Tax Planning Guide | Connecticut 2026

Roth Conversion Strategy for Connecticut Residents: 2026 Guide

A Roth conversion is the process of moving money from a traditional IRA or 401(k) into a Roth IRA, paying income tax now in exchange for tax-free growth and withdrawals later. For Connecticut residents with $1 million or more in retirement savings, timing that conversion correctly may meaningfully reduce lifetime taxes, but the decision involves both federal and state-level considerations that are specific to 2026.

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Reviewed by Brian Skinner, CFP®, CRPC® | Skinner Wealth Strategies | Milford, CT

What You Will Learn

How to Use This Guide

This guide is organized around the three most common questions Connecticut residents ask about Roth conversions. Each section provides a direct answer, followed by the context you need to apply it to your own situation. A CT-specific section covers how Connecticut taxes conversions in 2026, including the state's pension and retirement income tax phase-out that may affect your planning window.

The strategies discussed here are most relevant to pre-retirees and retirees aged 50 and older who have accumulated $1 million or more in tax-deferred accounts and are looking to manage their tax burden across retirement. Individual circumstances vary significantly, and the right approach depends on your income, projected tax rates, and timeline.

Sections in This Guide

1 Can I still do a Roth conversion for 2026?
2 At what age do Roth conversions no longer make sense?
3 Who should not do a Roth conversion?
4 How Connecticut taxes Roth conversions in 2026
5 Good vs. poor Roth conversion candidates (comparison table)

Question 1

Can I Still Do a Roth Conversion for 2026?

Yes. You can complete a Roth conversion for the 2026 tax year at any point between January 1 and December 31, 2026. Unlike IRA contributions, Roth conversions are not available after year-end and cannot be applied to a prior tax year. The deadline is the last business day of the calendar year, and the conversion must be processed and settled by your financial institution before midnight on December 31, 2026.

No Income Limit to Convert

There is no income threshold that prevents a Roth conversion. Anyone with a traditional IRA or eligible pre-tax retirement account may convert, regardless of income. This is distinct from making a direct Roth IRA contribution, which does have income phase-out limits.

Any Amount Can Be Converted

You are not required to convert an entire account. Partial conversions are common and are often the most tax-efficient approach, converting only enough to fill the top of a lower tax bracket. The converted amount is added to your ordinary income for the year it is processed.

RMDs Cannot Be Converted

If you are age 73 or older and subject to Required Minimum Distributions, your RMD for the year must be satisfied before any conversion takes place. The RMD itself cannot be converted to a Roth IRA. This is a critical sequencing rule for older account holders.

The 2026 Planning Window: Why This Year Matters

The current federal income tax rates, established by the Tax Cuts and Jobs Act of 2017, are scheduled to sunset after December 31, 2025. However, through legislative action, the Tax Cuts and Jobs Act rates were extended for the 2026 tax year and beyond. As of the current legislative landscape in 2026, the lower rate environment remains in place. For Connecticut residents in the pre-retirement window (ages 55 to 70), this may represent a meaningful opportunity to convert at rates that could be less favorable in future years if tax policy changes. That said, tax law is subject to change, and any conversion strategy should be reviewed with a qualified financial planner who can model your specific scenario. Converting too aggressively can push you into a higher bracket or trigger unintended consequences such as Medicare premium surcharges, so sizing matters.

Question 2

At What Age Do Roth Conversions No Longer Make Sense?

There is no single age at which Roth conversions categorically stop making sense, but the math generally becomes less favorable after age 73 to 75 for most people. The core logic of a Roth conversion is that you pay tax now and benefit later through tax-free growth and withdrawals. If your time horizon is too short, the future tax savings may not outweigh the upfront tax cost.

The Break-Even Horizon

Financial planners typically use a break-even analysis to assess whether a conversion is worth it at any given age. The break-even period is the number of years it takes for the tax savings on future withdrawals to exceed the tax paid at conversion. Depending on tax rates and account growth assumptions, this break-even window is commonly estimated at seven to fifteen years, though individual results vary considerably. A 68-year-old in good health with a family history of longevity and large pre-tax IRA balances is in a very different position than a 78-year-old who expects to draw down the account quickly.

Age is one factor in the equation, but it is not the only one. Tax brackets, current income sources, legacy goals, state residency, and Medicare Part B premium thresholds all influence whether a conversion makes sense regardless of age. A 75-year-old with heirs in high tax brackets, for example, may still find a modest conversion worthwhile as a wealth-transfer strategy.

Age Milestones to Know

Before Age 73

Generally the most favorable conversion window. RMDs have not yet begun, income may be in a lower bracket between retirement and Social Security claiming, and there is more time for tax-free growth to compound.

Ages 73 to 75

RMDs begin, reducing the available conversion amount. Conversions are still viable but require careful coordination: the RMD must be taken first, and the conversion size must be modeled against IRMAA thresholds and state tax rules.

After Age 75

Conversions become harder to justify on a personal-use basis for most individuals, though they may still serve legacy or estate-planning objectives. Factors to weigh include the projected benefit to heirs, estate size, and the anticipated tax rate of beneficiaries.

Question 3

Who Should Not Do a Roth Conversion?

