When planning for retirement, taxes can take a bigger bite out of your savings than you might expect. One way to stay ahead of this is by considering a Roth IRA conversion.

Here’s how it works: you move money from a traditional IRA or 401(k) which hasn’t been taxed yet — into a Roth IRA. You’ll pay taxes on that amount now, but from then on, your money grows tax-free, and qualified withdrawals in retirement won’t add a dime to your income taxes.

Many people wonder, “Why pay taxes now if I can wait?” It’s a fair question — but here’s something to think about: with a traditional IRA or 401(k), you’re not just deferring taxes — you’re deferring taxes on an even bigger balance in the future. This means you could end up paying taxes on the original contributions plus years of growth at whatever tax rate applies down the road.

Renowned IRA expert Ed Slott highlights in his book The Retirement Savings Time Bomb Ticks Louder that today’s tax rates are historically low compared to what Americans paid in the past. With the national debt growing, Congress could raise tax rates in the future to balance the budget. By converting now, you lock in today’s rates and hedge against that risk.

Roth conversions can also help you reduce future required minimum distributions (RMDs) and give you more flexibility in retirement — plus, they can make it easier to leave tax-free money to your heirs.

Of course, Roth conversions aren’t a one-size-fits-all move. They can increase your taxable income in the year you convert, which could bump you into a higher tax bracket or affect your Medicare premiums. That’s why it’s so important to run the numbers and plan carefully.

If you’d like to explore whether a Roth conversion makes sense for you — and how to do it in the smartest way — We’re here to help. Let’s talk about how you can keep more of your money working for your future, not Uncle Sam’s.