The Widow’s Tax: What Are You Actually Protecting With a Roth Conversion?

Jim is not thinking about tax brackets when he considers a Roth conversion. He is thinking about his wife, Susan, and whether the life they built will hold if he is not there. That is where most conversations about the widow’s tax begin.

When one spouse passes away, the survivor shifts to a single filer, and more of their remaining income may be taxed at higher rates, even as total income declines. The appeal of using a Roth conversion is to pay the tax now, while brackets are wider, and shift the future burden away from the survivor.

Before acting on that appeal, it is worth looking carefully at what actually changes and what does not.

Filing status can change. Longevity is unknowable. Income levels may rise or fall. Even tax policy can shift over time. Those variables are uncertain and open to interpretation. Paying taxes today is not. Once a conversion is made, the tax is real and permanent. Which means the decision is less about predicting the future and more about deciding which potential outcome is worth protecting.

Jim and Susan are both 65, and they have saved diligently over the years. They are two years away from full retirement age and weighing when to begin Social Security. Susan’s projected benefit is about $1,800 per month. Jim’s is roughly $3,500. To support their lifestyle, they expect to draw about $100,000 per year from their IRA.

While they are both alive and filing jointly, their income fits comfortably within the lower brackets. But if Jim passes first, Susan assumes Jim’s larger benefit, and her own benefit stops under the survivor rules. Filing alone, her total income may decline, yet a larger share of it may be taxed at higher rates. The structure shifts, and over time, that shift can matter.

They have options.

In one approach, they do nothing. They continue drawing from the traditional IRA as planned. When Jim passes and Susan files alone, required minimum distributions continue, and more of her income may be taxed at higher rates. The increase may feel incremental, but over many years, it adds up.

In another approach, while both are alive and filing jointly, they choose to convert portions of the IRA to a Roth. They pay the tax now, reducing the size of the account that will later be taxed to Susan alone. Assets inside the Roth can later be withdrawn without adding to taxable income, creating flexibility in how she supports her lifestyle.

But the trade-off is immediate and irreversible. The taxes paid on the conversion cannot be recovered. The money leaves the portfolio today. And no one knows how long Susan will live to benefit from the shift. If her income later proves lower than expected, or her lifetime shorter than modeled, some of the tax paid early may not have been necessary.

Spending in retirement is personal, and it changes. In some cases, surviving spouses spend less; in others, they spend more. Those decisions cannot be anticipated with any real degree of certainty, which means the choice to convert or not convert deserves careful consideration. The cost of a Roth conversion is certain, while the benefit is not. Variables like time, future income levels, and even tax rates remain unknowable. The break-even point for paying taxes early can be long. The phrase “widow’s tax” carries weight. It naturally creates the desire to act. But slowing down and weighing the trade-offs is essential.

When both lifetimes are carefully considered, the surviving spouse frequently does move into a higher bracket. Over a long surviving lifetime, incremental differences can compound meaningfully. The unknowable component is how long the surviving spouse will live to experience it.

This does not mean Roth conversions are right or wrong. For some couples, converting earlier smooths lifetime tax exposure. For others, once the numbers are examined in context, the urgency softens. Roth conversions are a tool. How they are used depends on carefully considering the trade-offs, rather than the emotional weight of a phrase like “widow’s tax.”