I started doing Roth conversions 5 years ago and I wrote about my first one here. I wanted to create a Roth conversion ladder so that I could have the option of withdrawing from my Roth account penalty free if I needed cash in early retirement. Now that I am not generating any W-2 income, I’m looking to see what my tax filing will look like next year since Roth conversions are considered as income. So for now, I am hold off on doing anymore Roth conversions.

A Roth account is a great retirement account to have. Everyone should have one! One of the biggest benefits of a Roth is that it grows tax free meaning what ever growth you have it will not be taxed when you withdraw. If you contributed $50K of your own money and the Roth account grew to $150K, you made $100K. That $100K is not taxed when you withdraw unlike a traditional pre-tax retirement account.

The restriction, because the account is so beneficial, is that there is a limit how much you can contribute. Also, if you earn over a certain household income you will not be able to contribute either. In 2026, the maximum contribution limit is $7500 or $8600 if you are age 50 and older. Another way to put money into your Roth is through a Roth conversion. That is converting pre-tax money from a traditional retirement account like an IRA and putting it into a Roth. There is not limit on how much you can convert, however the conversion amount is going to be taxed. The pre-tax account hasn’t been taxed yet so when a conversion happens you will have to pay taxes on it because it is going into an after-tax account.

If you’ve done a Roth conversion, you know that you will receive a 1099 tax form from your financial institution. It will show how much you converted and when you enter that into your tax filing you will have to pay taxes. That conversion is considered as income and will be taxed as ordinary income.

With only having one income in our household (wife’s income) I’m looking to see what tax strategies I can implement. Here are a few that I’m interested in

• 0% federal capital gains tax on long-term capital gains
• Leverage Tax-Loss Harvesting to Offset Spouse’s Income
• Tax-Bracket Management

Since this is my first year of early retirement I am holding off on doing any Roth conversions. I don’t want to generate any income, evaluate tax strategies, and develop a plan going forward. My plan could include Roth conversions so we will have to wait and see. If you are interested in following my journey, email subscribe here to get alerts of latest posts or follow me on Facebook, Instagram, and Pinterest.