Partial Roth Conversions

Partial Roth Conversions – Can You Do a Partial Roth Conversion?

Partial Roth Conversions – Partial IRA Conversion to a Roth

Partial Roth Conversions are an important and powerful tool to control future taxes and optimize your legacy.

They are done by rolling over pre-tax funds from a retirement account into Roth accounts, thus paying taxes at your marginal rate the year of conversion. Partial Roth conversions optimize tax diversification in order to control future income, taxes, and surcharges.

Partial Roth conversions are more important than ever since the SECURE Act passed and stretch IRAs cannot be left as a legacy. Now, you must consider the taxation of your pre-tax account not only over your lifetime, but your heirs’ lifetime as well!

Can you do partial Roth conversions? Why pay tax now instead of later? There are many reasons, but the most important is control of future tax liabilities. Pre-tax accounts continue to grow over time for both you and your silent partner, the government. These accounts are deferred income, and taxes are owed on both the contribution and the growth in the account.

At age 72, you are forced to start taking distributions from pre-tax retirement accounts, called Required Minimum Distributions (RMDs). These RMDs, as we shall see, can become quite large; this leads to a legacy of ordinary income taxes for either you or your heirs.

Let’s look at a retirement tax plan that includes partial Roth conversions then run through a list of frequently asked questions to answer the question can you do partial Roth conversions.


Partial IRA Conversion to a Roth

Generally, you don’t want to convert all of your pre-tax money into Roth in the same year. If you do so, you will owe a lot of taxes!

The goal is to convert part of the pre-tax money over a number of years, thus partial Roth conversions. This leads lower taxes over your lifetime. Often, it is most efficient to “fill-up” the tax bracket you are in.

So, for instance, if you are in the 24% tax bracket, find the top of the bracket and convert tp fill up your taxable income to that mark. If you go slightly over, it is not a huge deal. This is because you are only taxed at the higher bracket for just the amount you go over. Remember, marginal taxes are different than effective taxes! The goal of partial conversion to a Roth IRA is tax bracket arbitrage over the rest of your life.

Generally, you need to have a 20-30 year tax projection in hand to know your yearly goal conversion amount.

For instance, if RMDs start you in the 28% tax bracket when you turn 72, it may be a good idea to fill-up your 24% bracket now. This is tax bracket arbitrage, where you pay taxes now at a lower rate than you will in the future.

The tax brackets are set up with “low brackets” (the 10 and 12%), “middle brackets” (the 22 and 24%), and high brackets. It is generally less efficient to “jump” between the low to middle or the middle to the high brackets, but it, again, depends on your future tax projection.

Let’s look at an example of Partial Roth conversions.

An Example of Partial Conversions to a Roth IRA

When are partial Roth conversions are indicated to lower overall taxes during your remaining lifetime?

Can You Do Partial Roth Conversions?

Figure 1 (Estimated Effective Tax Rate with a $2M IRA and a large brokerage account)

Let’s start with the estimated effective tax rate with a $2M IRA. In figure 1 you can see a couple retires at age 60. They pay both state (light blue) and federal (purple) taxes from their investment income (in a brokerage account). As they spend down the brokerage account, the taxes due decrease until the Tax Cut and Jobs Act expires at the end of 2025 when they are 66. At that point, there is an increase in the federal taxes.

Then, at age 72, Required Minimum Distributions start and this couple pays more in taxes. RMDs steadily increase over time yet are lower than the initial assumed growth of their IRA, so the amount they owe in taxes increases.

If we can try to smooth out the tax rate over time at a lower effective tax rate overall, maybe we can save in taxes! Enter partial Conversion to a Roth IRA where you pay taxes now in order to pay less in the future!

How do you Choose which Bracket to Fill with Conversions? 

Which tax bracket should you fill with partial IRA conversion to a Roth?

partial IRA conversion to a Roth

Figure 2 (Tax brackets and partial Roth conversions)

In figure 2, you can see the tax brackets overlying the taxable income both with and without partial Roth conversions. This is a slightly complicated figure but the most important concept to understand.

