When You Can Do a Roth Conversion and What Stops You

You can do a Roth conversion almost any time, but the tax bill and your income in that year matter most

A Roth conversion means moving money from a traditional IRA, SEP-IRA, straightforward IRA, or a 401(k) into a Roth IRA. You can do this in any calendar year, and there is no age limit — you can convert at 25 or at 85. The IRS does not restrict when you convert based on time of year or how often you do it.

What actually stops you or makes conversion costly is your tax situation that year. When you convert, you owe income tax on the amount you move (unless it came from after-tax contributions). That tax bill is due when you file your return for that year. If your income is already high, a large conversion can push you into a higher tax bracket or trigger other tax consequences. If your income is low or zero, a conversion costs you little or nothing in taxes.

The real constraint is not the calendar — it is whether the tax cost makes sense for your situation right now.

Key Takeaways

You can convert money from a traditional IRA or 401(k) to a Roth IRA in any year, at any age, with no frequency limit.
The tax you owe on a conversion depends on how much you convert and what your total income is that year, not on when in the year you do it.
A conversion makes the most sense in years when your income is unusually low, such as after retirement, between jobs, or in a year you took a large loss.
If you have both pre-tax and after-tax money in traditional IRAs, the IRS treats all your traditional IRAs as one pool when you convert, which can create an unexpected tax bill.
You can undo a conversion (called a recharacterization) only if you do it before the tax important date for that year, including extensions.

Converting in a low-income year costs less in taxes

The main reason to time a conversion is to do it when your income is lower than usual. If you convert $50,000 in a year when you have no other income, you pay tax on $50,000 at your normal rate. If you convert the same $50,000 in a year when you earned $150,000, that $50,000 gets taxed at a higher rate because it sits on top of your other income.

Common low-income years include the year you retire (if you retire mid-year), a year between jobs, a year you took a large capital loss, or a year you had very little business income. Some people plan conversions around these events specifically to keep the tax bill down.

You do not have to wait for a low-income year to convert — you can convert whenever you want. But if you have a choice, a low-income year is usually the better time.

Age does not stop you, but required withdrawals can complicate things

There is no age at which you become unable to convert. You can convert at 30, at 65, or at 80. The IRS does not say "you are too old to convert" or "you must convert by this age."

What does matter is whether you are taking required minimum distributions (RMDs) from your traditional IRAs. If you are over 73 (as of 2024), you must withdraw a certain amount from your traditional IRAs each year. If you convert part of your IRA before taking your RMD for that year, you still owe the RMD on the remaining balance. You cannot convert your way out of an RMD.

Some people convert first, then take their RMD from what is left. Others take their RMD first, then convert the rest. The order does not change the tax — you owe tax on both the RMD and the conversion. But it can affect how much you have left to convert.

The pro-rata rule can create a surprise tax bill

If you have both pre-tax money and after-tax money in any of your traditional IRAs, the IRS treats all your traditional IRAs as one account for conversion purposes. This is called the pro-rata rule.

Here is how it works: Say you have $100,000 in a traditional IRA (pre-tax) and $20,000 in a SEP-IRA (after-tax contributions). You want to convert $20,000 from the SEP-IRA to a Roth. The IRS says you cannot just convert the after-tax part. Instead, it treats your total as $120,000, of which $20,000 is after-tax (about 17 percent). So 17 percent of your $20,000 conversion is after-tax (not taxed) and 83 percent is pre-tax (taxed). You end up owing tax on roughly $16,600 instead of $0.

This rule catches many people by surprise. If you have any pre-tax IRAs, even a small one, a conversion will be partially taxable. The only way around it is to move all your pre-tax IRAs into a 401(k) at work (if your plan allows it), which removes them from the pro-rata calculation.

You can undo a conversion before the tax important date

If you convert and then change your mind, you can undo it by the tax important date for that year, including extensions. This is called a recharacterization. You tell your IRA provider to move the money back to a traditional IRA, and you report the recharacterization on your tax return.

The important date is usually April 15 of the following year, or October 15 if you file an extension. If you miss this important date, the conversion is permanent and you owe the tax.

Recharacterizations are useful if you convert, the market drops, and you regret the decision. You can undo the conversion and try again in a later year. You can also recharacterize only part of a conversion if you converted more than you meant to.

Converting from a 401(k) has different rules than converting from an IRA

If your money is in a 401(k) at work, you can convert it to a Roth IRA, but the timing depends on your employment status. While you are still working, most 401(k) plans do not allow in-service conversions to a Roth. Once you leave the job, you can roll the 401(k) into a Roth IRA whenever you want.

Some employers offer a Roth 401(k) option within the plan itself, which is different from converting to a Roth IRA. If your plan has this option, you can move money from the traditional side to the Roth side while still employed, though the rules vary by plan.

The pro-rata rule does not explore to 401(k) conversions the way it does to IRA conversions. If you convert a 401(k) to a Roth, only the pre-tax portion of that 401(k) is taxed. After-tax contributions in the 401(k) come out tax-free. This is one reason some people move money into a 401(k) before converting — it lets them avoid the pro-rata rule.

Conversions in December versus January make almost no difference

Some people wonder whether it matters if they convert in December or January. It does not, from a tax standpoint. A December conversion is taxed in the year you do it. A January conversion is taxed in the following year. The only difference is which tax return the conversion appears on.

The real decision is whether the year you are converting in is a low-income year. If you are between jobs in November and will start a new job in January, converting in December (while your income is low) makes more sense than converting in January (when you have a full year of salary). But if your income is the same either way, the month does not matter.

Frequently Asked Questions

Can I convert if I am still working?

Yes. You can convert a traditional IRA to a Roth IRA at any time, whether you are working or retired. If you want to convert a 401(k), you usually have to wait until you leave that job, unless your plan allows in-service conversions. Check with your plan administrator to see what your plan allows.

What if I convert and the market drops right after?

You can undo the conversion by the tax important date (usually April 15 of the following year) through a recharacterization. You report it on your tax return, and the money goes back to a traditional IRA. You can then convert again in a later year if you want.

Do I have to convert all my IRAs at once?

No. You can convert one IRA, some of your IRAs, or all of them. But if you have multiple traditional IRAs, the pro-rata rule treats them as one account for tax purposes. You cannot convert just the after-tax portion and avoid tax on the pre-tax portion.

Can I convert after I start taking required minimum distributions?

Yes. You can convert at any age, even after you turn 73 and must take RMDs. You still owe the RMD for that year on the remaining balance in your traditional IRAs, but the conversion itself is allowed. The RMD and the conversion are both taxable.

What happens if I convert and then my income is higher than I expected?

You owe tax on the conversion based on your actual income that year. If your income was higher than you thought, you may owe more tax or be pushed into a higher tax bracket. You can undo the conversion by the tax important date through a recharacterization if you want to avoid the tax bill.

This guide is for general information only and is not medical, financial, legal, or other professional advice. For decisions specific to your situation, consult a qualified professional. See our Editorial Policy.