Overview
- Reporters and advisers recommend using a conversion ladder in the gap before required minimum distributions (RMDs) to move slices of traditional retirement accounts into Roth IRAs so those balances grow tax free and are not subject to future RMDs.
- The strategy relies on a limited low‑income window between retirement and full Social Security or RMD age when taxpayers can keep reported income low and convert amounts inside the 10%–12% brackets to minimize upfront tax costs.
- Practices described include concrete rules of thumb such as converting roughly $38,750 a year for eight years to build a tax‑free Roth bucket or topping off the 22% bracket with about $90,000 a year for larger IRAs to avoid pushing income into top rates.
- Advisers warn of tradeoffs: Medicare’s IRMAA uses a two‑year income lookback so a large conversion can raise Part B and Part D premiums later, and conversions can change the taxation of future Social Security benefits if they spike reported income.
- The pieces argue this tax sequencing is an alternative to the old 4% withdrawal rule because it builds a tax‑efficient income floor, reduces the chance of selling assets in downturns, and requires personalized modeling to balance Social Security timing, Medicare rules, and bracket planning.