Overview
- Recent coverage advises workers facing a short-lived income spike to shift from Roth to traditional IRA or 401(k) contributions to capture the immediate tax deduction.
- Savers can return to Roth contributions once income falls, using the high-income year primarily to reduce current taxes.
- Higher earners often cannot contribute directly to a Roth IRA, but lower-income gap years before required minimum distributions can offer a window for Roth conversions.
- Roth conversions increase taxable income, which can make more Social Security benefits taxable and trigger Medicare Part B and Part D IRMAA surcharges.
- Context includes 2026 limits of $24,500 for 401(k) contributions and $7,500 for IRAs, plus trade-offs such as 401(k) matching and protections versus IRA flexibility and rollover risks.