Roth conversion ladder while still earning high commissions

If you’re in medical sales, you already know the routine: airports, late dinners, the “quick question” from your manager at 7:18 p.m., and a comp plan that feels like it was written by a committee of caffeinated attorneys.

And then someone on the internet (or your buddy at SKO) says, “You should do a Roth conversion ladder.”

Your first thought is usually the correct one: Wait… isn’t that for people who aren’t making real money right now?

That’s exactly the tension behind a Roth conversion ladder while still earning high commissions. Roth conversions can be powerful, but for high W-2 earners with unpredictable commission spikes, the strategy is less “set it and forget it” and more “precision flying in turbulence.” Done thoughtfully, it may help reduce lifetime taxes and create flexibility for an earlier “work-optional” timeline. Done casually, it can blow up your tax return, mess with other strategies, and leave you wondering why you volunteered to pay extra taxes in your peak earning years.

I’m David Dedman, founder of Pulse Wealth. I’ve spent 30+ years in the industry, including a decade inside major brokerage firms watching how advice gets delivered when incentives aren’t clean. Pulse Wealth is a flat-fee firm and we don’t accept commissions, so the planning is about your outcomes, not someone else’s product quota. If you want to sanity-check whether conversions fit your situation, you can start with a free financial assessment with Pulse Wealth. No pressure, no sales pitch. Just clarity.

Why this strategy feels “backwards” when commissions are high (and why it can still work)

Here’s the core issue: a Roth conversion is taxable income. If you convert $50,000 from a Traditional IRA to a Roth IRA, you generally add $50,000 to your income for that year (taxed as ordinary income). For a medical sales pro earning $200k–$350k, that conversion doesn’t land in some gentle, low bracket. It stacks right on top of your salary and commissions—often at your highest marginal rate.

So yes, converting in a high-income year can be expensive. But “expensive” isn’t the same thing as “wrong.” The real question is whether paying tax now at today’s rates could reduce the odds of paying even higher taxes later, when you may have large pre-tax balances, required minimum distributions (RMDs), Social Security, maybe a spouse’s income, and fewer deductions. This is lifetime tax planning versus “minimize this year’s tax bill at all costs.” Those are not always the same goal.

Medical sales has another twist: volatility. Some years are “normal strong,” some are “blowout,” and some are “why did the hospital pause capital purchases again?” A Roth conversion ladder can work when you build it around that reality—meaning you convert in the right years, in the right amounts, with guardrails.

Roth conversion ladder basics (in plain English) and where ladders fit into early retirement

A Roth conversion ladder is just a series of Roth conversions spread across multiple years. Instead of converting one big chunk and detonating your tax bracket, you convert smaller amounts annually. Over time, you shift money from pre-tax accounts (Traditional IRA, pre-tax 401(k) after rolling out, etc.) into Roth, where future qualified withdrawals can be tax-free.

The “ladder” framing usually shows up in early retirement planning. The idea is that you create multiple “rungs” of converted Roth principal, each with its own clock, so you can potentially access converted amounts later without penalties (subject to rules we’ll cover). For people trying to make work optional before traditional retirement age, that can be part of the bridge between “I’m done” and “I can access retirement accounts cleanly.”

But here’s the candid coach moment: the ladder is not magical. The value comes from when you convert and how much you convert relative to your tax brackets and future plan. The conversion timing decision matters more than the buzzword.

The tax mechanics you must understand before converting a dollar

High-commission earners don’t need more tax complexity in their lives. But if you’re going to convert, you need a few fundamentals nailed down, because the costly mistakes are common and completely avoidable.

Conversions add ordinary income (and they stack)

Roth conversion dollars generally get taxed as ordinary income in the year of conversion. That means the conversion stacks on top of your W-2 wages and any other income. This is why “I’ll just convert $100k” can be the financial equivalent of ordering dessert after you already hit your max macros for the day.

“Bracket filling” is the sane way to think about conversions

Rather than choosing a random conversion amount, many planners use a bracket-fill approach: estimate your taxable income for the year, pick a marginal bracket ceiling you’re willing to fill up to, and convert only the “room” left in that bracket. This becomes especially important when commissions surprise you in Q4.

