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Converting a traditional IRA to a Roth IRA could create years of tax-free retirement withdrawals. Do it carelessly, however, and you could trigger an enormous tax bill in a single year. Dave Ramsey's simple strategy may help some savers control that cost while strengthening a retirement plan. The biggest decision may not be whether to convert, but how quickly you do it.
Ramsey sums up the approach with one word: "dribble." During a call on The Ramsey Show, Ramsey suggested moving a traditional retirement balance into a Roth gradually. His advice was to 'do a little bit a year and kind of dribble it out' instead of converting everything at once.
His point was straightforward. A slow series of conversions may prevent too much income from piling into the highest federal tax brackets during one year.
Here's how the strategy works.
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A Roth conversion creates a tax bill today
A Roth conversion moves money from a traditional IRA, 401(k), or another eligible pretax retirement account into a Roth account. The taxable portion of the conversion is added to your ordinary income for that year, but qualified Roth IRA withdrawals could generally be tax-free later.
The IRS allows conversions regardless of income. That freedom could be useful, but it also makes an oversized conversion easy to execute.
Suppose you receive $70,000 annually from a pension, part-time work, investments, or other taxable sources. Converting another $500,000 doesn't create a separate tax category. Instead, the conversion stacks on top of your existing income and fills progressively higher brackets.
Dribbling could help keep more money in lower brackets
The federal income tax system is progressive, which means different portions of taxable income face different rates. For married couples filing jointly in 2026, for example, the 12% bracket ends at $100,800, the 22% bracket ends at $211,400, and progressively higher rates apply as taxable income rises, according to the IRS tax schedules. A large one-time conversion could therefore push hundreds of thousands of dollars into the 32%, 35%, or 37% brackets. On the flipside, smaller conversions may let a household repeatedly use lower brackets over several years.
That's the basic idea behind what tax professionals often call "filling up" a tax bracket. You estimate how much taxable income you'll have, identify the top of a chosen bracket, and convert only enough to use the remaining room.
The difference could potentially reach six figures
Consider a simplified example involving a married couple with a $1 million traditional IRA and no other taxable income. Using the 2026 married-filing-jointly brackets and $32,200 standard deduction, converting the entire balance in one year could produce a federal income tax bill of roughly $280,000 based on the current progressive tax rates. However, converting $100,000 annually for 10 years, using the same brackets and deduction each year, would produce approximately $76,000 in total federal tax, a difference of more than $200,000.
That example only demonstrates how progressive brackets work. It ignores investment growth, inflation adjustments, state taxes, Social Security, Medicare premiums, other income, and future changes in tax law. A real household might save much less, or it might discover that a faster conversion creates a better long-term result.
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Dribbling isn't automatically the best answer
Ramsey said that moving up a bracket or two could be reasonable, provided the conversion doesn't push too much income into the very highest rates. In other words, chasing the lowest possible bracket every year shouldn't stop you from converting at all.
On the other hand, some retirees may want to skip conversions altogether. When your current conversion rate is higher than the rate you'll probably pay on traditional IRA withdrawals later, voluntarily paying tax early may cost you rather than save you money. Large conversions could also increase taxes on Social Security, reduce income-based deductions, or trigger higher Medicare premiums, so every part of the tax return matters.
Bottom line
Would paying some tax now prevent a larger bill later, or are you already paying a higher rate than you're likely to face in retirement? Pull out last year's return, estimate this year's taxable income, and measure the space between your projected income and the next tax-bracket threshold.
It's also a good idea to run several conversion amounts with a qualified tax professional before moving money so you could avoid wasting money on such a crucial tax decision.
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