Tax Planning for Connecticut Retirees
Roth Conversion Guide for Connecticut Retirees
A Roth conversion may allow Connecticut retirees to reduce lifetime taxes by moving pre-tax retirement savings into a tax-free Roth account. Whether it makes sense for you depends on your income, Connecticut's evolving pension tax rules, and where federal tax rates are headed in 2026 and beyond. This guide answers the most common questions — in plain language.
Brian Skinner CFP®, CRPC® serves pre-retirees and retirees across Connecticut
Quick Answer
Should Connecticut Retirees Do a Roth Conversion in 2026?
A Roth conversion may benefit Connecticut retirees in 2026 if they are in a temporarily lower tax bracket — such as during the gap between retirement and age 73 when required minimum distributions (RMDs) begin. Connecticut is actively phasing out its state income tax on pension and retirement income, which may reduce your CT tax burden on converted amounts over the next several years. At the federal level, several individual income tax provisions are scheduled to change after 2025, which may affect the long-term value of converting now. The decision depends on your current income, projected future income, account balances, and estate goals. A Roth conversion is not right for everyone — it creates taxable income in the year of conversion, which may affect Medicare premiums, Social Security taxation, and other income-based thresholds.
Guidance provided by Brian Skinner, CFP®, CRPC® — Skinner Wealth Strategies, Milford and West Hartford, CT.
The Basics
What Is a Roth Conversion?
A Roth conversion is the process of moving money from a traditional IRA, 401(k), or other pre-tax retirement account into a Roth IRA. The converted amount is added to your taxable income in the year of the conversion. Going forward, that money grows tax-free and qualified withdrawals in retirement are not subject to federal income tax.
Unlike a Roth IRA contribution — which has income limits — anyone may do a Roth conversion regardless of income. There is no annual dollar cap on the amount you convert, though the tax impact of large conversions must be managed carefully.
According to the IRS, Roth IRA distributions that meet the qualified distribution rules (account held at least five years, and the account owner is age 59½ or older) are excluded from gross income. This is the core tax advantage the strategy is designed to capture.
Key Terms
Pre-Tax Account
Traditional IRA or 401(k) funded with dollars that have not yet been taxed. Withdrawals are taxed as ordinary income.
Roth IRA
Funded with after-tax dollars. Qualified withdrawals are federal income tax-free, and Roth IRAs are not subject to RMDs during the owner's lifetime.
Conversion Tax
The converted amount is taxable as ordinary income in the year of the conversion at both the federal and Connecticut state level, subject to applicable exemptions.
Five-Year Rule
Each conversion starts a new five-year clock. Withdrawals of converted amounts before five years may be subject to a 10% penalty if you are under age 59½.
Connecticut-Specific Context
How Connecticut Taxes Retirement Income in 2026
Connecticut's treatment of retirement income is changing — and those changes directly affect whether and how much to convert.
Pension Tax Phase-Out
Connecticut is in the process of phasing out its state income tax on pension and annuity income for qualifying residents. As of 2026, taxpayers with income below certain thresholds may exclude a meaningful portion of pension income from Connecticut adjusted gross income. This phase-out may reduce the CT state tax cost of Roth conversions for eligible retirees in lower income tiers.
Social Security in CT
Connecticut exempts Social Security benefits from state income tax for single filers with Connecticut AGI below approximately $75,000, and for joint filers below approximately $100,000, as of 2026. A Roth conversion that pushes income above these thresholds may cause previously exempt Social Security income to become taxable at the state level — a factor that should be modeled before converting.
CT Income Tax Rates
Connecticut's income tax rates range from 2% to 6.99% as of 2026, depending on filing status and taxable income. A Roth conversion adds to your Connecticut taxable income in the year of conversion, potentially pushing income into a higher CT bracket. Planning the size of annual conversions is often as important as deciding whether to convert at all.
Important Note on 2026 Federal Tax Law
Several individual income tax provisions from the Tax Cuts and Jobs Act of 2017 were originally scheduled to sunset after 2025. Legislation passed in 2025 extended or made permanent certain provisions, while others were modified. The current federal rate environment and bracket structure for 2026 should be reviewed with a qualified tax professional before making conversion decisions. Tax law may continue to change, and projections made today carry uncertainty.
Strategy
When a Roth Conversion May Make Sense for CT Retirees
Not every retiree benefits from a Roth conversion. These are the circumstances where a conversion strategy most commonly makes sense — and the tradeoffs to weigh alongside each one.
You Are in the "Retirement Gap"
The period between retirement and age 73 — before RMDs begin — often represents your lowest-income years. Converting in this window may allow you to fill lower tax brackets at a reduced cost, though the tax impact depends on your total income picture including Social Security, pensions, and investment income.
