Roth Conversion Disadvantages: 4 Ways It Can Backfire.

A Roth conversion moves money from a traditional IRA into a Roth IRA, where it grows tax-free for the rest of your life. For a lot of retirees, that's a smart move. It's not right for everyone. The main disadvantages of a Roth conversion show up in four situations: when the upfront tax bill is more than you can comfortably pay, when you would have to raid the IRA itself to cover that tax, when your heirs will inherit in a lower bracket than yours, and when the conversion quietly raises taxes on your Social Security and your Medicare premiums.

None of these mean a conversion is a bad idea. They mean it has to be sized and timed to your numbers, which is the same thing we work through in the four questions we ask before any conversion. This piece is about the other side of that coin: when converting actually backfires. The video below walks through the same four reasons, and the sections after it update every figure for 2026 and add two shadow taxes the video never named.

Watch: Patrick Shope on the four reasons a Roth conversion can backfire.

Reason 1: The tax bill is bigger than you can stomach

Say you are thinking about converting $200,000 from your traditional IRA. If you are in the 24% bracket, that conversion creates a tax bill of about $48,000. That's a big check to write to the IRS, even when it makes sense on paper.

Here's the thing about personal finance that people forget: it's personal. I've seen people lose sleep over large tax payments, even when they know it's the right move mathematically. Think about it this way. Would you rather write one $48,000 check now, or pay smaller amounts over time as you draw down the traditional IRA in retirement? For some people the peace of mind that comes with predictable, smaller payments is worth more than the theoretical savings.

That's not being irrational about money. It's knowing your own comfort with a large, immediate expense. I've had clients run the math three times, land on "yes, convert," and still not be able to write that check, and I've never once told them they were wrong to feel that way. If one big bill keeps you up at night, converting less, or not at all, is a perfectly valid answer.

Reason 2: You would have to pay the tax out of the IRA itself

This one separates a good conversion from a bad one faster than almost anything else. The tax you owe should come from outside money, a savings or brokerage account, not from the IRA you are converting.

Here's why it matters so much. Say you convert $100,000 and that creates a $22,000 tax bill. If you have $22,000 sitting in savings, great: you pay the tax from savings and the full $100,000 lands in the Roth, growing tax-free. But if you don't have that outside cash, you have to use the IRA money to pay the tax. Now you are really only moving $78,000 into the Roth, and $22,000 goes to the IRS. That $22,000 is gone for good.

Let me show you the math on what "gone for good" costs. If that $22,000 had stayed invested and grown at 6% a year for 20 years, it would have become about $70,600. So by not having outside funds to pay the tax, you give up roughly $70,600 of future tax-free growth. That is the same trade-off that decides how long a conversion takes to pay for itself. If covering the tax would drain your emergency fund or force a bad-timing sale, that's usually a sign to convert less, or wait.

Reason 3: Your heirs will be in a lower tax bracket than you

One of the biggest selling points of a conversion is that your children, and maybe grandchildren, inherit the money tax-free. But think it through. If you are in the 32% bracket and your kids are just starting out in the 12% bracket, are you really doing them a favor by prepaying their taxes at your higher rate?

Here's a real example. You are 65, earning well, in the 32% bracket, and you convert $150,000. That costs you about $48,000 in tax. Your daughter is 28, teaching, in the 12% bracket. If you skip the conversion and she inherits that traditional IRA instead, the same $150,000 costs her about $18,000 at her rate, not the $48,000 you would have paid. You would be spending $30,000 to solve a problem she doesn't have.

I know what you are thinking: won't she move into a higher bracket as her career grows? Maybe. Maybe not. And even if she does climb, there's a good chance she stays below where you are now. Under current law, most non-spouse heirs have to empty an inherited IRA within ten years, taxed at their own rates. So the question is bigger than your tax bracket today. It also depends on the likely bracket of whoever inherits the account.

Reason 4: The conversion sets off shadow taxes you did not plan for

This is the reason that catches people off guard, and it is where a 2026 conversion has more moving parts than the video shows. A conversion adds to your income for the year, and that extra income can trigger costs that have nothing to do with your headline tax bracket. I call them shadow taxes. There are three worth watching.

Taxes on your Social Security. How much of your Social Security gets taxed depends on your provisional income, which is your other income plus half of your benefit. The thresholds for a married couple are $32,000 and $44,000 ($25,000 and $34,000 if you are single). Say you have $40,000 of other income and $30,000 of Social Security. Your provisional income is $40,000 plus half of $30,000, or $55,000. That clears the $44,000 married line, so up to 85% of your benefit can be taxed. Notice the words "up to." That 85% is a ceiling, not the result. Run the actual formula at $55,000 and about $15,000 of the $30,000 benefit becomes taxable, a little more than half. Drop a large conversion on top of that and you can push more of the benefit into the taxable column, so the conversion is taxing your Social Security too.

Higher Medicare premiums. Cross an income line called IRMAA and your Medicare Part B and Part D premiums go up. In 2026 that line sits at $218,000 of modified adjusted gross income for a married couple filing jointly, or $109,000 for a single filer. Medicare looks back two years, so a conversion you do in 2026 can raise the premiums you pay in 2028. A large conversion at 63 can raise your premiums the year you turn 65. If that's a new term to you, here's what IRMAA is and how the surcharge tiers work.

The senior deduction you can lose. This one is brand new. For tax years 2025 through 2028, each person 65 or older gets an extra $6,000 deduction, or $12,000 for a couple where both are 65 and up. It starts phasing out above $150,000 of income for a married couple ($75,000 single) and disappears entirely above $250,000 ($175,000 single). A big conversion can wipe out up to $12,000 of that deduction for a 65-plus couple in the year they convert.

Here's how these stack up. A couple we'll call Ray and Diane, both 65, normally land around $140,000 of income. They are tempted to convert $120,000 in one shot to get it over with. That single conversion pushes their income to about $260,000. On paper they are paying a 24% rate. In reality, that year they lose the full $12,000 senior deduction, they land above the $218,000 IRMAA line so their 2028 Medicare premiums climb, and more of their Social Security becomes taxable. Their true cost is well north of 24%. Spread the same $120,000 across four or five smaller years and most of that damage never happens. You see, this is why the timing and the amount matter as much as the decision to convert at all.

So when do the disadvantages of a Roth conversion actually bite?

Put simply, they bite when a conversion is too big, too soon, or aimed at the wrong person. If a large tax bill would keep you up at night, if you would have to pay the tax from the IRA itself, if your heirs will inherit in a lower bracket, or if the conversion trips the shadow taxes above, those are real reasons to think twice. Notice none of them say "never convert." They say "convert carefully."

The fix for most of them is the same: smaller conversions, spread across the right years, sized to stop just short of the next threshold. If you want the actual lines a conversion runs into, our 2026 numbers sheet lists the brackets, the IRMAA thresholds, and the RMD ages on one page.

The goal was never to pay zero tax this year. It's to pay the least tax over your whole life, and your heirs' lives too. Sometimes that means converting, and sometimes it means leaving the traditional accounts right where they are.

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