Early Roth Conversions Could Cut Future Required Withdrawals for Retiring Couples
A hypothetical couple retiring at 62 with $650,000 in traditional IRAs could move $40,000 annually into Roth accounts for 11 years to reduce later required distributions. If they do nothing, the balance may grow to roughly $1.1 million by age 73, creating an initial required withdrawal near $42,000. The article compares the tax cost of conversions with the larger tax exposure that can arise later, especially for a surviving spouse filing as single.
The article compares two couples with identical $650,000 traditional IRA balances at age 62. One moves $40,000 yearly into Roth accounts through age 72, shifting $440,000 and paying up to $52,800 in federal tax. By 73, that couple’s traditional IRAs are about $543,000, producing a first RMD near $20,500, while Roth balances near $568,000 are not subject to RMDs for the people who funded them.
The non-converting couple’s balance may reach roughly $1.11 million by 73, creating a first required withdrawal near $42,000. That amount is ordinary income and can affect Social Security taxation. RMD ages are 73 for those born 1951–1959 and 75 for 1960 or later.
Retiring couples with traditional IRAs, especially those with balances large enough to trigger meaningful RMDs, could be affected by this trade-off. Paying conversion taxes early may reduce later required withdrawals and tax exposure, particularly for a surviving spouse who later files as single. However, the strategy may not suit everyone, since it requires available cash and willingness to pay taxes sooner. Its broader effect could be to encourage more retirement tax planning and greater awareness of how RMDs and filing status interact over time.