The Roth Conversion Break-Even Question Is the Wrong One.

Most people sizing up a Roth conversion want one number: the break-even year, the point where the tax-free growth finally overtakes the tax they paid upfront. Here's the thing. That number is close to useless. If you pay the conversion tax from outside money and your tax rate is the same now as it will be later, a Roth conversion breaks even the day you make it. The decision that actually matters runs on four levers: your time horizon, the gap between today's tax rate and tomorrow's, the shadow costs a conversion sets off, and who the money is ultimately for.

The video below walks through those four levers. The sections after it put each one in order, update every figure for 2026, and show you what you actually have in hand once you've worked through each step.

Watch: Patrick Shope on why break-even math misses what really drives a Roth conversion.

Why the Roth conversion break-even year is the wrong question

Let me show you why the break-even math falls apart. Say you convert $100,000 and you're in the 24% bracket, so the tax is about $24,000. If you pay that $24,000 from a savings account, the full $100,000 lands in the Roth and grows tax-free from there. In a traditional IRA that same $100,000 also grows, but you owe tax when you pull it out.

Run the two side by side and something clicks: if your tax rate is identical at both ends, the after-tax result is the same whether you convert or not. The advantage doesn't come from a break-even date arriving. It comes from paying the tax with outside cash (which quietly shelters more money) and from paying at a lower rate than you'd otherwise face later. A break-even chart hides both of those. I've never once seen a break-even year change what a family actually should do. The four levers do all the real work.

What you have after this step: a decision framed around lifetime tax, not a single tidy year on a spreadsheet.

Lever 1: How long the money gets to compound tax-free

This is more than "how long do I expect to live." It's how long you and your spouse together have for that tax-free money to grow. The longer the runway, the more the tax-free compounding outruns the head start you handed the government by paying tax early.

We can't know anyone's lifespan, so planning for longevity is usually the sensible move. If you're healthy at 63 and your parents lived into their 90s, that's a long runway, and it weighs in favor of converting. If your realistic horizon is short and there's no one you're trying to pass money to, the case gets thinner in a hurry. This is one of the first things we talk through in the four questions we ask before any conversion.

What you have after this step: an honest read on how many years the Roth actually gets to work for your household.

Lever 2: Your tax rate today versus your tax rate later

Here's where it gets interesting. The whole premise of a conversion is paying tax at a rate you know today to sidestep a rate you can't predict tomorrow. You're buying a kind of tax insurance.

One thing changed the backdrop for 2026. The One Big Beautiful Bill Act, passed in July 2025, made the lower TCJA-era brackets permanent, so the across-the-board rate jump that used to be scheduled for 2026 is off the table under current law. That "convert now before rates spike" urgency is gone. Planning still matters, it's just quieter.

But your own rate can still climb even if the tax code sits still. Two things push retirees up a bracket. First, required minimum distributions: if you were born in 1960 or later, they start at 75, and a large traditional IRA can throw off RMDs big enough to bump you into a higher bracket in your late 70s. Second, the widow's penalty. When one spouse passes, the survivor files as a single taxpayer, where the brackets are far narrower, often on nearly the same income. If your rate later is likely higher than it is now, converting at today's rate is the arbitrage.

What you have after this step: a comparison of the rate you'd pay converting now against the rate you or your survivor would likely pay drawing the money down later.

Lever 3: The phantom costs a conversion sets off

This is where most people stumble, because they only look at their bracket. A conversion adds to your income for the year, and that extra income can trigger costs that have nothing to do with your headline rate. I call them phantom costs.

Two show up most often. Cross an income line called IRMAA and your Medicare Part B and Part D premiums jump. In 2026 that line sits at $218,000 of modified adjusted gross income for a married couple ($109,000 single), and it's a cliff, not a slope: one dollar over prices the whole year at the higher tier. Medicare also looks back two years, so a conversion you run in 2026 raises the premiums you pay in 2028. If that's new to you, here's what IRMAA is and how the surcharge tiers work. The other phantom cost is your Social Security. More of your benefit becomes taxable as your other income rises, up to a ceiling of 85%.

Consider a couple we'll call Ted and Gail, both 64, normally around $130,000 of income and already on Medicare. They're tempted to convert $100,000 in one shot. That pushes their income to about $230,000, over the $218,000 IRMAA line, so their 2028 Part B and Part D premiums climb by roughly $2,297 for the year. On top of that, more of their Social Security lands in the taxable column. The conversion looked like a 24% decision. Add the phantom costs and the true rate that year is meaningfully higher.

The fix is almost always the same: spread the conversion across several smaller years, each one sized to stop just short of the next threshold. Being precise about the amount and the timing is the whole game. A few of these traps are covered in more detail in the disadvantages of a Roth conversion.

What you have after this step: a conversion amount sized to your income lines, not just your tax bracket.

Lever 4: Who the money is really for

This lever can flip the whole equation. Are you optimizing for your own retirement, or positioning money for your children and grandchildren? Under current law, most non-spouse heirs have to empty an inherited IRA within ten years, taxed at their own rates. If your heirs are high earners in their peak years, handing them a Roth they can drain tax-free is a real gift, and the case for converting strengthens even if your personal horizon is short.

But run it the other way too. If your kids are just starting out in a low bracket, prepaying their tax at your higher rate can cost the family money. Legacy planning cuts both directions, so it belongs in the math, not tacked on at the end.

What you have after this step: a clear answer on whether this money is for your retirement, your heirs, or both, and which bracket ultimately pays the tax.

Putting the four levers together

The break-even point isn't a single number you hit on a calendar. It's an outcome that falls out of how these four levers intersect in your situation.

Work them in that order and you'll know whether to convert, and how much, and in which years. Two guardrails hold it all together: don't convert so much you launch yourself into a dramatically higher bracket, and pay the tax from outside money so the full amount lands in the Roth. A market downturn is often a good moment, because you're converting a temporarily lower balance and the recovery happens tax-free.

If you want the actual lines a conversion runs into, our 2026 numbers sheet lists the brackets, the IRMAA thresholds, and the RMD ages on one page, so you can size your own conversions against real figures.

The goal was never to nail a break-even date. It's to pay the least tax across your whole life, and your family's, and sometimes that means converting in careful slices for a decade rather than betting it all on one year.

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