You Have a Large Pre-Tax Balance
Large traditional IRA or 401(k) balances will generate substantial RMDs at age 73, which are fully taxable and can push you into higher brackets. Gradually converting a portion of those assets over several years may reduce your future RMD burden, though each conversion adds to taxable income in the conversion year.
You Expect Higher Taxes in the Future
If you believe your income — or federal and CT state tax rates — may be higher in future years, converting at today's rates may reduce your lifetime tax burden. This is a projection, not a certainty, and should be weighed against the upfront tax cost of converting now.
Estate Planning Goals
Roth IRAs pass to heirs free of income tax and are not subject to RMDs during the original owner's lifetime. For Connecticut retirees with estate planning objectives, a Roth conversion may reduce the tax burden on beneficiaries — particularly under SECURE 2.0's 10-year distribution rule for inherited IRAs.
You Can Pay the Tax from Outside the IRA
A Roth conversion works most favorably when you have non-retirement funds available to pay the tax on the converted amount. Using IRA funds to pay the tax reduces the amount that compounds tax-free and may trigger additional penalties if you are under age 59½.
Partial, Annual Conversions
Converting a smaller amount each year — rather than one large conversion — allows you to stay within a target tax bracket, avoid Medicare IRMAA surcharges, and preserve Connecticut-specific income thresholds. A multi-year conversion strategy requires ongoing coordination with your tax situation each year.
Know the Tradeoffs
Who Shouldn't Do a Roth Conversion?
A Roth conversion is not universally beneficial. Several situations make a conversion less likely to help — and potentially harmful to your overall retirement plan.
Brian Skinner, CFP®, CRPC®, works with Connecticut retirees to evaluate whether the math and the timing of a conversion align with their specific tax situation before recommending one. Every conversion decision involves trade-offs that should be modeled with your actual numbers.
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X
You Are in a High Bracket Now
If your current income is high — from wages, consulting, large RMDs, or a pension — converting now likely means paying tax at a rate equal to or higher than what you would owe in retirement.
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You Need the Funds Soon
A Roth conversion requires a multi-year time horizon to recoup the upfront tax cost. If you anticipate needing to draw on those funds within a few years, the breakeven may not be reached.
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A Conversion Would Trigger IRMAA
Medicare's Income-Related Monthly Adjustment Amount (IRMAA) increases Part B and Part D premiums for beneficiaries whose modified adjusted gross income exceeds certain thresholds. A Roth conversion can push income above an IRMAA tier two years later, adding hundreds or thousands of dollars in annual premiums.
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You Plan to Leave Assets to Charity
Charitable organizations are tax-exempt, so they receive inherited pre-tax IRA distributions without owing income tax. Converting those assets to Roth first would generate taxable income for you without providing any additional tax benefit to the charitable beneficiary.
Side-by-Side Comparison
Traditional IRA vs. Roth IRA: What Changes After a Conversion
Understanding the structural differences helps clarify why timing and sizing matter so much.
| Feature | Traditional IRA / 401(k) | Roth IRA (After Conversion) |
|---|---|---|
| Contributions taxed? | No (pre-tax) | Yes — taxed at conversion |
| Withdrawals taxed? | Yes, as ordinary income | No, if qualified distribution |
| Required Minimum Distributions | Begin at age 73 | None during owner's lifetime |
| Connecticut state tax on withdrawals | Generally taxable as income | Generally exempt if qualified |
| Impact on Medicare IRMAA | RMDs count toward MAGI | Qualified withdrawals do not count |
| Impact on Social Security taxation | Withdrawals count toward provisional income | Qualified withdrawals generally excluded |
| Inheritance tax efficiency | Heirs pay income tax on distributions | Heirs receive tax-free (if qualified) |
Tax treatment may vary based on individual circumstances, account holding periods, and applicable state and federal law as of 2026. Consult a qualified tax advisor for guidance specific to your situation.
Frequently Asked Questions
Roth Conversion Questions Connecticut Retirees Are Asking
These are the most common questions about Roth conversions as they apply to Connecticut residents — answered directly.
Is Connecticut phasing out tax on pensions?
Yes. Connecticut has been phasing out its state income tax on pension and annuity income for qualifying taxpayers. For 2026, eligible retirees below certain income thresholds may exclude a portion of pension income from Connecticut adjusted gross income. The exemption applies to income from Connecticut-defined benefit plans and certain other retirement income sources, subject to income limits that vary by filing status. This phase-out may reduce the state tax cost of Roth conversions for some retirees — but only for those whose total income falls within the qualifying thresholds. Income above those thresholds may still be subject to Connecticut tax, and a conversion that pushes income over a threshold could reduce or eliminate an exemption you would otherwise receive.
Does Connecticut tax Roth IRA distributions?
Qualified Roth IRA distributions — those taken after the account has been held for at least five years and the account owner is age 59½ or older — are generally not subject to Connecticut income tax. This is consistent with their treatment at the federal level. However, the conversion itself, which generates taxable income in the year it occurs, is subject to Connecticut income tax (less any applicable exemptions) in that same year. Planning the timing and size of conversions with both federal and CT tax consequences in mind is important.
