RMDs Start at 73. The Roth Conversion Plan That Turns a $1.4 Million IRA Into $7,100 a Month Tax-Free

Once required minimum distributions start, your IRA determines how much taxable income you report each year. A required minimum distribution, or RMD, is the amount the IRS requires you to withdraw from your tax-deferred IRA each year. Here’s how a married couple can move a $1.4 million IRA into a Roth first, then draw about $7,100 a month tax-free. All figures were current as of November 2026.

Born 1951 Through 1959? Your RMD Clock Reads 73

Federal law sets the RMD age at 73 for people who turn 72 after 2022 and 73 before 2033. That generally covers birth years 1951 through 1959. If you were born in 1960 or later, your RMD age is 75. This plan assumes a couple born in 1959. Their first RMD year is the year they turn 73, which is 2032.

What Waiting Costs in Year One

The IRS Uniform Lifetime Table gives a 73-year-old a factor of 26.5. That puts the first RMD at about $52,800. Suppose that’s the couple’s only taxable income. After the $32,200 joint standard deduction for 2026, they’d owe about $2,063 in federal tax.

That first year is the cheap one. The factor shrinks each year, so required withdrawals keep growing. Social Security also gets pulled in. Once half your benefits plus your other income passes $44,000 on a joint return, up to 85% of your benefits become taxable.

Six Conversions That Stay in the 22% Bracket

A Roth conversion moves IRA money into a Roth IRA. You pay income tax on it now. Later withdrawals are tax-free once the Roth is five years old and you’re past 59½. The plan converts about $233,000 a year from 2026 through 2031. After the standard deduction, each year’s conversion stays inside the 22% bracket. For joint filers, that bracket ends at $211,400 of taxable income. The tax comes to about $33,700 a year and $202,000 in total, which is roughly 14% of the balance. If those dollars would be taxed at more than 14% later, converting wins.

Run the Traditional-versus-Roth math on your own bracket and timeline before committing to a conversion schedule:

Plug in your own bracket today versus what you expect once RMDs and Social Security stack up. These numbers assume no other income, a balance that doesn’t grow, and taxes paid from savings outside the IRA. They also leave out two breaks that would cut the bill a bit: the extra deduction at 65, and the new $6,000 senior deduction, which reduces by 6% of income above $150,000.

Two rules matter here. First, you can’t convert an RMD. Once RMDs begin, that year’s withdrawal has to come out before anything gets converted. Second, Medicare’s premium surcharges look at your income from two years earlier, so 2026 conversions can raise your 2028 premiums. Convert the whole balance, and the $52,800 first RMD falls to zero. Those quiet years between your last paycheck and your first required withdrawal are the cheapest conversion window you’ll ever get, and we sized up exactly how to use them in a free guide here.

What a $1.4 Million Roth Pays Each Month

The Roth is split across six holdings. At their latest yields, the blended yield is about 6.5%. On $1.4 million, that’s roughly $7,550 a month, which tops the $7,100 target. If you pay the conversion tax out of the IRA instead, income falls to about $6,460. In that case, the target takes a few years of growth to reach.

iShares Core High Dividend ETF

iShares Core High Dividend ETF (NYSEARCA:HDV) owns U.S. stocks picked for steady, above-average dividends. It makes up 15% of the portfolio. Its recent payouts average about a 4.1% yield, fees run 0.08%, and it brings in about $719 a month. Payouts vary from month to month, so this income won’t arrive in even amounts.

Goldman Sachs Nasdaq-100 Premium Income ETF

Goldman Sachs Nasdaq-100 Premium Income ETF (NASDAQ:GPIQ) owns Nasdaq-100 stocks and sells call options on them for extra cash. At 20% of the mix, it yields about 10.7% based on the past year’s payouts. That’s roughly $2,490 a month, the biggest share. The tradeoff: those options limit your gains when the market jumps.

NNN REIT

NNN REIT (NYSE:NNN) is a net-lease landlord, which means its tenants pay property taxes, insurance, and maintenance. It’s 15% of the portfolio, yields about 6.0%, and brings in roughly $1,040 a month. This year’s raise was its 37th straight annual dividend increase.

Golub Capital BDC

Golub Capital BDC (NASDAQ:GBDC) is a business development company, a fund that lends to midsize private companies. At 15%, it yields about 10.1% and brings in roughly $1,770 a month. Its loans look mostly healthy. 89% of the portfolio carries its top internal ratings, and loans that have stopped paying make up just 1.4% of fair value. Even so, it cut its base payout about 15% this year.

Dominion Energy

Dominion Energy (NYSE:D | D Price Prediction) is a regulated utility whose Virginia earnings are rising on data center demand. It’s 15% of the portfolio, yields about 3.8% and brings in roughly $670 a month. Dominion cut its dividend about 33% in late 2020, and the payout hasn’t grown since 2022.

State Street SPDR Bloomberg 1-3 Month T-Bill ETF

State Street SPDR Bloomberg 1-3 Month T-Bill ETF (NYSEARCA:BIL) holds Treasury bills that mature in one to three months. At 20%, it yields about 3.7% based on the past year’s payouts and brings in roughly $860 a month. Think of it as a cash cushion. If another holding cuts its payout, you can spend from here instead of selling stocks while prices are down.

One Move to Make Before Your First RMD Year

Here’s where the plan lands: about $202,000 in conversion tax, a first RMD that falls from about $52,800 to zero, and roughly $7,550 a month tax-free. Between now and 2032, run a tax projection every December. Size that year’s conversion so it fills the 22% bracket without going into the 24% bracket, and decide whether crossing the $218,000 Medicare surcharge line is worth it, since a conversion of about $233,000 already lands just above it.

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