Six scenarios can make a Roth conversion backfire for retirees, Schmitz said, especially when paying taxes now is unlikely to beat taxes owed later.
Retirees without pensions or with less than $500,000 in tax-deferred accounts may face low lifetime tax burdens because smaller RMDs and the 2026 standard deduction of up to $32,200 can limit taxable income.
High current earners also risk overpaying by converting in a 32% bracket if retirement could drop them into 22% or 12%, while early retirees may get a better low-income conversion window after work ends.
Legacy and life changes can also shift the math: children in lower tax brackets may be better off inheriting traditional IRA assets, and marriage can open wider joint tax brackets for later conversions.
State taxes add another layer, with moving from high-tax states such as California to no-income-tax states like Florida potentially saving 7% to 10% or tens of thousands of dollars.