A Spokane Financial Advisor’s Perspective on When a Popular Strategy Doesn’t Make Sense
Written by Noah Schwab, CFP®, a Spokane financial advisor
Roth conversions are often presented as one of the smartest moves you can make in retirement. Pay some tax today, reduce future required minimum distributions, and leave your heirs tax-free assets later on. I’ll admit I’m probably guilty at times of presenting Roth conversions as the best solution.
And in the right situation, they absolutely can be. But as a Spokane financial advisor who spends most of my time working with retirees and people within a few years of retirement, I’ve learned that Roth conversions are frequently oversold and just as frequently misunderstood.
They’re a tool. A powerful one. But like any tool, they can cause damage when used for the wrong job.
What’s missing from most Roth conversion discussions is context. Taxes don’t exist in isolation. Neither do retirement accounts. Your income, Medicare premiums, charitable goals, estate plan, and even your personal values all matter.
Below are the most common reasons I recommend not doing a Roth conversion, or at least not doing one as aggressively as many people initially assume they should. If you're wondering if you should do one this year, check out our: Should I Do a Roth Conversion in 2026 article.
The “Ideal” Roth Conversion Window (And Why It Still Requires Judgment)
You’ll often hear that the best time to do Roth conversions is after retirement, but before Social Security and required minimum distributions begin. That’s generally true. During this window, many retirees experience lower income and greater control over how much shows up on their tax return each year. For people who spent decades saving primarily in 401(k) plans, this can create real planning opportunities.
But lower income alone doesn’t automatically make a Roth conversion the right answer. What matters is not just what your tax rate is today, but what it’s likely to be over the rest of your life, and how your assets will ultimately be used (even after your lifetime)
A Real Client Example: When Roth Conversions Sound Good but Don’t Add Value
A client once came to me very focused on doing large Roth conversions. Their motivation was straightforward and understandable: they wanted to leave whatever was left to their kids tax-free. At first glance, Roth Conversions sound like the perfect solution. But once we dug into the details, the picture changed. After taking a deeper dive, a few key things stood out:
- Their required minimum distributions were not going to push them into a higher tax bracket when they turned age 73.
- They planned to leave roughly 20% of their estate to charities and the remaining 80% to their children
- They did not need the converted funds for spending
- Charitable giving was already an important part of their life
When we modeled their plan, the conclusion was clear: aggressive Roth conversions weren’t solving a real problem. In fact, they would’ve paid more taxes in the long run. Instead, I recommended a different approach. Rather than converting their IRA to a Roth, they began gifting the charitable portion of their estate during their lifetimes, using Qualified Charitable Distributions at age 70.5. By doing this:
- They satisfied future RMDs. (Check out our article on avoiding RMD taxes)
- They reduced taxable income
- They lowered their adjusted gross income
- And most importantly, they permanently avoided paying taxes on those assets
Those dollars will never be taxed. Not now. Not later. Not by their heirs. In this case, Roth conversions would have actually made the outcome worse, not better.
6 Situations Where a Roth Conversion Isn’t the Right Move
1. Charitable Giving Can Make Roth Conversions Unnecessary
This is one of the most common reasons Roth conversions don’t make sense, and one of the most overlooked. If you plan to give a meaningful portion of your wealth to charity, Qualified Charitable Distributions can be far more tax-efficient than Roth conversions. Once you reach age 70½, you can give directly from an IRA to a qualified charity. These distributions count toward required minimum distributions but are excluded from taxable income. That means:
- No income tax
- No increase to AGI
- No Medicare premium impact
When charitable intent is part of the plan, converting those same dollars to a Roth first often means paying taxes you never needed to pay. Check out our article on charitable giving strategies for Spokane by a Spokane financial advisor for more details about charitable gifting.
2. Roth Conversions Can Increase Taxes Even in “Low-Income” Years
Another misconception I see regularly is that a Roth conversion is safe as long as you’re in a lower tax bracket than when you were working. But that comparison misses the point. The real question is not “Is my tax rate lower than it used to be?” It’s “Is my tax rate lower than it will be later?” If your future required distributions stay within reasonable brackets or are partially offset by charitable giving, converting today may not reduce lifetime taxes at all.
3. Medicare IRMAA Surcharges Are Often the Hidden Cost
Roth conversions increase income. Medicare premiums are based on income from the two years prior (for most, it’ll be a factor starting at age 63). That combination can be expensive. Large conversions can trigger Medicare IRMAA surcharges, increasing premiums for Part B and Part D for an entire year. For married couples, this can easily add several thousand dollars in costs. When evaluating Roth conversions, Medicare isn’t a side note; it’s a core part of the analysis. For more details on IRMAA, check out our article on IRMAA, explained by a Spokane financial advisor.
4. Future Taxes Aren’t Always Higher
Roth conversions are ultimately a bet on future tax rates. Sometimes that bet pays off. Other times, it doesn’t. If future income is naturally moderated by charitable giving, spending patterns, or changes in household circumstances, waiting may result in paying taxes at the same or even lower rates later on. In those situations, paying taxes early through a Roth conversion may not improve the overall outcome.
Some clients also believe that tax rates will generally be lower in the future, which can be another reason to delay or limit Roth conversions. Personally, I’m cautious about using this assumption alone as the deciding factor. With national debt levels as high as they are, it’s difficult to argue that tax rates will meaningfully decline over the long term. In fact, current tax rates are historically low, which suggests future increases are at least possible. The key point is this: paying taxes early only makes sense when it clearly reduces lifetime taxes, not simply because of speculation about where tax rates might go.
5. How You Pay the Tax Matters
Roth conversions tend to work best when taxes are paid from non-retirement assets. If taxes are withheld from the IRA itself, the benefits shrink. You convert less, lose future tax-free growth, and may even trigger penalties if you’re under 59½ (see IRS rules on early distribution penalties here). In many cases, slowing down or skipping conversions altogether is the more prudent move.
6. Simplicity Has Real Value in Retirement
Finally, there’s a practical consideration that’s easy to ignore. Roth conversions add complexity. Ongoing projections. Medicare monitoring. Estimated payments. Multiple account types. For some retirees, the added complexity simply isn’t worth the marginal benefit. Good planning should make retirement easier, not turn it into a constant tax optimization exercise.
Final Thoughts From a Spokane Financial Advisor
Roth conversions can be incredibly useful when they solve the right problem. But the goal isn’t to maximize Roth balances. It’s to minimize lifetime taxes while aligning with how you actually plan to live, give, and leave your wealth behind.
In many cases, especially when charitable giving is part of the picture, the smartest move is not converting at all. That’s why thoughtful, individualized planning matters. If you’re considering Roth conversions, the most important question isn’t “Can I do one?” It’s “Should I?” And the answer depends on far more than just your tax bracket this year.
Talk with our Spokane Financial Advisor team
About the Author
Noah Schwab, CFP® is a financial advisor in Spokane, Washington, helping retirees with $ 1M+ maximize their 401(k) with Roth conversions and tax strategies.
- No commissions or insurance
- Investment management, tax, and financial planning
Noah Schwab, CFP®, is a Spokane financial advisor specializing in helping retirees with tax-efficient retirement income strategies, Roth conversions, and estate planning. This article is for educational purposes only and should not be considered tax or legal advice.
