Multi-Year Roth Conversion Plan

When is the best time to convert a million-dollar IRA to Roth? Almost never all at once. A Roth conversion is voluntary income, and income taxed in one giant lump runs through your highest brackets. Spread that same conversion across the right years and most of it can be taxed in a bracket you choose. The plan, not the move, is where the money is.

Why one big year loses

Convert $400,000 in a single year and you’ve stacked it on top of everything else, pushing your top dollars into 32% and lifting your Medicare premium two years out. Convert $80,000 a year for five years and you can keep each year’s top dollar in the 24% bracket, which for 2026 runs from $211,400 to $403,550 of taxable income for a married couple. Same total converted. Very different tax. The brackets are graduated, so income smoothed over time beats income bunched into one year nearly every time.

The reason this works in retirement specifically is the gap. After the paycheck stops and before Social Security and RMDs begin, your ordinary income can be unusually low. That gap, often your early 60s to early 70s, is the conversion runway. Every year you leave it empty is bracket space you never get back.

The shape of a good plan

The plan has a target and a fill. The target is the top of a bracket you can live with, usually 22% or 24%, and the fill is the conversion that brings your taxable income up to that line each year without crossing it. You’re not converting a fixed dollar amount. You’re converting whatever fits under your chosen ceiling that year, which means the number moves as your other income moves.

Walk it through. A couple retires at 63 with $2.5M in traditional IRAs and modest other income. They decide 24% is their ceiling. Each year they project their baseline income, find the room left under $403,550, and convert into it. In a low year that might be $130,000. In a year they take a large gain, it might be $40,000. They keep going until 73, when RMDs start. By then they’ve moved a large slice of the IRA into tax-free Roth, the remaining balance is smaller, and the RMD it throws off is far less violent than it would have been.

The deadlines that close the runway

Two clocks end the cheap years, and a good plan races both. The first is Social Security. Once it switches on, it fills the bottom of your bracket and up to 85% of it becomes taxable, leaving less room to convert cheaply. The second is RMDs. For someone born in 1960 or later, those begin at 75, and once they start you’re forced to take ordinary income whether you wanted to or not, often on top of a conversion. The years before both clocks start are the widest and the most wasted.

Watch the tolls along the way. Raising your income with conversions lifts your MAGI, which drives IRMAA Medicare surcharges two years later and can trip the 3.8% net investment income tax. A clean plan picks a ceiling that respects the IRMAA tier you’ve chosen, not just the tax bracket. For 2026, a married couple holds the standard Part B premium up to $218,000 of MAGI, and that breakpoint often binds before the 24% bracket does.

If your accounts are large

For a household with $3M or more in tax-deferred accounts, a single multi-year plan often isn’t aggressive enough. The math can justify accepting a higher bracket, even 32%, in a few early years, because the alternative is a lifetime of RMDs taxed at 37% plus the estate consequences of a giant pre-tax balance landing on heirs. The right ceiling is the one that beats your projected future rate, not your current comfort. Run the projection every year and adjust, because a market rally that doubles the IRA also doubles the future RMD and changes how hard you should be converting now.

A conversion plan is a decade-long fill, not a one-time event. Pick the ceiling, fill to it, and race the two clocks before they close the runway. For staying under the surcharge line while you do it, see Roth conversions without triggering IRMAA and the tax pillar.