3 Steps To Fully Optimize Your Roth Conversion in 2026

Hey, this is Craig Weir. So today we're talking about fully optimizing your Roth conversion this year. And if you're watching this, there's a good chance you've done something right in life. In fact, probably done a lot of financial stuff right in your life. You're in your 60s, your 70s, or maybe your 80s, and you've accumulated at least a million dollars across your IRAs, 401ks, 403s, all those types of accounts. You've probably at least heard about Roth conversions, and maybe you've even done a few or have some really complicated spreadsheets to figure out what you want to get accomplished. But here's what I've learned after help thousands of folks avoid paying over $8 billion to Uncle Sam. While most people understand what a Roth conversion is, very few people fully optimize how they do it, and it costs them hundreds of thousands of dollars. So today I want to walk you through three simple steps to fully optimize your Roth conversions this year. All right, Step one is simple, but it's the one people miss the most. Start earlier than you think. Most people call us in October, November, December, and say, okay, Craig, I think I want to do a Roth conversion this year. What should I do? Well, while we can certainly help them, that's not the best time to be calling us at that point. We're already behind in being able to help them, and here's why. Roth conversions are not something you want to rush at the end of the year. They work best when you give yourself time to think, to plan, and to make good decisions. Why is that? Because when you convert money from an IRA to a Roth, you're creating taxable income. And once December 31 hits, that decision is locked in. So for 2026, the conversion plan really should start early in the year. Starting early gives you flexibility, and it lowers the odds of making a decision that you may regret later. An easy first step to starting early is to calculate your required minimum distributions and understand their tax impact. We actually even have a free calculator that takes 30 seconds to fill out, and it spits out all kinds of helpful information. There's a link below in the description where you can have access to that. The second step is where most of the optimization lives. It's not just how much you convert, it's what you convert first. So let's recap the basics. We have two buckets. Our IRAs and 401ks are money that's taxed later, and it grows. Tax deferred. It has required minimum distributions starting at age 73 and it's taxed when withdrawn. Then we have our Roth bucket. That's money that's tax free forever. No required minimum distributions, no taxes when you take it out. And for many of you, no taxes for your heirs either. Here's the simple rule to remember. Whatever you move into, a Roth gets to grow tax free for the rest of your life. So the obvious question becomes, well, what assets do you want growing tax free for the longest time? Your pre tax money typically falls into three categories. High growth investments, medium growth investments, and you got it, low growth investments. What we generally want to move first are what we call the high flyers or the high growth investments. These are assets you believe have the highest long term growth potential. Stocks, equity funds, bitcoin funds, and other alternative investments. Sometimes even assets that are temporarily down but you believe are going to recover. If something is down 10 or 15% and you think it's going to come back, converting it while it's down can be really powerful over the future. You pay tax on a lower value and then all the recovery happens inside the Roth totally tax free. We also see this with certain real estate investments held inside of IRAs. I understand not everyone has that, but when they do, those assets often out produce many traditional investments. Those are usually strong candidates to move earlier rather than later. What you typically want to save for last are cash money market lower growth bonds. They just don't benefit as much from the tax free growth. Now this doesn't mean you take on more risk. And that leads us directly to the final step. And this is a big one and it really trips people up. When you start moving assets from an IRA to a Roth, your custodian or your advisor will often want to just move everything proportionally. A little bit of everything. And why? Because it keeps the pie charts looking neat. But here's the truth. Those pie charts don't tell the whole story. Individually, your IRA and your Roth might look different, and that's okay. What actually matters is your combined allocation. When you add the IRA and Roth together, your overall risk can stay exactly the same. You're not becoming more aggressive, you're just being more intentional about where growth lives in your portfolio. You don't need to sell positions, you don't need to change advisors. Most assets can be moved in kind, meaning they go from an IRA to the Roth without being sold. This is part of the art of Roth conversion implementation. It's not just math, it's sequencing and it's thinking about the whole picture. Instead of one account at a time and being myopic. And this is exactly where most people get stuck on paper. Roth conversions look simple. You move money from one account to another and you pay some tax. But in real life, this is where the mistakes often happen. Because the difference between a decent Roth conversion and a fully optimized one comes down to whether you have a personalized plan or not. And look, I literally wrote the book on this. But there's no one size fits all solution when it comes to sequencing, timing, asset selection, and how all the pieces fit together across your entire financial picture. That's what we do for people all day, every day. We don't sell financial products. We don't manage your investment accounts. We don't ask you to change advisors. Our job is to sit on top of everything you already have and help you make smarter, more intentional decisions about how and when you move your money. So for people with large IRAs, that guidance can mean hundreds of thousands of dollars of benefit over time, like Susan and John, who we helped avoid 1.2 million in tax payments. So if you're sitting there thinking, I understand Roth conversions, but I'm not totally confident I'm doing this the best way possible, I have a free webinar that will give you a boatload of clarity. You can join at the link below. Because when you've spent decades building this much wealth, I think it's worth taking the time to convert it the right way. So let's recap. Start earlier than you think. Be intentional about what you convert first. Keep your risk the same, and look at the big picture. And if you do these three things, you're already ahead of the vast majority of people doing Roth conversions. But the people leaving their conversion strategy to fiduciaries or young YouTubers or, heaven forbid, AI, are bleeding hundreds of thousands of dollars. Watch this video to understand how a personalized strategy with a Rothologist is the only way to keep your money out of the hands of the government.