218,001, that same couple pays $6,818. Two dollars of conversion overage costs $1,948 a year, recurring as long as income stays above the line.
Tax-exempt municipal bond interest is added back to AGI to calculate IRMAA MAGI. Retirees who hold a meaningful muni portfolio routinely miscalculate their conversion ceiling and end up over the threshold. Pull your last 1040, line 11, then add back line 2a before sizing any 2026 conversion.
When converting in 2026 still makes sense
The clearest case is the retiree who is between age 60 and 72, has more than $1 million in pre-tax accounts, and is currently in the 12% or low 22% bracket with several low-income years ahead before RMDs and Social Security stack up. That person is almost certainly converting at a lower marginal rate than they’ll pay starting at 73.
Run through this checklist before you decide. If you can answer yes to most of these, conversion math probably still works for you in 2026.
- Is your traditional IRA or 401(k) balance over $1 million?
- Are you currently in the 12% or 22% federal bracket?
- Have you projected your RMD at age 73 or 75 and modeled what bracket it pushes you into?
- Will you be on Medicare in the next two years, and do you know your current IRMAA cushion?
- Is at least one spouse 65 or older, qualifying for the senior deduction through 2028?
- Do you have non-IRA cash available to pay the conversion tax, so the full converted amount stays in the Roth?
- Are you converting at a marginal rate at least 3 points lower than your projected RMD-era rate?
When converting in 2026 is the wrong move
The retiree who should pause is the one who started a ladder in 2023 on the assumption that 2026 rates would jump and now has no other reason driving the strategy. Continuing to convert at 24% to avoid a 28% rate that no longer applies is paying full price for a discount that expired.
A handful of patterns reliably indicate that the conversion is doing more harm than good.
The four-year sweet spot: 2025 through 2028
This is the part most articles miss. The senior deduction expires after 2028. The SALT cap reverts after 2029. The combination of a permanent low-rate federal structure and these temporary deductions creates a planning window that genuinely closes.
For a couple both 65+ in the 22% bracket, the senior deduction effectively converts roughly $12,000 per year at a 0% marginal cost. Over four years, that’s $48,000 of Roth space added with minimal tax friction. None of those dollars will ever face an RMD. None will ever be taxed again.
The math doesn’t say convert your whole IRA. It says use the window deliberately, then ratchet down after 2028 when the senior deduction disappears and the SALT cap drops back to $10,000 in 2030.
The 2025-to-2028 senior deduction isn’t a reason to convert if you weren’t already a candidate. But for retirees who already had a case for conversion, it’s a four-year discount the next generation won’t get.
What to ask before changing your conversion plan
If you’re mid-ladder or your advisor recommended a conversion under the old framework, these are the questions worth raising before the next conversion date.
- What was the original reason for the conversion plan, and is that reason still valid under OBBBA?
- What’s my projected marginal rate at age 73 or 75 when RMDs begin, and what assumptions drive that number?
- How close am I to the next IRMAA threshold this year, and how does the conversion affect Medicare premiums in two years?
- Are we capturing the senior deduction before it expires in 2028?
- If I stop converting now, what does my RMD picture look like at 73 versus continuing for three more years?
Who Should Still Convert in 2026
- Retirees 60 to 72 with $1M+ in traditional IRA or 401(k) balances
- Couples both 65+ with MAGI under $250,000 who can use the senior deduction
- Pre-retirees with a clear low-income window between retirement and RMD age
- High-RMD savers whose projected age-73 marginal rate is 3+ points above today’s
- Anyone planning to leave traditional IRA assets to non-spouse heirs subject to the 10-year drawdown rule
Who Should Hold Off or Reduce
- Mid-ladder converters whose only rationale was the 2026 TCJA sunset
- Anyone within $5,000 of an IRMAA cliff who hasn’t modeled the two-year Medicare cost
- Retirees over 70 in poor health with a surviving spouse as the primary heir
- Pass-through business owners near the $500,000 SALT phase-out
- Anyone who must pay the conversion tax from the IRA itself
- Retirees planning to relocate to a no-income-tax state within five years
The bottom line on Roth conversion 2026
OBBBA didn’t kill Roth conversions. It killed one specific reason to do them. The “rates are going up” pitch is gone, and any advisor still using it as the lead argument is selling a 2024 strategy in a 2026 world.
What’s left is more durable. Your own marginal rate will still climb when RMDs hit. The senior deduction is real money for the next four years. IRMAA cliffs penalize sloppy conversion sizing more than ever. These three drivers don’t apply to everyone, and that’s the point. Roth conversions in 2026 are a sharper, more targeted tool than they were when the calendar was doing the work.
If you started a conversion ladder under the old framework, this is the year to recheck the math. Not cancel it automatically. Not continue on autopilot. Run the numbers against the new rules and decide based on what’s actually true today.
This content is for informational purposes only and does not constitute financial, tax, or legal advice. Consult a qualified fiduciary advisor before making significant financial decisions.
