A married couple in their late 50s with $1.8 million in a traditional 401(k) and a paid-off house faces a growing tax bill at age 73. One Reddit poster on r/retirement put it bluntly, saying they wanted to start conversions at 62 to lower overall taxes in my lifetime, eliminate or reduce taxes later. That impulse is driving a specific play among affluent investors over 55: drain the pre-tax 401(k) on purpose, on a schedule, before required minimum distributions take the choice away.
Why the RMD Clock Forces the Issue
Under SECURE 2.0, required minimum distributions begin at 73. A couple who lets $1.8 million compound at 6% for 15 years lands closer to $4.3 million, and the first-year RMD on that balance runs in the neighborhood of $162,000, all taxed as ordinary income. That is the cliff the conversion strategy is built to avoid.
The window that matters is the stretch between the year wages stop and the year RMDs start. For someone retiring at 62 and waiting until 70 to claim Social Security, that is roughly eight tax years with almost no forced income. Those are the cheapest tax years a high earner will ever see.
The Bracket-Filling Math
For 2026, the 24% federal bracket runs up to $211,400 for married couples filing jointly, and the standard deduction is $32,200. A retired couple with no wages can convert roughly $243,000 from a traditional 401(k) to a Roth IRA each year and stay inside the 24% bracket. The 32% bracket does not start until $403,550 of taxable income, leaving real headroom for an aggressive conversion plan.
Eight conversions of roughly $200,000 each move $1.6 million into a Roth, where it grows tax-free, passes to heirs tax-free, and never triggers an RMD during the original owner’s lifetime. The cost is the tax paid today, ideally from a taxable brokerage account so the full converted amount keeps compounding inside the Roth.
The IRMAA Trap That Wrecks the Plan
Most do-it-yourself conversions blow up because of Medicare. IRMAA uses a two-year lookback, so a conversion done at 63 sets the Medicare premium at 65. For 2026, the surcharges begin once joint MAGI exceeds $218,000, and a couple landing in the $274,001 to $342,000 tier pays an extra $5,772 in combined Part B and Part D premiums for the year. Push into the next tier and that climbs to $9,240 per couple. None of that is deductible, and it functions as a hidden marginal tax on the last dollar converted.
The workable solution is to do the largest conversions before age 63, the last year that does not feed into a Medicare premium. From 63 onward, conversion size needs to be modeled against IRMAA tiers, not just income tax brackets.
Why the Macro Backdrop Favors Acting Now
The current setup rewards moving sooner rather than later. The 10-year Treasury sits near 4.5%, near the upper end of its 12-month range, while the Fed funds upper bound has drifted down to 3.75%. Core PCE is still running in the 90th percentile of its 12-month range. Inflation-driven bracket creep plus a federal deficit financed at higher rates historically precedes tax increases, and the OBBB-era brackets are not guaranteed to survive the next Congress.
What to Do This Year
- Map the eight-year window. Pull a projection of the pre-tax balance, Social Security claiming age, and the first RMD year. The size of the gap between current income and the top of the 24% bracket is the size of each year’s conversion.
- Front-load before age 63. Larger conversions in the years that do not feed IRMAA reduce the lifetime Medicare tax. After 63, size every conversion to the tier ceiling, not the bracket ceiling.
- Pay the tax from taxable, using a separate brokerage account. Withholding from the conversion itself shrinks the Roth and, before 59½, can trigger penalties. A separate brokerage account funds the tax and keeps the full conversion working.
If joint MAGI is already brushing the first IRMAA threshold, the planning alone justifies a fee-only advisor with tax projection software. The mistake worth avoiding is letting the RMD year arrive with the balance untouched.
Contact [email protected] for any questions or corrections.
Top Gaining Stocks
Top Losing Stocks