Guide · Estate & heirs
What a Roth conversion does to what your heirs keep
Since the SECURE Act, most non-spouse beneficiaries must empty an inherited traditional IRA within 10 years — often during their own peak-earning years. That changes the math on whether converting today is worth it, even at a rate that looks expensive on paper.
The 10-year rule
Most non-spouse beneficiaries — adult children are the common case — must fully distribute an inherited traditional IRA within 10 years of the original owner's death. There's no requirement to spread withdrawals evenly, but the account has to reach zero by year 10, and every dollar that comes out is taxed as ordinary income to the beneficiary in the year it's withdrawn. Beneficiaries who qualify as "eligible designated beneficiaries" — a spouse, a minor child, someone disabled or chronically ill, or someone no more than 10 years younger than the original owner — are exempt from the 10-year rule and can stretch distributions over their own life expectancy instead.
Why the heir's bracket matters more than yours
A traditional IRA passes to an heir with no step-up in basis — they owe ordinary income tax on every dollar, just as you would have. If your heir is in their peak earning years when the 10-year clock runs, they may pay a materially higher marginal rate on that inherited money than you'd pay converting it yourself today, even in a year that looks like an expensive bracket for you. A Roth IRA, by contrast, passes to the heir income-tax-free — the 10-year rule still applies to when the money must come out, but there's no tax due on any of it.
A worked example
Say you're weighing a $50,000 conversion today at a 24% marginal rate ($12,000 of tax) versus leaving that $50,000 in the traditional IRA for an adult child to inherit. If that child is in their 30s, mid-career, and in the 32% bracket when the 10-year clock forces the money out, the same $50,000 costs $16,000 in tax at their rate instead of $12,000 at yours — a $4,000 difference in the family's favor for converting now. Growth applies on both paths — what differs is the rate at which it's eventually taxed.
It isn't automatic
This doesn't mean converting is always better for heirs. If your heir is likely to be in a lower bracket than you — a charitably inclined beneficiary, someone early in their career, or one already claiming child-related credits — leaving pre-tax money behind can be the better outcome. The comparison only works when it's run explicitly, not assumed.
How Harbor handles it
Harbor projects every account — traditional, Roth, taxable, cash, and any annuities — thirty years out on both the convert and hold paths, and compares the after-tax legacy left to heirs directly: the Roth balance passes untaxed, the remaining traditional balance is taxed at your entered heir rate, and the conversion's own tax cost is netted out of the accounts that actually paid it. That comparison, not the current-year bracket, is what the family-value figure on your results page is built from.
See what your heirs would actually keep
Enter your heir's expected tax rate and Harbor compares the after-tax legacy on both paths.
Start planning — it's free →Common questions
How does a Roth conversion affect what my heirs receive?
Harbor projects every account 30 years out and compares after-tax legacy on the convert vs. hold path, netting the conversion tax and the heir's tax on inherited pre-tax dollars.
Does the 10-year rule apply to a Roth IRA too?
Yes, for most non-spouse beneficiaries the same 10-year window applies to when the money must be withdrawn — but because a Roth's withdrawals are tax-free, the timing matters far less than it does for a traditional IRA.