Key Takeaways
- A widowed caller on The Ramsey Show asked about converting a little over $700,000 in a traditional IRA to a Roth, and Dave Ramsey estimated the tax on converting it all at once at $210,000 to $220,000.
- Under 2026’s federal brackets, a single filer with no other income would owe $209,000 to convert $700,000 in one year, most of it at 35% and 37%.
- Converting $100,000 a year for seven years keeps every dollar at 22% or below, for $92,190 in federal tax. That’s $116,810 less.
- A paycheck fills the low brackets first. A widow who’s still working may have her cheapest room to convert on the joint return she can file for the year her spouse died.
If you’ve lost a spouse and have money in a traditional IRA, I have news that could be worth six figures to you, and it comes down to how fast you convert it to a Roth. A caller to The Ramsey Show asked about exactly that this week.
Ramsey’s $210,000 answer
On the Nov. 5 episode of The Ramsey Show, a 63-year-old caller told host Dave Ramsey that her husband of 41 years had died. She had been his caregiver for 14 of those years. On one paycheck, she said, “I was able to amass a little over $700,000 in traditional IRA.” She still works, earning about $250,000 a year, and doesn’t need the money now. She wanted to know whether to convert it to a Roth, and how much to move each year.
Ramsey’s first answer was to wait: “I would do nothing for a while, like six months or a year, nothing.” Then he walked her through the extreme case of converting all of it at once. “The taxes would be 210, 220,000 bucks, probably.” (By my calculations it’s more like $209,000. But we’re all right in the same ballpark.)
Ouch. Her salary fills the lower brackets before a dollar of the IRA counts, so her own bill depends on her paycheck as much as on her IRA. So let’s take a hypothetical 62-year-old widow who’s retired, lost her husband a few years ago and has no kids at home, so she files as single. She has the same $700,000 in a traditional IRA and no other taxable income.
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Spread it out, and the bill drops by $116,810
A Roth conversion is taxed as income in the year it’s made, so every dollar she converts stacks on top of the rest of that year’s income. For 2026, the IRS gives a single filer a $16,100 standard deduction. It then taxes income at 10% up to $12,400, 12% up to $50,400, 22% up to $105,700, 24% up to $201,775, 32% up to $256,225, 35% up to $640,600 and 37% above that.
If she converts all $700,000 this year, she has $683,900 of taxable income, and it runs through every bracket:
- $1,240 at 10%
- $4,560 at 12%
- $12,166 at 22%
- $23,058 at 24%
- $17,424 at 32%
- $134,531 at 35%
- $16,021 at 37%, on the last $43,300
That’s $209,000 of federal tax, and more than $150,000 of it comes from the top two rates.
If she converts $100,000 a year for seven years instead, each year’s taxable income is $83,900. The tax on that is $1,240 at 10%, $4,560 at 12% and $7,370 at 22%, or $13,170 a year. Here are the two paths side by side:
| Metric | All at once | $100,000 a year for 7 years |
|---|---|---|
| Taxable income each year | $683,900 | $83,900 |
| Top rate reached | 37% | 22% |
| Federal tax each year | $209,000 | $13,170 |
| Federal tax in all | $209,000 | $92,190 |
That’s $116,810 less federal tax on the same $700,000, assuming 2026’s brackets stay in place and the balance stays flat. Once she’s on Medicare, she also stays clear of its income surcharge. Medicare bases the Part B surcharge on your tax return from two years before. At 2026’s levels, it starts above $109,000 of income for a single filer, so $100,000 a year stays under it. A $700,000 year would put her in the top band: $487.00 a month on top of the regular premium, for the year that return applies to.
The caller’s cheapest year may be this one
Back to the real caller. Ramsey told her that at $250,000, “there’s nothing you can do to cheat the tax bracket.” For this year, at least, she has some room.
Her husband died this year, and the IRS’s Publication 501 says a surviving spouse can choose married filing jointly for the year of the death. In 2026, the joint standard deduction is $32,200, and the joint 24% bracket runs up to $403,550 of taxable income. Say her pay is $250,000 and it’s the household’s only income this year. That leaves her with $217,800 of taxable income and $185,750 she could convert at 24% ($403,550 minus $217,800), for $44,580 of federal tax. A single filer’s 24% bracket ends at $201,775, about half the joint line.
A conversion counts for the year it’s completed, so that joint room closes on Dec. 31. After this year, she told Ramsey, she expects to file as head of household.
Ramsey’s advice to give herself time is sound, and most of that IRA can wait. The way I see it, though, the joint return is the one part of her decision with a deadline. For anyone widowed this year who’s still working, that 24% room is worth a look now. For someone in her spot, the low-bracket years of a seven-year plan come later, between the last paycheck and the first required withdrawal.
Next year’s brackets
The IRS adjusts its brackets for inflation every year, so the 2027 figures will show us how much room each year’s conversion gets. If the balance grows in the meantime, there will be more to convert. Even so, the hypothetical widow had $21,800 of room left at 22% in each $100,000 year ($105,700 minus $83,900). And all of this is federal tax. The caller lives in New York, and she told Ramsey she pays New York and New York City taxes on top.
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