The 5-year rules are real (and they’re not one rule)

Roth IRAs have multiple 5-year considerations, and the details matter. At a high level, Roth conversion amounts each have their own 5-tax-year clock. The IRS explains these rules in IRS Publication 590-A. If you’re building an early-retirement bridge, those clocks can affect when money is accessible without penalty. Translation: you don’t want to be “Roth rich” on paper and “cash poor” in real life.

Paying the tax: outside cash usually matters

When you convert, you owe taxes. You can withhold from the conversion itself, but that reduces the amount that actually lands in the Roth and may create penalties if you’re under 59½ and the withheld amount is treated like a distribution. Many conversion strategies assume you can pay the tax from cash flow or taxable savings, so the full converted amount keeps working in the Roth.

The pro-rata rule can ambush your backdoor Roth

If you’re also doing backdoor Roth contributions (common for high earners), the pro-rata rule can turn what you thought was a clean, mostly tax-free step into a partially taxable mess. In plain English: the IRS looks at all your non-Roth IRAs together when determining what portion of a conversion is taxable; you generally can’t “isolate” just the after-tax dollars. Again, see IRS Pub 590-A for the official framework.

One more important rule: you generally cannot undo (“recharacterize”) a Roth conversion anymore. That option was eliminated under changes implemented after the Tax Cuts and Jobs Act, and the current rules are reflected in IRS guidance (again, Pub 590-A). In other words, measure twice, convert once.

The real challenge: doing a Roth conversion ladder while still earning high commissions

Most problems with a Roth conversion ladder for commission earners come from one bad assumption: that conversions should be the same every year.

That works for a pension recipient with stable income. It does not work for someone whose income can swing $80k+ based on product cycles, territory changes, timing of large cases, or whether procurement decided to “revisit in Q1.”

Instead of a fixed conversion amount, you usually need a conversion budget that flexes. In some years you might do a meaningful bracket-fill conversion. In a blowout year, you may do a small conversion—or pause entirely—because every additional dollar is being taxed at a high marginal rate and may create collateral damage (more on that soon).

This is the heart of the “Roth conversion ladder while still earning high commissions” question: not whether conversions are allowed (they are), but whether conversions make sense this year, in this amount, given your comp.

Tax reduction strategies that create room for conversions (especially for medical device sales reps)

If you want Roth conversions to hurt less, the most practical move is to create more “space” in your tax brackets first. For many W-2 commission earners, that means squeezing every legitimate lever available before you convert a single dollar.

Start with the basics that actually move the needle: workplace retirement plan contributions and (if eligible) an HSA. Maxing pre-tax 401(k) contributions can lower taxable income, which may allow conversion dollars to land in a lower bracket than they otherwise would. HSA contributions (when you’re eligible under an HSA-qualified health plan) can also reduce taxable income while building a powerful long-term healthcare bucket.

These are not exotic tactics, but they’re often underused because commission earners tend to focus on “how much did I make” rather than “how much did I keep.” When you combine these moves with careful conversion sizing, you’re no longer guessing—you’re shaping the tax outcome.

This is where “tax reduction strategies for medical device sales reps” become more than a Google phrase. The planning isn’t just about conversions; it’s about coordinating all the moving pieces so conversions become a tool instead of a tax penalty. (This is exactly the kind of work we cover in Pulse Wealth tax planning.)

To ground this in numbers, here’s a clean snapshot of key IRS limits and Roth contribution income ranges that come up constantly in planning. These don’t dictate how much you should convert (that’s modeling), but they set the boundaries of what else you can do in the same year.

Item	2025	2026	Why it matters for conversions
401(k) elective deferral limit	$23,500	$24,500	Maxing pre-tax can create room in your bracket for conversions.
IRA contribution limit (under 50)	$7,000	$7,500	Impacts IRA coordination (including backdoor Roth mechanics).
IRA catch-up (50+)	$1,000	$1,100	Relevant as you approach 50; interacts with SECURE 2.0 catch-up rules in employer plans.
Roth IRA MAGI phaseout (MFJ)	$236k–$246k	$242k–$252k	High commissions often exceed this; direct Roth contributions may be limited, but conversions are still allowed.
Roth IRA MAGI phaseout (Single)	$150k–$165k	$153k–$168k	Same idea: direct contributions can be limited; conversions still possible.