In green, note the future expected taxable income starts out in the 10% tax bracket and increases at age 66 when TCJA expires. It then jumps into the 22/25% tax bracket when Required Minimum Distributions start at age 72 and increases over time up into the 24/28% tax bracket.

With partial Roth conversions, in blue, we fill up the 12% tax bracket up until RMDs start at age 72. This depletes the IRA enough that it stays out of the 24/28% tax bracket for the projected future!

This smoothing effect is what allows us to save in taxes with partial Roth conversions!

Note that it doesn’t make sense to convert the whole IRA to Roth now. Don’t pay taxes at a higher rate now than you will in the future! There are, of course, some exceptions to this rule—such as those worried about the Tax Torpedo and perhaps those with very large pension or other incomes.

So, how much should you convert every year?

Yearly Amount of Partial Roth Conversion

The point of a partial Roth conversion is to take advantages of low income and thus low tax brackets over multiple years. If you convert to much in a single year, the bulk of the conversion is exposed to higher tax rates. If you do partial conversions, just enough to fill up your goal tax bracket, you pay less in taxes over time.

So, how much should you convert from IRA to Roth?

partial roth conversions

Figure 3 (Goal conversion amount every year)

Figure 3 demonstrates the proposed amount of partial Roth conversions by year. The actual amount converted is a yearly decision, but we can see the skeleton plan above.

You need a 30-year tax plan to understand the goal bracket to fill up. Of course, future taxes will change but we can only plan for what we know now. Note in Figure 3 where planned conversion amounts decreases significantly in 2026 after the TCJA expires.

Once you have your goal bracket to fill, examine your other sources of income and decide how much to convert.


There are no more recharacterizations of Roth IRA conversions (you can’t undo them), so you must be careful not to go over by too much.

What if you do convert too much now that you no longer can recharacterize (or undo) the conversion? Then you will owe ordinary income taxes on the amount you over converted in the highest marginal tax bracket. Say you converted $10,000 too much into the 22% tax bracket. Then, you will owe and additional $2200 in taxes the year of conversion. This is not a huge deal, but don’t overshoot by way too much.


Taxes and Partial Roth Conversions

The point of partial Roth conversions is to pay the least in taxes over your lifetime. The less you pay in taxes, the more you have to spend or to give away.

taxes and partial Roth conversions

Figure 5 (Yearly amount of taxes paid with and without partial Roth conversions)

In Figure 5, see the amount of taxes paid yearly with and without partial Roth conversions.

In dark blue, without conversions, you pay more in taxes once Required Minimum Distributions start, and owe more than $268k of additional taxes over your lifetime!

With partial Roth conversions, in green, you smooth out the taxes paid during your lifetime and save in taxes. Now that is some good tax planning!


How to Pay Taxes on Partial Roth Conversions

One additional important consideration: you must have enough funds in your brokerage account to pay the taxes on your partial Roth conversions.

This is important for several reasons. First, if you pay the taxes out of your pre-tax account, then you will need to pull additional money and pay taxes on the money you are using to pay taxes! Bad idea.

Second, by depleting your brokerage account to do partial Roth conversions, you are actually saving in taxes in the future! You are using taxable accounts to convert money into a tax-free account. This is important to know: you decrease your overall tax liability by using your brokerage account to put money into tax-free status. Thus, it can actually make some sense to pay more taxes now than you might in the future and convert at a higher bracket now than you will be in in the future. This saves you on current and future taxes due to depletion of the taxable brokerage account.

In fact, even if you need to pay capital gains you should consider partial Roth conversions. Paying the lower capital gains tax rates now may reduce your ordinary income later. That is usually a good trade-off!

Summary of Partial Roth Conversions in Retirement

That was a good (long) discussion about can you do partial Roth conversions.

Let’s move on to frequently asked questions.

Frequently Asked Questions about Partial Roth Conversions

Can I do a partial Roth conversions?