A Roth conversion is not the right strategy for everyone. Converting creates taxable income in the year the conversion is processed, and that added income can trigger higher tax rates, reduce means-tested benefits, or leave you without the liquidity to pay the resulting tax bill without drawing from the account itself. Understanding who should avoid a conversion is as important as understanding who should pursue one.

Profile	Good Conversion Candidate	Poor Conversion Candidate
Current vs. Future Tax Rate	Currently in a lower bracket; expects higher bracket in retirement or when RMDs begin	Currently in a higher bracket than expected in retirement; converting would increase lifetime taxes
Time Horizon	10 or more years for tax-free growth to compound and reach break-even on taxes paid	Short time horizon; upfront tax cost likely exceeds the benefit of future tax-free withdrawals
Liquidity to Pay Tax	Has sufficient non-retirement funds available to pay the conversion tax without touching the IRA	Would need to use IRA funds to pay the tax bill, reducing the converted balance and eroding the benefit
Medicare Premiums (IRMAA)	Conversion amount can be sized to stay below IRMAA income thresholds (currently $109,000 single / $218,000 MFJ for 2026, per CMS)	Conversion would push MAGI above IRMAA thresholds, triggering significantly higher Medicare Part B and D premiums
RMD Pressure	Large pre-tax balances create future RMD pressure; converting now reduces the amount subject to mandatory withdrawals	Already taking RMDs that are largely spent on living expenses; additional conversion income is purely additive tax burden
Estate and Legacy Goals	Heirs are likely to inherit funds and face income tax on distributions; converting leaves a tax-free asset	Account is expected to be fully spent during lifetime; no legacy benefit justifies the upfront tax cost
Connecticut Tax Situation	Below CT's retirement income exemption thresholds; state tax on conversion income may be minimal	Income from conversion would exceed CT exemption thresholds, adding state tax on top of federal liability

This table is for illustrative purposes only. Individual situations vary. Work with a qualified financial planner to model your specific circumstances before converting.

Connecticut-Specific Guidance

How Connecticut Taxes Roth Conversions in 2026

Connecticut does not offer a blanket exclusion for Roth conversion income. The amount you convert from a traditional IRA is treated as ordinary income for Connecticut state income tax purposes in the year of conversion, subject to the same graduated rate structure that applies to other income. Connecticut's top marginal income tax rate as of 2026 is 6.99% for taxable income above $500,000 (single) or $600,000 (married filing jointly), with lower rates applying to income in the lower brackets. For most pre-retirees doing partial annual conversions, the relevant rate is typically in the 5% to 6.5% range depending on total household income.

The CT Pension and Retirement Income Exemption

Connecticut has been phasing in a retirement income exemption that provides meaningful relief for retirees. For 2026, Connecticut exempts a portion of pension, annuity, and Social Security income for taxpayers who meet income thresholds. However, the exemption structure applies to qualifying retirement income distributions, not to Roth conversion income. A Roth conversion is not a distribution from the account in the traditional sense; it is a taxable event triggered by a transfer between account types, and Connecticut taxes it as ordinary income.

Critically, adding Roth conversion income to your Connecticut adjusted gross income could push your total income above the thresholds that determine your eligibility for the retirement income exemption itself. Connecticut's exemption phases out as income rises, meaning a large conversion could inadvertently reduce or eliminate the state tax relief you would otherwise receive on your pension, Social Security, or annuity income. This interaction is one of the most underappreciated planning nuances for Connecticut retirees and makes sizing your conversion carefully particularly important.

Key CT Tax Considerations at a Glance

1 Roth conversion income is fully taxable in Connecticut as ordinary income in the year converted.
2 Connecticut's top income tax rate is 6.99% in 2026; most pre-retirees converting partial amounts will face rates between 5% and 6.5%.
3 A large conversion can push total income above the thresholds for CT's retirement income exemption, increasing your overall CT tax burden.
4 The 183-day residency rule: if you are planning to move out of Connecticut in retirement, conversions made while still a CT resident will be taxed by Connecticut. Conversely, converting after establishing residency in a no-income-tax state (such as Florida) avoids state tax on the conversion entirely.

Planning Note: CT Residency and Conversion Timing

Connecticut uses a 183-day test for domicile determination. Taxpayers who spend more than 183 days in Connecticut during a tax year and maintain a permanent place of abode here are considered CT residents and owe state income tax on all income, including Roth conversions. If you are considering relocating in retirement and are weighing whether to convert before or after you move, the state you reside in during the calendar year the conversion settles is the state that taxes it. This is a scenario worth modeling carefully with your financial planner and a tax professional before executing a large conversion.

Common Mistakes

Roth Conversion Mistakes to Avoid

The most common Roth conversion errors are not strategic misjudgments — they are sizing and sequencing mistakes that could have been caught with proper planning.

Converting Too Much in One Year

A conversion that pushes income into the next tax bracket or past IRMAA thresholds can cost more in taxes than the long-term benefit justifies. Partial, annual conversions spread over several years are often more efficient than a single large conversion.