Source notes: 2026 retirement plan limits are published by the IRS in the newsroom update “401(k) limit increases to $24,500 for 2026; IRA limit increases to $7,500”. Roth IRA income ranges shown align with IRS notices summarizing the phase-out ranges for 2025 and 2026.

SECURE 2.0 and high earners: what changed and what to watch at work

SECURE 2.0 added a wrinkle that high-earning W-2 folks (including many medical sales pros) should not ignore: catch-up contributions may be required to be Roth for certain high earners.

Under final regulations, if your prior-year FICA wages (generally Social Security wages shown in Box 3 of your W-2) exceed the threshold amount ($145,000, indexed for inflation), then any catch-up contributions in employer plans must be designated as Roth (after-tax). Timing and implementation details matter by plan year, and the final regulations generally apply for taxable years beginning after December 31, 2026 (meaning many plans focus on 2027 plan-year compliance), with a reasonable good-faith interpretation standard applicable for 2026. EY Tax News: IRS final regulations on catch-up contributions

The practical point: your employer plan features matter more than ever. If your plan doesn’t offer Roth deferrals, it could limit catch-up contributions for those over the wage threshold. And if your plan does offer after-tax contributions plus in-plan conversion or in-service rollover, you may have access to a “mega backdoor Roth” pathway. That’s a separate strategy from a conversion ladder, but it can affect how aggressive you need to be with conversions.

Designing the ladder: a practical framework for commission-based income

When we design conversion strategies for commission earners, we don’t start with “How much can you convert?” We start with “What problem are we solving?”

Maybe you want to reduce future RMD pressure. Maybe you want tax diversification—money spread across pre-tax, Roth, and taxable so you have options later. Maybe you’re trying to create a bridge so you can step away from quota life earlier without tripping over penalties or unnecessary taxes.

Then we build conversion windows that match the reality of medical sales. Lower commission years are obvious windows, but so are job transitions, a sabbatical, a relocation to a lower-tax state, or the early-retirement gap between your last W-2 and the start of Social Security and RMDs. Often that gap is where conversions become especially efficient, because income can be intentionally managed.

Finally, we decide how to set the conversion amount. Two common approaches are:

Bracket-fill method: Convert up to a chosen marginal bracket ceiling based on a multi-year projection.

MAGI ceiling method: Convert up to just below a threshold you care about (for example, avoiding a surcharge or preserving a benefit). Not every threshold matters to every high earner, but when one matters, it matters a lot.

If you want a simple template to visualize this, here’s a bracket-fill worksheet structure you can use with your CPA’s projection or your own tax software estimates.

Planning input	Estimate	Notes
Base salary	$	W-2 wages excluding commissions (or your best estimate).
Commissions (expected)	$	Use a conservative scenario and an upside scenario.
Other income	$	Interest, dividends, capital gains, spouse income, etc.
Adjustments/deductions (high level)	$	401(k) pre-tax, HSA, etc. (plus standard/itemized deduction later in the projection).
Estimated taxable income before conversion	$	From a tax projection, not guesswork.
Target bracket ceiling (taxable income)	$	Choose based on long-term modeling (not vibes).
Conversion “room”	$	Ceiling minus taxable income before conversion (your rough conversion budget).

And here’s the commission-earner reality check: you don’t do this once in January and call it a year. You do it, then you revisit it mid-year, and you revisit it again in Q4—because your income is a moving target.

If you want us to run the bracket and threshold modeling with your comp structure, benefits, and accounts—and stress-test it against “normal,” “blowout,” and “dip” years—book a Pulse Wealth financial assessment. That modeling step is where the strategy stops being a blog concept and becomes a plan.

Avoiding the hidden cliffs: Medicare IRMAA, NIIT, and other threshold surprises

The most painful conversion mistakes often aren’t the conversion tax itself. It’s the secondary effects—what I call “hidden cliffs.”

