You can move funds from a traditional IRA, 401(k), or TSP to a Roth IRA. Pay taxes now on the converted amount; enjoy tax-free growth and qualified withdrawals later (after age 59½ and the 5-year rule).[1]
No income limits—unlike regular Roth contributions ($7,500 limit in 2026, or $8,600 if 50+).[2] High earners can use the “backdoor Roth” workaround.
Why now?
- Lock in current tax rates before potential future increases
- No lifetime RMDs—let assets grow longer
- Tax-free inheritance for heirs
- Hedge against potential tax law changes, with temporary benefits like the $40,000 SALT cap (through 2029, with 1% annual increases starting 2026)[3]
Some things to consider:
- Added taxable income (could affect brackets, Medicare premiums, or deductions)
- Need cash outside retirement accounts to pay taxes on the conversion
- Conversions are permanent
- Pro-rata rule applies if mixing pre- and post-tax funds
- Separate 5-year clock for conversions to avoid penalties on early withdrawals[4]
[1] IRS guidelines on Roth conversions and qualified distributions.
[2] IRS Notice 2025-67: 2026 IRA contribution limit $7,500 ($8,600 catch-up); phase-outs $153,000–$168,000 single, $242,000–$252,000 joint.
[3] One Big Beautiful Bill Act (OBBBA): SALT cap raised to $40,000 (2025–2029), with phase-down above $500,000 income.
[4] Fidelity & Schwab: 5-year rule for conversions; pro-rata rule for mixed-basis IRAs.
Best approaches: Convert gradually over years to stay in lower brackets, especially in lower-income periods like early retirement.
Roth conversions aren’t universal, but for those expecting higher future taxes or wanting tax-free flexibility, they can be powerful.
Ready to model your scenario? Contact us at Kerr Wealth Advisors, we’ll run the numbers tailored to you.
H. Brad Kerr IV, Vice President/ Wealth Management, Financial Advisor
215.619.3926/ bkerr4@janney.com
1767 Sentry Parkway West Suite 110 Blue Bell, PA 19422
Janney Montgomery Scott LLC Financial Advisors are available to discuss all considerations and risks involved with various products and strategies presented. We will be happy to provide a prospectus, when available, and other information upon request. Janney Montgomery Scott LLC, its affiliates, and its employees are not in the business of providing tax, regulatory, accounting, or legal advice. These materials and any tax-related statements are not intended or written to be used, and cannot be used or relied upon, by any taxpayer for the purpose of avoiding tax penalties. Any such taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor. Janney Montgomery Scott LLC is a member of the New York Stock Exchange, Financial Industry Regulatory Authority and the Securities Investor Protection Corporation.
For more information about Janney, please see Janney’s Relationship Summary (Form CRS) on www.janney.com/crs which details all material facts about the scope and terms of our relationship with you and any potential conflicts of interest.