Paying the Tax From the IRA

Withholding taxes from the converted amount reduces the balance that enters the Roth and diminishes the long-term benefit. If you are under age 59.5, the withheld portion may also be subject to a 10% early distribution penalty. Paying conversion taxes from taxable savings preserves the full converted amount.

Ignoring the CT Pension Exemption Interaction

As described above, adding conversion income to your CT AGI can reduce your eligibility for Connecticut's retirement income exemption on other income sources. This is a state-specific risk that generic national planning guides often overlook entirely.

Converting in a High-Income Year

A year with a large severance payment, business sale, or capital gain distribution is rarely the right time to layer a Roth conversion on top. Conversions are most efficient in lower-income years, such as the gap between retirement and Social Security or RMD onset.

Overlooking the Five-Year Rule

Each Roth conversion starts its own five-year clock for penalty-free access to converted principal if you are under age 59.5. For those approaching retirement, this is less commonly a concern, but it is a factor to understand if you are converting while still working and may need access to funds before the holding period expires.

Not Revisiting the Strategy Annually

A conversion plan is not a one-time decision. Tax law, income levels, account balances, and health all change. An annual review with your financial planner allows you to adjust the conversion amount to the most efficient level each year rather than following an outdated plan.

About the Author

Reviewed by Brian Skinner, CFP®, CRPC®

Brian Skinner is a Certified Financial Planner (CFP®) and Chartered Retirement Planning Counselor (CRPC®) based in Milford, Connecticut. He specializes in tax-sensitive retirement and income distribution planning for individuals and families aged 50 and older with $1 million or more in retirement savings, helping them navigate the transition from saving for retirement to spending in retirement.

Roth conversion strategy is a core component of the integrated planning approach at Skinner Wealth Strategies, where tax planning, investment management, and income distribution are treated as interconnected decisions rather than separate functions. Brian teaches retirement planning classes across Connecticut communities and brings that same plain-language approach to every client engagement.

The tax strategies discussed on this page reflect the types of planning considerations that Brian and the team work through with clients each year, but individual results depend on each person's income, tax situation, account structure, and goals. This page is educational and does not constitute personalized financial or tax advice.

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Credentials and Recognition

CFP® Certified Financial Planner CRPC® Chartered Retirement Planning Counselor

Skinner Wealth Strategies serves pre-retirees and retirees throughout Fairfield County and Connecticut, with offices in Milford and West Hartford. The firm operates as a fiduciary, meaning the team is obligated to act in the client's best interest at all times.

Frequently Asked Questions

Roth Conversion Questions: Connecticut Residents

Is Connecticut a tax-friendly state for retirees who do Roth conversions?

Connecticut has improved its retirement tax picture in recent years through a phased exemption on pension, Social Security, and annuity income. However, Roth conversion income does not qualify for those exemptions and is taxed as ordinary income by the state. CT is generally considered moderately tax-friendly for retirees on their ongoing distributions, but conversion income adds a state tax cost that is absent in states like Florida or Texas. Factoring in state taxes when sizing conversions is essential for Connecticut residents.

What is the new CT retirement income tax law for 2026?

Connecticut has been expanding its retirement income exemption over several years. As of 2026, qualifying retirement income (including Social Security, pension, and annuity distributions) is eligible for an exemption for taxpayers whose Connecticut adjusted gross income falls within the applicable thresholds. The specific thresholds and exemption amounts are defined in Connecticut's annual tax guidance. Because the exemption phases out at higher income levels, large Roth conversions can inadvertently exceed those thresholds and increase your effective CT tax burden. Consult with a Connecticut-based financial planner or CPA for guidance specific to your situation.

What is the biggest Roth conversion mistake?

The most common mistake is converting too large an amount in a single year without accounting for the cumulative effect on tax bracket, Medicare premiums, and state tax exemption eligibility. A conversion that looks efficient in isolation may trigger IRMAA surcharges on Medicare premiums two years later, push you out of CT's retirement income exemption range, or cause Social Security benefits to become more heavily taxed. Sizing each year's conversion to stay within a specific income ceiling is the cornerstone of an effective multi-year strategy.

Can I do a Roth conversion if I am still working?

Yes. Being employed does not prevent a Roth conversion from a traditional IRA. However, if you are still working, your employment income will be added to the conversion income when calculating your tax liability, which often means a larger portion of the conversion is taxed at a higher rate. For many working individuals, the most efficient conversion window opens after they stop working but before Social Security, pension income, or RMDs begin adding to their taxable income. That gap period, which may span from age 60 to 73 for some people, is often where conversions deliver the most value.

Does a Roth conversion affect my Social Security benefits?

A Roth conversion does not change the amount of your Social Security benefit, but it does affect how much of that benefit may be subject to federal income tax. Social Security benefit taxation is based on "combined income," which includes adjusted gross income plus non-taxable interest plus half of Social Security benefits. Adding conversion income raises your combined income and can cause a greater portion of your Social Security benefit — up to 85% — to become taxable. This interaction is another reason why conversion sizing and annual income modeling are essential components of a sound strategy.

Related Resources

Continue Your Tax Planning Research

Roth conversion decisions don't exist in isolation. These related pages cover the planning areas that interact most directly with your conversion strategy.

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