NIIT (Net Investment Income Tax) is a common one for high earners. The IRS applies a 3.8% tax on certain net investment income when modified adjusted gross income exceeds thresholds ($250,000 for married filing jointly; $200,000 single). Roth conversions increase AGI/MAGI, which can make more households subject to NIIT on their investment income. The IRS overview is here: IRS Topic 559: Net Investment Income Tax.

Medicare IRMAA is another big one—more relevant later in life, but the planning starts earlier because it uses a two-year lookback. A conversion at the wrong time (or in the wrong amount) can increase Medicare Part B and Part D premiums two years later. You may not care today at 40—but future-you might send a strongly worded letter.

Rather than throwing a bunch of thresholds at you (they change), the best practice is simple: before converting, run a projection that flags which thresholds you’re near and how much “distance” you actually have.

Here’s a practical “awareness” table of what to check before you convert. It’s not meant to scare you—it’s meant to prevent the “how did this happen?” moment.

Item to check	Why it can matter	What to do before converting
NIIT exposure	Conversions can increase MAGI and trigger/expand NIIT on investment income.	Estimate MAGI and investment income; coordinate gains and conversion size.
Medicare IRMAA (later planning)	Two-year lookback means a conversion year can raise premiums two years later.	Model multi-year income, especially during early retirement and pre-Medicare years.
State income tax	High-tax states can add meaningful cost to each conversion dollar.	Consider timing around relocations; model state + federal combined impact.
Underpayment penalties	Conversions can create tax due that isn’t covered by normal withholding.	Adjust W-4 withholding and/or make estimated payments; coordinate with your CPA.
Backdoor Roth coordination	Pro-rata rule can make conversions unexpectedly taxable.	Inventory all non-Roth IRAs; plan sequencing before executing.

Common mistakes high-commission earners make with Roth conversion ladders

I’ve seen smart, high-income professionals make these mistakes because they’re busy, they’re human, and conversions are deceptively easy to execute online.

The first is converting too early in the year before commissions are known. January optimism is a beautiful thing—until the Q4 true-up hits and you realize you converted right into a higher bracket.

The second is paying conversion taxes from the IRA itself without understanding the tradeoff. It can reduce the long-term benefit of converting and can create penalty issues if you’re under 59½.

The third is ignoring the pro-rata rule while doing backdoor Roth contributions. People assume each account stands alone; the IRS does not.

The fourth is failing to coordinate employer plan features. Sometimes the best “Roth move” for a high earner is not a conversion at all—it’s maximizing the right workplace buckets first, especially if mega backdoor Roth is available.

Finally, there’s the paperwork issue. A ladder implies multiple conversions over multiple years, and you need clean records. Not because you love spreadsheets, but because you love not arguing with the IRS.

If a short checklist helps you avoid a mistake, this is one of the few times I’ll use bullets:

• Run a tax projection before converting (and rerun it when commissions change).

• Confirm how you’ll pay the tax (cash/withholding/estimates) to reduce surprises.

• Inventory all Traditional/SEP/SIMPLE IRAs to avoid pro-rata issues.

• Verify deadlines and processing time if converting late in the year.

• Document each conversion amount and year (each has its own clock).

When a Roth conversion ladder is a great fit—and when it’s not

This is where good advice sounds less exciting, but it saves real money: sometimes the right move is to convert, and sometimes it’s to wait.

A ladder can be a great fit when you expect a lower-income window in the future (career shift, early retirement gap, relocation), when you have large pre-tax balances that could create big RMDs later, and when you have the cash flow to pay conversion taxes without raiding the account you’re converting.

It’s often not a great fit (or not a great fit right now) when your current marginal rate is unusually high and likely to fall soon, when cash is tight and paying conversion taxes would compete with family priorities, or when you need significant near-term liquidity before any 5-year windows could reasonably be met.

Here’s a simple decision matrix that captures the “stance” most high-commission earners end up taking in different seasons of life.

