A married couple in suburban Ohio, both 62, with $600,000 sitting in traditional IRAs and a comfortable but not extravagant retirement income, faces a question that will quietly shape their finances for the next three decades: should they pay tax on those IRA dollars now, at a rate they know, or wait and hope that rate never goes up?
Nearly a year after the One Big Beautiful Bill Act became law on July 4, 2025, that question has a sharper edge than most people realize. The OBBBA, enacted as Public Law 119-21, made the individual rate cuts from the 2017 Tax Cuts and Jobs Act permanent by stripping out the sunset clause that would have forced brackets back to pre-2018 levels after December 31, 2025. The 12, 22, and 24 percent brackets are now written into the Internal Revenue Code with no expiration date.
But “permanent” in the tax code has never meant untouchable. Any future Congress can raise rates through budget reconciliation with a simple majority vote. Given the federal deficit trajectory, that possibility is not abstract. For savers weighing whether to move traditional IRA dollars into a Roth account, the strategic calculation comes down to this: lock in today’s confirmed 22 percent rate while the political environment supports it, or wait and risk paying 25 percent or more if a future Congress rewrites the brackets, as Congress has done repeatedly over the past 40 years.
What the OBBBA actually changed
The TCJA, signed in December 2017, dropped the old 25 percent bracket to 22 percent and compressed several other tiers. Every individual rate cut, however, carried a built-in expiration: the reductions were scheduled to vanish after tax year 2025, snapping filers back to the pre-2018 schedule of 15, 25, 28, 33, 35, and 39.6 percent brackets.
The OBBBA eliminated that expiration by amending Internal Revenue Code Section 1(j). The enrolled bill text on GovInfo shows the sunset language struck entirely, making the TCJA rate schedule apply to all taxable years beginning after 2017 with no termination date. The IRS has published 2026 tax brackets reflecting this permanent structure, confirming the agency treats the change as fully operational.
For married couples filing jointly in 2026, the 22 percent bracket covers taxable income from approximately $96,950 to $206,700 (thresholds adjust slightly each year for inflation). Single filers hit the 22 percent bracket at roughly $48,476 through $103,350. Those ranges define the conversion sweet spot: traditional IRA dollars pulled into taxable income within these bands are taxed at 22 cents on the dollar, not the 25 cents or more that would have applied under the old schedule.
Why the risk of higher rates has not disappeared
Removing a sunset clause is not the same as guaranteeing a rate. Congress has rewritten individual income tax brackets repeatedly over the past four decades, sometimes within just a few years of a prior overhaul. A Congressional Research Service analysis of major tax revisions documents this pattern, noting that rate structures branded as long-term reforms have frequently been revised when deficit pressures or political coalitions shifted.
The current fiscal backdrop makes that history directly relevant. The Congressional Budget Office projected in its January 2025 baseline that federal debt held by the public would reach roughly 118 percent of GDP by 2035 under then-current law. That projection predates the OBBBA’s full fiscal impact, meaning the actual trajectory could be steeper. If a future Congress needs revenue, individual income tax rates are historically the single largest lever available.
“The permanence label gives people a false sense of security,” said Mark Luscombe, a principal federal tax analyst at Wolters Kluwer Tax & Accounting, in a widely cited analysis of the OBBBA’s rate provisions. “What it really means is that the next change requires an affirmative vote rather than happening automatically. That is a meaningful difference for planning, but it is not a guarantee.”
No official body has published a specific timeline or trigger for revisiting the brackets. But the absence of a scheduled reversion does not equal the absence of risk. It simply means the risk shifted from automatic (a sunset date on the calendar) to discretionary (a future vote). For planning purposes, the period from 2026 through 2029 represents the strongest window of confidence: the current Congress is unlikely to raise rates it just made permanent, and any major tax legislation from a future Congress would likely require at least a year of debate after new members take office. By the early 2030s, that political buffer thins considerably, and the deficit math grows harder to ignore.
The math behind “tens of thousands in savings”
Return to that Ohio couple. They have combined Social Security and pension income that fills their tax return up to $120,000 of taxable income, placing them squarely in the 22 percent bracket with roughly $86,000 of room before crossing into the 24 percent tier.
If they convert $70,000 per year over four years (2026 through 2029), they pay federal tax of $15,400 on each conversion, totaling $61,600. The $280,000 now sits in a Roth IRA, growing and distributing tax-free for the rest of their lives.
Now suppose they wait, and a future Congress raises the bracket covering that same income range back to 25 percent. The same $280,000 in conversions would cost $70,000 in federal tax, a difference of $8,400. If rates climb to 28 percent (the pre-TCJA rate for income above roughly $153,100 for joint filers), the gap widens to $16,800 on the conversion cost alone.
