Clear Money Guide
What this guide covers
A quick view of the questions and evidence developed below.
Updated July 28, 2026. Quick answer: Aid formulas weigh income far more heavily than assets, and a conversion is income. Converting during a year that feeds an aid assessment can reduce aid by more than the tax costs — and retirement accounts themselves are generally not counted as assets.
The asymmetry that decides it
Retirement accounts are generally excluded from the asset side of aid formulas. But a conversion shows up as income, which is assessed at a much higher rate than assets are.
So a conversion converts an invisible asset into visible income — the worst possible direction for a family seeking aid.
Which years count is the whole question, and the answer has changed with aid-formula reform. Confirm the assessment years for your child’s cohort before planning around them — this page deliberately does not state a year offset that has moved more than once.
The sequencing that usually works
Convert before the first assessed year, or after the last one. For a family with a single child that is a manageable gap; with children spaced several years apart it can close the window for the better part of a decade — which is worth knowing before you assume the pre-Social-Security years are freely available.
Price the conversion before you make it
A conversion cannot be undone once it is done, so it is worth having someone model the bracket it fills, the knock-on effects on your other income and how long the money has to compound before you settle on an amount.
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Sources
IRC §408A (Roth IRAs); IRC §408A(d)(3); IRC §402(c)(11) (inherited plan amounts); IRC §170 (charitable deduction); IRC §172 (net operating losses); SECURE Act (2019) and final RMD regulations published 19 July 2024. Cross-checked July 2026 against professional analyses. Indexed thresholds, aid formulas and state Medicaid rules are described rather than asserted — they change annually and by state.
This states what the cited authority says. It is not tax advice.
Related
An aid formula that weighs income makes this a ceiling problem: the useful figure is how much conversion fits under the income level you are trying not to exceed. The Roth conversion guardrail estimator takes that ceiling and your income before the conversion and returns the room beneath it, with the estimated tax on using it. Its optional cap field is labelled for Medicare’s IRMAA, but it is simply a ceiling you set.