Craig Wear, CFP®Craig Wear, CFP® | Expert in Roth Conversions & Tax-Efficient Retirement Strategies for IRA Millionaires

What Assets Should You Roth Convert First

25 Mar 2026 · 1 min

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In this concise advisory segment, Craig Wear, CFP®, explains that the effectiveness of a Roth conversion depends not just on the dollar amount but on which specific assets are converted. He emphasizes that dollars differ in their impact on lifetime taxes based on growth rate, volatility, and their role in broader strategies. Converting an asset pre‑pays tax on its future growth; if the asset grows slowly, the prepaid tax yields little benefit, whereas high‑growth assets left in a pre‑tax account would incur future taxes on substantial gains. Over long horizons, this difference can be massive. Therefore, the key strategy is to intentionally select assets positioned for the strongest long‑term growth and convert those first, allowing their compounding to occur tax‑free within the Roth.

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Even if the amount is perfectly calculated, that doesn't mean you're converting the right dollars. Because not all dollars have the same impact on your lifetime taxes. It depends on how fast they grow, how volatile they are, or whether they're part of another strategy. But once they're converted, their compounding path changes permanently. The moment you convert an asset, you are prepaying tax on its future growth. If that asset barely grows, you prepaid tax on limited upside. But if a high-growth asset remains inside that pre-tax account, well, it's the strongest compounding years may still be exposed to future taxation. And over decades, that difference can become enormous. So Roth conversions aren't just about how much you convert, they're about which dollars you convert. Are you intentionally choosing which investments to convert? If not, look at which holdings are positioned for the strongest long-term growth inside the Roth, convert those first. That way the compounding happens tax-free.