The Roth Conversion Strategy Affluent Couples Over 60 Are Using to Drain a $1.4 Million 401(k) Before RMDs Begin

A married couple, both 61, just walked away from W-2 income with $1.4 million in a traditional 401(k). They plan to defer Social Security until 70. That decision, paired with the fact that required minimum distributions don’t begin until 73, hands them something most retirees never get: a roughly 12-year runway where their taxable income is whatever they choose to make it.

Affluent couples in this exact spot are using that window to systematically drain the pre-tax 401(k) into a Roth, paying tax voluntarily at today’s brackets to avoid a forced withdrawal at tomorrow’s. The math is unusually clean, and the 2026 brackets make it cleaner than it has been in years.

The bracket-fill math on a $1.4 million balance

Start with the 2026 numbers for a married couple filing jointly. The standard deduction is $32,200. The 22% bracket runs up to $100,800 of taxable income, the 24% bracket extends to $211,400, and the 32% cliff doesn’t hit until $403,550.

With no wages, no Social Security yet, and only modest brokerage income, this couple can convert roughly $240,000 per year and still keep taxable income at the top of the 22% bracket. Push to the top of the 24% bracket and the annual conversion grows to $375,000 to $435,000. At the 22% pace, the entire $1.4 million empties in about six to seven years, well inside the runway, every dollar taxed at 22% to 24% instead of the 32%-plus rates a swollen RMD could force.

That is the central insight. Timing and rate are the only variables; the tax itself is unavoidable. Wes Moss made the same point on a recent Clark Howard segment, noting that retirees with pensions and large IRAs often “find yourself today in the 15% tax bracket, but in retirement you’re going to be in the 20% bracket” once Social Security and RMDs stack on top of each other.

Pay the tax from the brokerage, not the IRA

A $240,000 conversion at a 22% effective federal rate generates roughly $50,000 of tax. Pulling that $50,000 from the 401(k) itself defeats most of the strategy because it shrinks the asset base growing tax-free inside the Roth. Affluent couples doing this well fund the tax bill from a taxable brokerage account, often parked in short Treasuries yielding 3.8% at six months or 3.9% at one year, so the cash is liquid when the estimated payment is due.

The IRMAA trap waiting at 63

The conversion plan runs into Medicare at age 65, and the rules use a two-year lookback on income. A large conversion at 63 sets the IRMAA surcharge at 65. A large conversion at 71 sets the surcharge at 73, exactly when RMDs land on top. The cleanest pattern is to front-load conversions in the early 60s, then taper sharply before the 63rd birthday, accepting that the final tranche may need to stretch into the 24% bracket to clear the balance in time.

Two more rules matter. Each conversion starts its own five-year clock before earnings can be withdrawn penalty-free, a point Suze Orman has flagged repeatedly: “the time clock on a Roth 401 does not transfer with you to a Roth IRA”. And Roth IRAs themselves carry no RMDs during the original owner’s lifetime, which is the entire reason this exercise pays off.

Three moves to make this quarter

1. Model the 22% versus 24% fill. Run both scenarios against your actual 2026 income. The 22% plan stretches seven years; the 24% plan compresses to four or five and may be the better fit if one spouse has a pension landing at 65.
2. Build the tax-payment bucket now. Move enough from equities to short Treasuries or a money market to cover two years of conversion taxes, so a market drawdown doesn’t force you to sell into weakness in April.
3. Stop conversions cold the year you turn 63. The two-year IRMAA lookback means income that year sets Medicare premiums at 65. If your combined income will exceed the first IRMAA threshold, the surcharge alone justifies a fee-only CPA review before December.