Yes, you can anytime you want to pay the extra taxes, but it is most beneficial to do them when your income is the lowest. During your Tax Planning Window, after you have retired but before you have taken social security (at 70) and begun Required Minimum Distributions (at 72), you usually have the lowest income and thus can access your lowest tax brackets.

How much to convert?

Partial Roth conversions can be done through your standard deduction, and your 10 and 12% tax brackets. These conversions are usually no-brainers. If you have large pre-tax accounts, often times you want to do conversions up to your 22% tax bracket. Conversions above this amount (up to the 24% tax bracket or higher!) can make sense for some folks.

Can I do partial Roth conversions with all types of pre-tax accounts?

Yes, for the most part.

You cannot do partial Roth conversions from non-governmental 457b plans as these have distinct distribution requirements that require you to take the tax-deferred income as W-2 income.

Partial Roth IRA conversions from TSPs are problematic as well. Roll TSPs into IRAs before conversions.

For all other pre-tax accounts, it is easiest to roll over (via direct trustee-to-trustee transfer) your pre-tax money into a traditional (pre-tax) IRA and then do Roth conversions from there. Often, for most custodians, you can click a few buttons and immediately do partial Roth IRA conversions.

Is it worth it?

Yes! You save in taxes! You need a 30-year tax projection to be sure.

Online Partial Roth Conversions Calculators

Partial Roth conversions Calculators are available on-line. Roth conversions are a year by year decision depending on your other sources of income, so while it is important to have a 30 year tax projection, decisions are usually made in November or December of the conversion year.

Partial Roth Conversions and:

Roth Contributions

You can do unlimited Roth conversions regardless of income. With Roth contributions you are limited by AGI. You can contribute $6k (or $7k if older than 50) to a Roth IRA if you have earned income and your AGI is below the phaseout. There are No INCOME LIMITATIONS for doing Roth conversions.

Calendar Year

You must do Roth conversions in the calendar year. This is a challenge as often times you don’t know your true income until after the year is over. That is, you may have to guess at what your marginal tax bracket is after a partial accounting of all your income. Thus, you must do partial Roth conversions by December 31st and you pay taxes in that tax year.

After age 72

You can continue after the age of 70 when it makes sense according to the financial plan. Often times, you will remain in lower tax brackets despite having to take Required Minimum Distributions and other forms of income than your heirs will be in if they have to recognize the pre-tax IRA as income.

Before Age 59 ½

There is no penalty for early withdrawal for partial IRA conversion to a Roth. It is technically a roll over rather than a withdrawal hence no 10% penalty. Note that if you pull money out to pay taxes on your Roth conversion before the age of 59 1/2 than there is a 10% penalty.

State Income Taxes

State income taxes are also due on Roth conversions. If you plan on moving to a lower or no income tax state, it may be wise to hold off or otherwise adjust your strategy.


Recharacterization of conversions are no longer allowed. Roth contributions may still be recharacterized.

Pro Rata Rule

If you have basis in your IRA, you will need to have IRS form 8606 available and do conversions on a pro-rata basis. Specifically, if you have non-deducted IRA money, that means you have already paid taxes on part of your IRA (which is basis) and you don’t want to pay taxes again. Consider the Cream in the Coffee Maneuver to liberate your tax-free money from your IRA.

5-year rule

There are several 5-year rules. In this context, money you convert from a traditional IRA to a Roth IRA cannot be accessed for 5 years without paying the 10% penalty. This is so folks under 59 ½ cannot simply avoid the 10% early withdrawal penalty by converting the funds into a Roth and then taking out the money. There is also a 5-year rule on the initial set up of any Roth account which has to do with taxation of the earnings.

Inherited IRAs

Conversions are not allowed on Inherited IRAs.

60 day Roll-Over

Only if you are doing 60-day roll overs do you need to be careful, as you are only allowed to do one every 365 days.


This recent Act did not address partial Roth conversions, however, the loss of the Stretch IRA may increase the importance of conversions as a legacy and/or estate play. Non-spousal Inherited Roth IRA may no longer be stretched, and have to be distrusted by the end of 10 years.

