Roth conversions are one of the most popular retirement tax strategies today. If you’ve spent any time on financial websites, YouTube, or social media, you’ve probably been told that converting your traditional IRA or 401(k) to a Roth IRA is a no-brainer.
You’ve likely heard claims like:
- “Avoid required minimum distributions (RMDs)”
- “Lock in tax-free income for retirement”
- “Save tens or even hundreds of thousands in future taxes”
But here’s the truth: Roth IRA conversions aren’t always a good idea—and in some cases, they can actually do more harm than good.
In this article, we’re breaking down four practical reasons why you might not want to do a Roth conversion, even if everyone online is telling you to. We’ll walk through the real tax impact, the cash flow challenges, and the long-term breakeven math so you can make a better-informed decision.
Reason #1: You Don’t Have the Cash to Pay the Taxes
The most common reason people shouldn’t do a Roth conversion is simple—they don’t have the cash to pay the taxes.
Most retirement savers have:
- Significant assets in pre-tax retirement accounts
- Home equity
- Minimal liquid savings
That makes paying taxes out-of-pocket on a Roth conversion hard to pull off. If you end up withholding taxes from the converted amount, all you’re doing is reducing the amount that lands in your Roth—and that defeats the purpose.
Your Roth IRA is your most powerful retirement account because it grows and distributes tax-free. If you shrink it on day one, you’re undercutting the long-term benefit.
Unless you have the cash to pay taxes separately, it’s often better to wait.
Reason #2: Your Income Is Too High Right Now
Timing matters with Roth conversions.
If you’re in your peak earning years and considering converting a large pre-tax balance, you could be paying income tax at one of the highest marginal tax brackets of your life.
Instead of converting now and locking in a steep tax bill, it might make more sense to wait until retirement—when you have lower taxable income and can convert at lower tax rates.
That gap between retirement and the start of RMDs (currently age 73) can be a perfect window for strategic Roth conversions. Until then, you may want to hold off.
Reason #3: You Might Not Live Long Enough to See the Benefit
This part isn’t fun to talk about, but it’s important: many Roth conversion strategies take decades to break even.
In one example we ran (visit our YouTube and watch the video here: https://www.youtube.com/watch?v=UYpTK3gdJBI&t=54s), a couple in their early 60s aggressively converted large portions of their pre-tax retirement accounts. The breakeven point—the point at which they’d paid less in taxes compared to doing nothing—didn’t occur until age 85.
And that’s the problem. If the strategy only pays off in your 80s, there’s no guarantee you’ll be around to see the benefit. Neither will your spouse.
This is why you have to run the breakeven math before pulling the trigger. Just because a Roth conversion looks good on paper doesn’t mean it makes sense for you.
Reason #4: You Don’t Want the Upfront Tax Hit
Even if you run the numbers and the Roth strategy looks good, there’s still one big hurdle: writing the check to the IRS.
Paying a large amount of taxes upfront—sometimes tens of thousands of dollars—isn’t something everyone is comfortable with, even when the long-term math works in your favor.
That discomfort is valid.
If you’re not ready to make that tradeoff—to pay more now for the chance of saving later—then you shouldn’t feel pressured to convert. Roth conversions are optional. You don’t have to do them.
The best financial decisions are the ones that work for your balance sheet and your mindset.
Final Thoughts
Roth conversions are one of the most effective retirement tax strategies out there—but only when done at the right time, with the right plan, and for the right reasons.
Before jumping in, ask yourself:
- Can I afford the taxes out of pocket?
- Is this the right tax year to convert?
- What’s my breakeven point?
- Am I comfortable with the short-term cost?
If you’re unsure, it’s worth talking to a professional.
At MDRN Wealth, we help clients evaluate Roth conversion strategies within the full context of their retirement plan, taxes, income needs, and long-term goals.
Disclaimer
This content is for informational purposes only and does not constitute legal or tax advice. Always consult a financial advisor or tax professional before implementing Roth conversion strategies or making changes to your retirement accounts.
