Roth accounts can be a key feature of retirement planning for many of your clients—especially in our current lower-tax environment. Here are nine reasons to examine the advantages of Roth accounts.
Despite the sweeping tax reforms introduced by the One Big Beautiful Bill Act (OBBBA), Roth IRAs remain a cornerstone of smart retirement and legacy planning.
For financial advisors helping clients navigate today’s complex tax landscape, Roth conversions continue to offer powerful planning advantages, particularly for high-net-worth individuals, retirees, and women managing life transitions.
Below are nine strategic reasons why Roth accounts still make sense, even post-OBBBA, and how thoughtful planning can enhance both long-term financial security and intergenerational wealth transfer.
1. Reduce Required Minimum Distributions later in retirement
Traditional IRAs/401(k)s require mandatory withdrawals starting at age 73 (or 75 if born in 1960 or later). By converting to a Roth IRA before Required Minimum Distributions (RMDs) begin, you help to lower your client’s tax-deferred account balance, resulting in smaller RMDs and reduced taxable income in retirement.
With the passing of the OBBBA, keeping taxable income low in retirement is more important than ever as income will directly affect increased tax deductions such as the enhanced senior deduction and SALT deduction.
Remember that the enhanced senior deduction phases out at a 6% rate for individual incomes over $75,000 or joint incomes over $150,000 (fully eliminated at $175,000/$250,000) and the increased SALT deduction of $40,000 phases out for taxpayers with modified adjusted gross income (MAGI) exceeding $500,000 (fully reverting to $10,000 at MAGI of $600,000).
Since Roth IRAs are not subject to RMDs during your client’s lifetime, this strategy gives them more control over their future tax exposure and can also help avoid higher Medicare premiums and Social Security taxation.
2. Take advantage of low-income years (early retirement window)
Many retirees experience a gap between when they stop working and when they begin collecting Social Security or pension benefits, a period we call the “Income Valley,” which is often marked by significantly lower taxable income.
This creates an ideal window to convert traditional IRA/401(k) funds to a Roth IRA at lower tax rates.
Strategic conversions during this period can reduce the lifetime tax burden, lower future RMDs, and create a more flexible, tax-efficient income stream in retirement.
3. Tax-free growth and withdrawals
Once funds are in a Roth IRA, all earnings grow tax-free and can be withdrawn tax-free in retirement (if over age 59½ and the Roth account has been open for at least five years).
This provides greater control over taxable income, helps manage tax brackets, and reduces the impact on Medicare premiums and Social Security taxation.
Plus, Roth IRAs are not subject to RMDs, allowing your client’s money to keep growing tax-free for longer or be passed on more efficiently to heirs.
4. Minimize Medicare premiums and taxation of Social Security
High RMDs due to large tax-deferred account balances in retirement can increase reported income, which can raise Medicare Part B and D premiums and increase the portion of Social Security that is taxed.
Roth conversions help reduce tax-deferred balances and future income, thus minimizing these additional taxes.
5. Optimize taxes for widowed spouse
When one spouse passes away, the surviving spouse transitions from the more favorable married tax brackets to the more compressed single filer tax brackets, yet they are still responsible for taking RMDs from both spouses’ retirement accounts.
This often results in a similar level of taxable income but taxed at a higher rate. While the OBBBA extends the favorable Tax Cuts and Jobs Act tax rates for individuals, it maintains the same compressed structure for single filers, making Roth conversions while both spouses are alive especially compelling.
By converting during the married-filing years, future RMDs can be reduced and help protect the surviving spouse from the financial strain of higher taxes in widowhood.
6. Boost lifetime spending or increase size of your client’s estate
Modeling done with financial planning software helps demonstrate how strategic Roth conversions can increase total lifetime spending by reducing taxes or enhancing estate value.
Using specialized retirement planning software, a scenario was modeled for an individual with $1.25 million in a tax-deferred IRA, $1.25 million in savings, and future income of $59,000 from Social Security and a $45,000 private pension beginning at age 70:
Scenario 1: Converting approximately 90% of the IRA to a Roth over eight years increased projected lifetime spending by $170,000, due to lower federal and state taxes, reduced Medicare premiums, and less taxation on Social Security benefits.
Scenario 2 focused on leaving a larger inheritance, fully converting the IRA over six years increased the projected estate at age 100 by $274,000 in today’s dollars.
7. Leave a larger tax-optimized inheritance
Roth conversions allow clients to pay income taxes now, at potentially lower rates, so their heirs will not have to later.
This strategy can significantly increase the after-tax value of the inheritance they leave behind. This is because under the SECURE Act, most non-spouse beneficiaries must withdraw all inherited retirement assets within 10 years. If those assets are held in a traditional IRA, the beneficiary must also take RMDs during the 10-year period and the withdrawals are taxed at their ordinary income tax rate, potentially pushing them into higher tax brackets.
However, inherited Roth IRAs are not subject to RMDs and can be withdrawn tax-free over the 10-year period, offering far greater flexibility and efficiency.
By converting to Roth during your client’s lifetime, they are essentially gifting their heirs a tax-free inheritance.
8. Reduce the size of your client’s taxable estate
Roth conversions help reduce the size of your client’s taxable estate by requiring them to pay income taxes on the conversion during their lifetime. This is because the income taxes paid at the time of conversion are removed from their estate, potentially reducing estate taxes in high-value estates.
Although the OBBBA increased the federal lifetime exclusion to $15 million per person starting in 2026, 12 states (plus the District of Columbia) still impose their own estate tax, while six states levy inheritance tax (and Maryland imposes both types).
9. Hedge against tax risk
Taxes are historically low and are likely to increase in the future. By converting tax-deferred assets to a Roth IRA now, your clients can lock in today’s relatively low tax rates and insulate more of their wealth from future tax hikes.
Roth IRAs also eliminate RMDs, allowing your client’s money to grow undisturbed, serving as a proactive hedge against the risk of rising taxes and a changing legislative environment.
In today’s dynamic tax and policy environment, Roth IRAs remain a highly strategic planning tool. As advisors, we have a duty to educate clients on opportunities that offer flexibility, control, and long-term tax efficiency.
From minimizing RMDs and Medicare surcharges to optimizing legacy plans, Roth conversions provide unique value across life stages. With thoughtful analysis and a proactive approach, advisors can guide clients in leveraging Roth accounts to protect and grow their wealth, no matter what Washington does next.
