Chuck Oliver, Founder of the Hidden Wealth Solution, Explains When to Convert Your IRA to a Roth — and When Not To

As tax rates are expected to rise and the federal deficit reaches historic highs, many Americans approaching retirement are reevaluating how their savings will be taxed in the years ahead. One of the most debated strategies is whether to convert a traditional IRA or 401(k) into a Roth IRA. While the promise of tax-free income in retirement is appealing, the decision to convert is highly nuanced, dependent on factors such as timing, income sources, income levels, tax outlook, tax law changes, Medicare considerations, Social Security considerations and long-term family legacy planning.

For retirees and high-income earners seeking clarity, Chuck Oliver’s approach at The Hidden Wealth Solution provides a framework for understanding when a Roth conversion delivers meaningful long-term tax savings, and when it may be a costly mistake.

How Retirement Accounts are Taxed 

The decision often begins with examining how retirement accounts are taxed. Contributions to a traditional IRA or 401(k) grow tax-deferred, but withdrawals in retirement are fully taxable, often creating substantial lifetime tax exposure. Converting to a Roth IRA requires paying taxes on the amount converted now—in exchange for eliminating future taxes on growth and withdrawals. While simple in concept, the impact on Medicare premiums, Social Security taxation, taxable income thresholds, Required Minimum Distributions, and inheritance rules makes this a more complex calculation than most expect.

One example is a retiree who recently sought help from Chuck Oliver and The Hidden Wealth Solution after years of diligent saving. Approaching 70, he realized that his Required Minimum Distributions, which begin at 73 for his birth year, would force him to withdraw far more from his IRA than he would otherwise need. His CPA had focused solely on compliance, filing deadlines, and reporting. However, he had not advised him on how RMDs would push him into higher tax brackets, increase Medicare premium surcharges, and create a sizable tax burden for his children under the 10-year inherited IRA rule. This scenario is increasingly common and highlights the importance of evaluating a conversion early.

Roth Conversions: Tax-Free Growth 

There are compelling tax reasons to consider a Roth conversion. The first is the potential for tax-free deferred growth, tax-free income in retirement and tax-free legacy transfer. Roth withdrawals don’t count as income, which means they do not increase Medicare premiums, trigger higher capital gain rates, or raise the taxable income portion of Social Security benefits. For retirees concerned about rising tax brackets or the steady escalation of Medicare surcharges, shifting future income to a Roth can create a more predictable and efficient tax and income environment.

Flexibility and Timing are Crucial 

As Chuck Oliver notes, timing is equally important. Converting when markets are down or when income is unusually low can reduce the tax cost of the conversion. Some retirees strategically convert portions of their IRA over several years, keeping each year’s income below key thresholds to avoid unnecessary taxes. Others pair a conversion with tax-deduction strategies that offset added income, reducing or even eliminating the tax impact.

Flexibility is another key advantage of Roth accounts. Traditional IRAs force withdrawals based on IRS formulas, regardless of whether the retiree needs the money. Roth IRAs, on the other hand, have no lifetime Required Minimum Distributions, giving retirees greater control over when and how they draw income. This flexibility helps them manage tax exposure in years when unexpected expenses arise, and it allows families to pass tax-free assets to children or grandchildren who would otherwise face significant inherited IRA taxes.

According to The Hidden Wealth Solution, another strategic reason to convert is the expectation of higher future tax rates. Several new tax laws sunset after 2028, and the combination of rising deficits and increases in government spending makes future tax hikes likely. Many retirees are currently in the lowest tax environment they may ever see. Converting now shields future growth and legacy from taxation.

Roth conversions can also simplify multi-generational planning. Leaving a traditional IRA to children often results in substantial taxation, especially since heirs must withdraw the full balance within 10 years. In contrast, Roth assets inherited by children still must be withdrawn within 10 years but come out tax-free. This difference can preserve hundreds of thousands of dollars, particularly for beneficiaries in their peak earning years and or live in higher state taxed states.

Potential Downsides of a Roth Conversion 

However, a Roth conversion is not always beneficial, notes Chuck Oliver. There are scenarios where converting may create more tax problems than it solves. For example, if a retiree expects significantly lower income in a future year, waiting may produce a better tax result. Those who would need to use IRA funds to pay the conversion tax often lose the compounding benefit they were hoping to achieve. Retirees who need access to converted funds within five years may inadvertently trigger penalties if they withdraw the gains. And individuals who are already in a high tax bracket this year—perhaps due to a business sale, a bonus, or a large capital gain—might push their income into a punitive tax tier by converting. Several people overlook the opportibity cost of paying the converdison tax an fail to account for the growth of theese funds that are forfeited to the government to pay the conversion tax. Everyone doesn’t benefit from Roth converting and some people are sadly not exposed to proactive tax savings strategies many tax and financial professionals are not educated on that can prevent Roth conversion taxes.

The complexity increases for anyone 63 or older, because Roth conversion income affects Medicare premiums two years later. A well-intended conversion can unintentionally increase Medicare Part B and Part D costs, creating a tax ripple effect that retirees never anticipated.

The Bottom Line 

Chuck Oliver and The Hidden Wealth Solution note that the decision ultimately comes down to individualized planning. General advice, such as “convert when taxes are low” or “start a Roth if markets are down,” oversimplifies what is often a multi-variable calculation. Evaluating a conversion requires projecting future tax rates, income levels, RMD obligations, health costs, portfolio growth, and inheritance plans. For many, the most effective strategy blends partial conversions, deduction planning, withdrawal sequencing, and long-term tax modeling.

As tax laws evolve and retirement horizons lengthen, the value of proactive planning grows substantially. Retirees who understand the long-term implications of their savings structure can protect their income, reduce lifetime tax exposure, and preserve more wealth for future generations. And those who act while tax rates remain historically low may find the greatest benefit.

For individuals evaluating whether a Roth conversion makes sense, Chuck Oliver emphasizes personalized analysis, forward-looking tax modeling, special software (not able to be best determined with the do it yourself engineer spreadsheets) and strategies designed to minimize taxable income. In an environment of uncertainty and rising fiscal pressure, thoughtful planning can make the difference between retirement defined by tax surprises and one defined by financial freedom.

About Chuck Oliver 

Chuck Oliver is the founder and CEO of The Hidden Wealth Solution, a nationally recognized wealth strategist firm specializing in tax-efficient retirement and legacy planning. A two-time best-selling author, national radio host, and lifelong entrepreneur, Chuck helps clients across the U.S. reduce taxes, minimize market risk, and create lasting financial confidence. His passion for empowering others to overcome financial uncertainty drives his belief that true wealth is built through clarity, confidence, and capability.