But the conversion cost is only part of the picture. The larger payoff comes from decades of tax-free compounding inside the Roth. A $280,000 Roth balance growing at 6 percent annually reaches approximately $1.2 million in 25 years. Every dollar withdrawn from that account owes zero federal income tax. The same $280,000 left in a traditional IRA, subject to required minimum distributions starting at age 73 and taxed at withdrawal, would surrender roughly $300,000 to federal taxes over that period at a 25 percent rate. Combining the lower conversion cost with the tax-free growth, the net lifetime savings for this single household can reach $50,000 to $70,000 or more, depending on actual returns and future rate changes.
Practical details that change the calculation
The 22 percent federal rate is not the only cost of a Roth conversion. Several other factors can raise or lower the true price tag, and overlooking any of them can turn a smart conversion into an expensive mistake.
State income taxes. Residents of states with their own income tax (California, New York, New Jersey, and others) will owe state tax on conversion income as well, potentially adding 4 to 13 percentage points to the effective rate. States with no income tax, including Florida, Texas, and Nevada, make conversions cheaper in absolute terms. Retirees who plan to relocate should consider timing conversions to coincide with residency in a no-tax or low-tax state.
Medicare premium surcharges (IRMAA). Roth conversions increase modified adjusted gross income (MAGI), which is the figure Medicare uses to set Part B and Part D premiums two years later. A $70,000 conversion in 2026 could push a couple’s 2026 MAGI above the first IRMAA threshold (approximately $206,000 for joint filers in 2026), triggering surcharges of roughly $70 to $420 per person per month on Part B premiums in 2028, depending on the income tier. Spreading conversions across multiple years helps keep MAGI below these thresholds.
Social Security taxation. For filers who have not yet reached the point where 85 percent of their Social Security benefits are taxable, conversion income can push them past that threshold. The mechanics are counterintuitive: for every additional dollar of income in the phase-in range, up to $0.85 of Social Security benefits become taxable, effectively adding 10 to 15 percentage points to the marginal tax rate on that portion of conversion income. A couple converting $70,000 who crosses from 50 percent to 85 percent taxability on $30,000 of Social Security benefits could owe an extra $2,000 to $3,000 in federal tax that year. This interaction is often overlooked and can meaningfully erode the benefit of converting.
The 3.8 percent net investment income tax. Roth conversion income itself is not subject to the NIIT, but the additional adjusted gross income from a conversion can push investment income above the $250,000 threshold (married filing jointly), triggering the surtax on capital gains, dividends, and other investment income that would otherwise have stayed below the line.
The five-year rule. Each Roth conversion starts its own five-year clock. If a taxpayer withdraws converted amounts before five years have passed and before reaching age 59½, the withdrawal may be subject to a 10 percent early withdrawal penalty on the converted amount. For the 62-year-old couple in this example, the rule is not a concern. But younger converters need to plan liquidity carefully and avoid tapping converted funds prematurely.
How to use the certainty window without overreaching
The strongest approach for most households in the 22 percent bracket is a multi-year conversion plan that fills the bracket without spilling into the 24 percent tier. That means calculating taxable income from all sources (wages, pensions, Social Security, rental income, required minimum distributions) and converting only enough traditional IRA dollars to reach the top of the 22 percent band.
Spreading conversions across 2026, 2027, 2028, and 2029 accomplishes two things. First, it keeps each year’s tax bill manageable and avoids IRMAA spikes. Second, it hedges against the possibility that Congress acts sooner than expected: if rates rise in 2028, the household has already converted two years’ worth of IRA dollars at the lower rate.
Taxpayers who are already retired and drawing Social Security should model the interaction carefully, ideally with a CPA or enrolled agent who can run multi-year projections. The IRS does not offer a Roth conversion calculator, but the agency’s required minimum distribution FAQ provides the framework for understanding how traditional IRA balances generate forced taxable income starting at age 73. That forced income is precisely what Roth conversions are designed to reduce or eliminate before it begins.
One additional planning note: taxpayers cannot undo a Roth conversion once it is completed. The TCJA eliminated recharacterization of Roth conversions starting in 2018, and the OBBBA did not restore it. Every conversion is final, which makes accurate income projections before year-end essential.
A known rate in an uncertain decade
The OBBBA gave mid-income savers something genuinely valuable: a confirmed tax rate, written into statute, with no expiration date. That is a better planning foundation than the temporary rate schedule it replaced. But the law did not eliminate the possibility that rates will rise. It moved the risk from an automatic sunset to a future legislative vote, and the Congressional Research Service’s own history of tax legislation suggests those votes happen more often than the word “permanent” implies.
For households in the 22 percent bracket with meaningful traditional IRA balances, the case for converting between now and 2029 is as strong as it has been at any point since the TCJA took effect in 2018. The rate is confirmed, the IRS brackets are published, and the political window for stability is open. Waiting costs nothing if rates never change. But if they do, the price of inaction could run to tens of thousands of dollars over a retirement. As of June 2026, the numbers favor acting on that asymmetry while it lasts.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
