Three Years Until RMDs. How Much Should We Convert to a Roth IRA?

A $2 million traditional IRA creates opportunities for tax planning, but converting too much may come with unexpected costs.

Planning example as of November 2026.

The Situation

Meet the Robinson Family.

In this illustrative scenario, one spouse is 70 and the other is 65. The older spouse owns a $2 million traditional IRA and is approaching the age when required minimum distributions (RMDs) begin.

That creates an important planning window.

In approximately three years, the older spouse generally must begin withdrawing money from the traditional IRA, whether the household needs that income or not.

Those withdrawals could increase taxable income, potentially affect Medicare premiums, and reduce flexibility in managing retirement taxes.

Roth conversions may help address some of these concerns, but they create a tax bill today.

What We Needed to Evaluate

• Roth conversion amounts: How do different conversion amounts affect current-year taxes?
• Federal and California taxes: How much additional income tax would each scenario create?
• Medicare IRMAA surcharges: Could a larger conversion push the couple into a higher Medicare premium tier?
• Future RMDs: Could converting assets before age 73 help reduce future required withdrawals?
• Estate planning: How could Roth assets provide greater tax flexibility for the surviving spouse?

The Sentient System™ in Action

We compare four potential strategies, from making no Roth conversion to converting enough to cross into the second Medicare IRMAA surcharge tier.

The analysis illustrates an important planning tradeoff.

A larger Roth conversion may reduce future traditional IRA balances and provide greater flexibility later. But it can also increase today's income taxes and trigger additional Medicare premiums.

And there's another consideration: the surviving spouse.

A spouse who inherits a Roth IRA can generally elect to treat it as their own, potentially allowing those assets to continue growing without lifetime required minimum distributions. Qualification and beneficiary rules still apply.

The objective isn't simply to convert as much as possible. It's to evaluate how much, when, and why a conversion makes sense within the broader retirement and estate plan.

See the Planning Example

Explore four illustrative Roth conversion scenarios and compare the potential federal taxes, California taxes, Medicare surcharges, and future retirement considerations.

Hypothetical example for illustration only. This example is based on a real-world financial planning situation. Names, personal details, and financial figures have been changed or fictionalized to protect client privacy. The illustration is educational and does not represent actual client results or guarantee any particular outcome. Future tax laws, Medicare thresholds, and individual circumstances may differ.

Sources: IRS Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs). Related reading: IRMAA brackets and the Roth conversion planning guide.

Approaching Retirement With Significant IRA Assets?

The years before required minimum distributions begin can provide an opportunity to evaluate Roth conversions, retirement income, and tax planning together.

Disclosure: Sentient Financial, LLC is a California-registered investment adviser. Registration does not imply a certain level of skill or training. This page is for educational purposes only and is not individualized investment, tax, or legal advice. Investing involves risk, including loss of principal, and no strategy guarantees a profit or protects against loss. A Roth conversion creates a current tax bill, may increase Medicare premiums, and cannot be undone once completed. Tax laws and thresholds change. Review Form ADV Part 2A for services, fees, and conflicts.