Scenario	Typical conversion stance	Why	Watch-outs
Blowout commission year	Small conversion or pause	Conversion stacks at a high marginal rate; may not be efficient.	Underpayment risk, NIIT, state tax hit, other MAGI-based thresholds.
Moderate year	Bracket-fill	Often the best balance between tax cost and progress.	Q4 surprises; coordinate withholding/estimated payments.
Job change / lower-income year	More aggressive (still modeled)	Lower bracket window can make conversions more efficient.	Cash to pay taxes; make sure you don’t create other threshold problems.
Early retirement gap (before SS/RMDs)	Often the most strategic window	Income can be managed intentionally; conversions can reduce future RMD pressure.	ACA subsidy planning (if applicable), IRMAA lookback later, state residency rules.

How Pulse Wealth helps medical sales professionals execute this without guesswork

Most Roth conversion content online skips the hardest part: integrating conversions with real life. Your real life includes variable commissions, spouse income, equity comp at times, kid-related tax items, state taxes, and benefits that change when you change employers.

At Pulse Wealth, we approach this the way a high-performing rep approaches a territory: we don’t just “work hard.” We work a plan.

That means building a multi-year projection that models your commission variability, retirement plan contributions, and conversion options together. It means setting guardrails (bracket ceilings or MAGI ceilings), then revisiting the plan as your year unfolds. It means coordinating how taxes are actually paid—through withholding adjustments and/or estimated payments—so there are fewer nasty surprises in April.

And because we’re flat-fee and fiduciary, the goal isn’t to get you to “do more stuff.” The goal is to help you evaluate whether steps like Roth conversions may support your long-term goals, including a potential work-optional timeline, keeping more of what you earn, and investing in a way that supports your family life—not competes with it. This kind of coordination sits at the intersection of financial planning for medical sales professionals and a disciplined investing approach.

If you’re considering a Roth conversion ladder while still earning high commissions and you want a clear “here’s what may make sense this year” answer, schedule a free financial assessment. We’ll help you pressure-test the idea and figure out whether the next step is “convert,” “wait,” or “do a different Roth strategy entirely.”

Frequently Asked Questions

Can I do a Roth conversion ladder while my income is too high to contribute to a Roth IRA?

Yes. Roth IRA contribution limits are based on MAGI, but Roth conversions do not have an income limit. High-earning medical sales professionals who are over the Roth IRA contribution phaseout can still convert money from pre-tax retirement accounts to a Roth IRA. The key is that the converted amount is generally taxable in the year of conversion, so the planning issue becomes managing marginal tax brackets and other MAGI-based thresholds—not eligibility.

Does a Roth conversion affect my ability to do a backdoor Roth?

It can. A Roth conversion itself doesn’t prevent a backdoor Roth contribution, but the pro-rata rule can make the backdoor conversion partly taxable if you have pre-tax money in Traditional/SEP/SIMPLE IRAs. The IRS generally views your non-Roth IRAs in aggregate when determining the taxable portion of a conversion. This is why IRA “cleanup” and sequencing matter before combining backdoor Roth contributions with larger conversions. For official rule detail, see IRS Publication 590-A.

How do commissions affect the “best” amount to convert?

Commissions raise the odds that conversion dollars will be taxed at higher marginal rates because conversion income stacks on top of your W-2 wages. The best amount to convert is usually not a fixed number; it’s an amount determined by a tax projection that accounts for conservative and upside commission scenarios. Many high-commission earners use a bracket-fill approach (convert up to a chosen bracket ceiling) and revisit it later in the year as actual commissions become clearer.

What’s the 5-year rule and how does it apply to multiple conversions?

Roth IRAs have multiple 5-year considerations, and conversions add complexity because each conversion amount generally has its own 5-tax-year clock. This matters most for people pursuing early retirement or needing access to funds before traditional retirement ages. The official explanation and examples are in IRS Publication 590-A. Because rules can be misunderstood easily, it’s worth confirming how the rule applies to your age, withdrawal needs, and timing.

Should I convert in a high-income year or wait for a lower-income year?

It depends on your lifetime tax picture. Converting in a high-income year may be less efficient if it pushes you into higher marginal rates or triggers other costs (like NIIT exposure on investment income). Waiting for a lower-income year—such as a job transition, a down commission year, or an early-retirement gap—can sometimes reduce the tax cost of each converted dollar. The right answer typically comes from modeling multiple years, not just looking at this year’s bracket in isolation.