What are the tax changes for Connecticut in 2026?
Connecticut's income tax structure in 2026 reflects continued implementation of the pension income phase-out, marginal rates ranging from 2% to 6.99%, and Social Security exemption thresholds that differ from the federal structure. At the federal level, 2026 is the first full tax year under the legislative changes enacted in 2025 that addressed expiring Tax Cuts and Jobs Act provisions. Taxpayers should review their specific situation with a qualified tax professional, as the interaction between federal and Connecticut income rules — particularly around retirement income — can be complex.
At what age do Roth conversions no longer make sense?
There is no age at which a Roth conversion automatically stops making sense — but the math shifts meaningfully as you age. The primary factor is the breakeven period: how many years it takes for the tax-free growth in the Roth to offset the tax you paid at conversion. The shorter your remaining time horizon, the harder it is for the strategy to pay off for you personally. That said, conversions at older ages may still make sense for estate planning purposes, if your goal is to leave a tax-free inheritance to beneficiaries. A 70-year-old converting to benefit a child or grandchild who has decades ahead of them may still find the strategy worthwhile. Each situation should be evaluated individually, and decisions made based on your own health, income, and legacy goals.
Should a 70-year-old do a Roth conversion?
It depends. At age 70, you are approaching the RMD start age of 73, which means your pre-tax accounts will soon generate mandatory taxable income. Converting before RMDs begin — even partially — may reduce future RMD amounts and help manage your tax bracket in later years. However, at 70 you are also approaching Medicare enrollment age if not already enrolled, and a conversion may trigger or worsen IRMAA surcharges. A conversion at 70 can make sense for retirees with significant pre-tax balances, a desire to reduce future RMDs, or legacy goals — but the case is strongest when your current income is temporarily low and you have sufficient assets outside the IRA to pay the conversion tax.
Which states do not tax Roth conversions?
As of 2026, states with no income tax — including Florida, Texas, Nevada, Washington, Wyoming, South Dakota, and Alaska — do not impose state income tax on Roth conversions. New Hampshire taxes only interest and dividend income, not IRA distributions. Connecticut does tax Roth conversion income in the year of the conversion, subject to available exemptions. Some Connecticut retirees explore whether relocating to a no-income-tax state before completing a large conversion could reduce their overall tax cost. This is a legitimate planning consideration, though it involves significant personal and financial decisions well beyond the tax question alone.
What is the biggest Roth conversion mistake?
Converting too much in a single year is the most common and costly Roth conversion mistake. A large conversion can push your income into a higher federal bracket, trigger Connecticut's higher marginal rates, cause Social Security benefits to become partially taxable at the state level, and activate Medicare IRMAA surcharges two years later. The second most common mistake is paying the conversion tax using funds from the IRA itself — which reduces the amount compounding tax-free and may generate additional penalties for those under age 59½. A disciplined, multi-year partial conversion strategy — sized to your specific tax situation each year — is generally more effective than a single large conversion.
Can I still do a Roth conversion for 2026?
Yes. Roth conversions for the 2026 tax year may be completed at any point during the 2026 calendar year — from January 1 through December 31, 2026. Unlike IRA contributions, which can be made up to the tax filing deadline of the following year, a Roth conversion must be completed within the calendar year for which it is to be reported. If you are considering a 2026 conversion, the remaining months of the year provide the opportunity to model your income, assess your bracket, and determine an appropriate conversion amount before year-end.
About the Author
Guidance from 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 — including Roth conversion strategy as part of an integrated retirement income plan.
Brian teaches retirement planning and tax strategy classes across Connecticut communities and works with clients in Milford, West Hartford, Fairfield County, and the broader state. His approach connects investment management, tax planning, and income distribution into one coordinated strategy — because decisions made in one area nearly always affect the others.
Roth conversion decisions are rarely standalone calculations. They intersect with Social Security timing, Medicare premiums, RMD management, Connecticut pension tax rules, and estate goals — all of which Brian reviews as part of a comprehensive retirement plan.
Roth Conversion as Part of a Broader Plan
Topics Coordinated in Every Conversion Analysis
Ready to Explore Your Options?
Talk to a Connecticut CFP About Your Roth Conversion Strategy
Every Roth conversion decision is unique. Brian Skinner, CFP®, CRPC® works with Connecticut retirees and pre-retirees to evaluate whether a conversion fits their tax situation, income plan, and long-term goals — with no cookie-cutter answers and no jargon. Results vary by individual circumstances and tax situation, and Roth conversions involve trade-offs that should be evaluated with qualified guidance.
Skinner Wealth Strategies serves Connecticut retirees and pre-retirees from offices in Milford and West Hartford, CT.