Roth individual retirement account conversions can potentially reduce lifetime taxes. But the strategy isn't right for everyone, and the choice is now more complex amid updates from President Donald Trump's "big beautiful bill" and other changes.
Roth conversions transfer pretax or nondeductible IRA funds into a Roth IRA, which kick-starts tax-free growth. The trade-off is that they can trigger more income in the year of the conversion.
The move can be attractive if you have large pretax retirement balances and you expect higher tax rates when it's time to withdraw the funds, experts say.
At year-end 2025, IRA-owning households in the U.S. had $15.9 trillion in assets in traditional IRAs, compared with $2.4 trillion in after-tax Roth IRAs, according to a 2026 report from the Investment Company Institute, an investing trade organization.
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Weighing Roth conversions, or partial Roth conversions, is "a strategy that continues to be very popular year-over-year," said Charissa Anderson, a certified financial planner who is an executive vice president at Ferguson Wellman Capital Management in Portland, Oregon. Her firm ranked No. 52 on CNBC's Financial Advisor 100 list for 2026.
As of March 31, Roth conversions were up 41% this year compared with the same period in 2025, according to the latest Fidelity data, based on an analysis of 19.6 million IRA accounts.
"There are just so many variables" when analyzing a possible Roth conversion, said Tommy Lucas, a CFP at Moisand Fitzgerald Tamayo in Orlando, Florida. His firm is ranked No. 44 on CNBC's Financial Advisor 100 list for 2026.