Roth Conversions: a New Era of ComplexitY

Thinking about a Roth conversion? President Trump’s “One Big Beautiful Bill” may have just turned a familiar tax-saving move into a trickier maze for retirement savers—and their advisors.

The Bill makes Trump-era lower tax brackets permanent—giving Roth conversion fans a longer runway for favorable rates. But, here’s the rub: the law also layers in a patchwork of temporary deductions (for seniors, tipped workers, and more) that phase out as your income rises. Move too much money via Roth conversions, and you could lose access to these new breaks or bump into a higher bracket, blunting the intended payoff.

As I shared with CNBC, the game is still about “tax bracket management,” methodically converting just enough each year to “fill up the lowest brackets” without triggering unnecessary tax charges or inadvertently increasing future Medicare premiums and other costs. Lower brackets are permanent—but temporary bonus deductions only last through 2028, and often phase out once income passes certain thresholds (e.g., $150,000 for married couples).  Converting at 22% or 24% rates might cost you a deduction, but could still be wise if it protects you from 30%+ brackets later due to mandatory withdrawals. Each Roth conversion now demands careful scenario planning around your current and future income, tax bracket, Medicare premiums (IRMAA), and the timing of these new-but-vanishing tax breaks.

The Roth conversion playbook isn’t dead—it’s just more nuanced. The door to tax-savvy conversions is wide open, but the path runs through a thicket of new rules. Now, more than ever, work with a financial planner to manage bracket creep and optimize not just your taxes, but your whole retirement income strategy.

Don’t let tax law whiplash or “bonus deduction FOMO” derail your long-term planning. The smart move is, as ever, making intentional, well-coordinated decisions—never letting the tax tail wag the retirement dog.