Roth conversion strategies, from simple to advanced
There's a whole spectrum of ways to move retirement money into a Roth and keep more of it — from simple timing anyone can use, to advanced deduction offsets high earners deploy in high-income years. Here's the landscape, and where to go deep on each.
Every strategy, modeled and ranked
We ran the same balance through all four core paths and ranked them by after-tax outcome — the gap can top $2 million. It's the fastest way to see which approach fits your situation.
Core strategies
The timing decisions that drive most of the benefit — no special investments required.
Leave it traditional
Keep deferring and pay ordinary tax on withdrawals later. Simple — but required minimum distributions and fully taxable withdrawals await. Right mainly if you'll be in a lower bracket later.
Convert in a lump
Convert the whole balance at once and pay the tax now from outside funds. Best in a single unusually low-income year with a long runway for tax-free growth.
Ladder over years
"Bracket filling" — convert a slice each year to keep each one in lower brackets. Often the practical winner, especially in early-retirement gap years before Social Security and RMDs.
Or read the full Roth conversion guide.
Advanced: offset the conversion tax
In a high-income year, large same-year deductions can absorb the conversion income so little or no tax is due. These involve real investments and real risk — and belong alongside a CPA.
Oil & Gas
Investing in an oil & gas working interest the same year you convert generates large first-year deductions. Intangible drilling costs are treated as ordinary losses that net directly against the conversion income on your return.
- IDCs deductible in year one under IRC §263(c)
- Depletion allowance shelters ongoing production income
- Working-interest income treated as active, not passive
Real Estate
Value-add real estate naturally dips through renovation — the J-curve. Held in a self-directed IRA with non-recourse debt, that trough means converting at genuinely low net equity, with future appreciation growing tax-free inside the Roth.
- Conversions taxed on net equity: as-is FMV minus the loan
- Leverage amplifies the natural value curve into a deep equity trough
- Entity interests can add lack-of-control and marketability discounts
Not sure which fits your situation?
Run your balance through the calculator to compare every path and the monthly income each could fund — then read the full study.