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Will Roth conversions before 2026 affect new RMD rules for traditional IRAs and 401(k)s?
Executive summary
Roth conversions done before 2026 can change the taxable balances that later drive Required Minimum Distributions (RMDs) and therefore may reduce future RMD amounts and taxable income, but conversions cannot substitute for or count as RMDs and you must take any RMD due before converting in the same year [1] [2] [3]. New law changes scheduled around 2026 — and employer plan Roth catch-up rules beginning in 2026 — shift the conversion calculus (tax-bracket timing, Roth treatment in plans, and RMD treatment of Roth sources), so timing conversions relative to 2026 could matter for tax-rate arbitrage and future RMD exposure [4] [5] [6].
1. What Roth conversions change — smaller future RMD bases
Converting pre‑tax traditional IRA or 401(k) money to a Roth reduces the pre‑tax account balances that the RMD formula uses in later years, so doing conversions before RMDs begin (or in early RMD years after taking that year’s required amount) generally produces smaller future RMDs and less taxable income down the road [1] [7] [3]. Analysts model conversions as a way to “avert” taxable distributions later — for example, converting $100,000 at one rate to avoid a later taxable distribution at a higher rate can create a fixed net present value benefit if future rates are known [4].
2. What conversions cannot do — they don’t satisfy RMDs
The IRS and multiple advisors are unequivocal: a Roth conversion does not count as your RMD and you cannot convert an RMD directly into a Roth. If you are required to take an RMD in a given year, you must take that RMD first; any conversion in that same year must be separate and cannot be used to satisfy the RMD obligation [2] [8] [3] [9]. Investopedia and other explainers state the IRS prohibits converting RMDs directly to a Roth [10].
3. Timing around 2026 — why many are focused on that year
Several pieces of reporting and advisory analysis flag 2026 as a pivotal tax-timing year: scheduled expirations or statutory changes can shift marginal tax rates and bracket widths, which affects whether converting earlier (pay tax now) is likely to be cheaper than paying tax later on distributions. Some analyses quantify the arbitrage: converting at one rate in late 2025 to avert a 2026 distribution taxed at a higher statutory rate can yield a calculable NPV gain [4]. Also, employer-plan rules change starting in 2026: high‑earner catch‑up contributions must be made as Roth in some cases beginning in 2026, and plan Roth sources’ RMD treatment is evolving, which alters the landscape for plan‑level Roth planning versus IRA conversions [5].
4. Practical sequencing rules advisors emphasize
Practitioners and custodians stress sequence discipline: if you’re subject to RMDs, take the year’s RMD before converting any funds in that same account; you may convert more than the RMD amount, but the RMD itself can’t be converted [2] [11] [3]. For people who can defer a first RMD (e.g., take the prior‑year exception and delay to April 1 of the following year), conversions timed around that window can affect the optimal tax year for conversion vs. distribution [11].
5. Tradeoffs and second‑order consequences: brackets, IRMAA, inheritance
Conversion reduces future RMDs but raises current taxable income, which can push you into higher brackets or increase Medicare IRMAA surcharges; conversely, permanent tax‑law changes (or legislative moves) can remove urgency to convert now if lower brackets stay in place [4] [6] [7]. Roth accounts are also attractive for heirs and for eliminating lifetime RMDs on Roth IRAs — another motive for conversions that interacts with new RMD rules for plan Roth sources [1] [5].
6. Competing viewpoints and reporting gaps
Advisory firms and planners uniformly agree that conversions reduce later RMD exposure but unanimously warn conversions don’t substitute for RMDs [2] [8] [3]. Where sources diverge or remain conditional is on the size of the benefit: academic or modeling pieces compute specific NPV numbers under assumed rates and law paths [4], while custodians and how‑to pieces focus on operational rules and sequencing without quantifying payoff [2] [12]. Available sources do not mention whether Congress will enact further tax changes after the items cited here beyond the scenarios modeled (not found in current reporting).
7. Bottom line for readers deciding now
If your goal is to reduce the taxable base that drives future RMDs, converting pre‑tax balances to a Roth before those distributions occur will achieve that effect, but you must pay income tax this year and you cannot use conversions to meet required withdrawals — always take any required RMD first in a year you’re subject to one [3] [2] [8]. Because 2026 brings both statutory tax‑rate uncertainty and new employer‑plan Roth rules, consult a tax adviser who can model your bracket trajectory, Medicare impacts, and the specific 2026 plan rules before executing conversions timed around that year [4] [5].