The Backdoor Roth

The Backdoor Roth is a two-step process to avoid the Roth contribution AGI limits. The first step is a non-deductible traditional IRA contribution, and the second step is conversion of the IRA into a Roth. The backdoor Roth is different from partial Roth conversions but has no implications on such, as long as the Pro-Rata rules for the backdoor are observed.

The Mega Backdoor Roth

Mega Backdoor Roth involves after-tax contributions to a 401k. If your plan allows after- tax contributions, you can put up to $57k total into your 401k (which includes employer contribution (match and/or profit sharing), employee contribution, and after-tax funds). Next, if the plan allows it, this money can either be directly converted (in-plan) into the Roth 401k portion, or rolled over (trustee-to-trustee transfer) of an in-service distribution to a Roth IRA. These are not considered partial Roth conversions, but rather an in-plan 401k conversion or an after-tax to Roth IRA Roll-over, respectively.

Estate Planning

Roth IRAs are ideal to leave to heirs. Since Roth IRAs may no longer be stretched, they need to be distributed to non-spousal heirs by December 31st on the 10th year after death of the IRA owner. The distributions are tax-free and there are no RMDs on Roth IRAs or inherited Roth IRAs. There are RMDs on Roth 401k balances, however, so those need to be transferred to Roth IRAs to avoid RMDs.


Roth conversions are included as income for the MAGI calculation for both ACA premium tax credits and IRMAA.

Capital Gains

You might pay increased taxes on your capital gains as a result of PaRCs. Remember, that Capital Gains Stack Upon Ordinary Income and conversions are considered ordinary income.


PaRCs may cause your passive income to be subject to NIIT as well.

Social Security

Considered part of combined income for social security taxation purposes.

Medicare Tax (IRMAA)

Yes, you pay IRMAA if you convert too much, and this is not subject to appeal.

Partial Roth Conversions and 401k Plans

Traditional 401k plans are pre-tax and can be converted into Roth IRAs. It is usually easiest to roll over your 401k plan into an IRA before converting.

403b plans can be rolled over into IRAs to then be converted to Roth IRAs.

Roth Conversion Pitfalls and Mistakes

10% Penalty Trap

This describes an trap when you make two mistakes while being under 59 ½. First, you use your pre-tax money to pay the taxes on the conversions, and second, there is now a 10% penalty on the money used to pay taxes. Of course you can do partial IRA to Roth conversions prior to 59 ½, just make sure you use brokerage account funds to pay the taxes and void the 10% Penalty Trap.

Can’t Convert RMDs

If you are over 72 and need to take RMDs, the first money out of your IRAs must be RMDs. RMDs cannot be converted into Roth; that is a contribution rather than a conversion. Make sure you fully remove RMDs before doing conversions.

IRA Aggregation Rules

You can take your RMDs out of one or all of your many IRAs as long as you take out a sufficient amount. IRAs are treated as if you only have one (they are aggregated), whereas 401k plan must each have a separate RMD. The Aggregation rules can trip you up if you take a small amount from one IRA and then try to do a conversion from another IRA before you take your entire RMD.

Need the IRA for Income

Finally, chances are if you need the IRA for income, you probably shouldn’t do partial Roth conversions. This is due to the fact you likely don’t have sufficient funds outside your tax protected accounts to both live off of and pay the taxes on the conversions.

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  1. You have to plan to Roth convert over a couple decades. I started saving for Roth conversion at age 50 for a retirement age of 65. I DCA’d into a brokerage, did tax loss harvesting (TLH) along the way, and converted the brokerage to cash so my only tax bill was due to Roth conversions. Over 50% of the cash was generated from 15 years of compounding, and I had generated enough TLH along the way, so I could convert from brokerage stocks to cash tax free. If you spend all your time “maxin out your pretax” because you read it on some bogglehead blog, when it comes tine to Roth convert you’re pretty much hosed.

    The advantage of Roth conversion post retirement is amazing. It’s the gift that keeps on giving. Nothing beats compounding and paying no taxes, and nothing these days beats a Roth for transfer of wealth while maintaining control of your money.

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