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When we talk about converting a TIRA to a Roth, it's just a game of current income tax rates versus future income tax rates. Everything else in the game is equal

Keep in mind all else is not equal. When you do a Roth conversion and pay the taxes from outside the Roth, you're increasing your tax sheltered investments on an after tax basis. So, holding tax rates equal, you would always want to do the Roth conversion.


Yes, I agree with that statement, your tax shelter increases in after-tax value. But you then have to account for the opportunity cost of the after-tax money you used to pay for the taxes.

I think the statement still holds that if you expect your income tax rates to be lower during retirement, there's no compelling reason to convert existing money from a TIRA to a Roth. (Of course, new contributions should definitely be a Roth if you qualify, which was the very beginning paragraph of this thread.)

For instance, if I could pay 25% in taxes now, or possibly 20% in the future, waiting for the future is the way to go. However, I think 25% is near the bottom if not THE bottom of my income tax rate over my working career, so I am looking to convert it this year.

-Agg97
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