'My Retired Friends Say I'm A Fool For Converting My Traditional IRAs To A Roth' — Suze Orman's Reply May Surprise You

Converting a traditional IRA to a Roth IRA is often presented as a smart move — especially if you expect your taxes to go up later. But as one 77-year-old listener named Lily recently found out, not everyone agrees. And even Suze Orman, a longtime advocate of Roth IRAs, may surprise some fans with her take on the matter.

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The Common Assumption: Lower Taxes in Retirement

Lily wrote into Orman's "Women & Money" podcast with a question that many retirees might relate to. Her friends, also in their late 60s and early 70s, had warned her that converting her traditional IRA to a Roth was a mistake.

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Their reasoning? "Let our adult kids pay the taxes," Lily quoted them as saying. They believed they'd be in a lower tax bracket in retirement — but as Lily discovered, that assumption didn't hold up.

"We’re in a much higher tax bracket than when we were younger," she said.

Orman jumped in immediately, calling that the most important point. "If you buy this myth that when you get older, you’re going to be in a lower tax bracket, I’ve got a bridge to sell you," she said. 

Given the national debt and future tax uncertainty, Orman has long encouraged Roth conversions to lock in today's tax rates.

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Why Orman Says "Not Now" for Lily

Still, Orman's advice took a turn.

Despite her general support for Roth IRAs, she advised Lily not to continue converting her remaining $500,000 in traditional IRA funds.

At age 77, Lily is already in a high tax bracket — 30%. Converting more would push her even higher, resulting in a larger tax bill today without enough time to make up for it through future growth.

"The only people that will not benefit from you converting now will be your kids," Orman said. And in this case, Lily's four children are in the 12% to 22% tax brackets — lower than Lily's.

From a tax-planning perspective, Orman says it makes more sense for Lily to keep her funds in the traditional IRA and allow her children to inherit it. While they'll owe income taxes when they withdraw the money, they'll likely pay less overall than Lily would pay now by converting.

What Lily And Others Can Do Instead

Instead of converting more to a Roth, Orman advised Lily to focus on living off the distributions she already needs to take from her traditional IRA. She also suggested using income from other investments to cover living expenses, if possible.

For retirees in a similar position — already in a high tax bracket and nearing or past age 70 — it may not make financial sense to pursue large Roth conversions.

Instead, smaller strategic withdrawals, timing, and estate planning may offer better outcomes for both the retiree and their heirs.

The Bottom Line

While Roth IRAs remain a powerful tool, they're not one-size-fits-all. As Orman made clear, age, tax bracket, and legacy goals all matter. For Lily, the best move might be to leave things as they are — and trust that her kids will be okay paying a little tax down the road.

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