Why conversions shrink RMDs: the math
Your RMD each year is your prior December 31 traditional balance divided by your Uniform Lifetime Table factor. Convert $200,000 to Roth before RMDs begin, and that $200,000 (plus its future growth) never enters an RMD calculation again.
Without conversions: $800,000 ÷ 26.5 = $30,188.68 first-year RMD.
After converting $200,000 to Roth over several pre-RMD years: $600,000 ÷ 26.5 = $22,641.51 first-year RMD.
Difference: $7,547.17 less in annual RMD income, every year, plus the converted $200,000 and its growth now compound tax-free with no RMDs ever. You paid tax on the $200,000 in the conversion years; the bet is that you paid at a lower rate than those future RMD dollars would have faced.
When the strategy works, and when it backfires
- The sweet spot: retirement to age 73. After the paycheck stops but before RMDs start, income is often at its lifetime low. Converting in those years can mean paying 12% or 22% now to avoid 24%+ later on forced RMD income.
- Fill the bracket, not the bucket. A common approach is converting up to the top of your current tax bracket each year, so no converted dollar spills into the next bracket. Spreading a large conversion across years beats one giant conversion taxed mostly at your top rate.
- Watch Medicare IRMAA. Conversion income counts toward the modified adjusted gross income used for Medicare Part B and D premium surcharges, based on income from two years prior. A big conversion at 63 can raise your premiums at 65. This does not kill the strategy, but it belongs in the math.
- Heirs matter. Heirs generally prefer inheriting Roth dollars over traditional dollars, since inherited Roth distributions are tax-free while inherited traditional IRA distributions are taxable. If your beneficiaries are in high brackets, conversions can be an estate win even if the lifetime math is close.
- It is not too late after RMDs begin. You can convert at any age. The year's RMD comes out first and cannot be converted, but everything above the RMD can be, and each conversion shrinks the next year's RMD base.
- Do not convert money you will need soon. Paying conversion tax from the IRA itself shrinks the amount that reaches the Roth and, before 59 1/2, can trigger penalties. Ideally the tax is paid from non-retirement funds.
Related: QCDs are the other major RMD-reduction tool, letting charitably inclined owners over 70 1/2 satisfy RMDs with income-excluded gifts (2026 limit: $111,000 per person).
Sources
- Highland Financial Advisors, Using Roth Conversions Between Retirement and Age 73 to Reduce Future RMDs
- Morningstar, These 4 Strategies Can Reduce Your RMDs (Roth conversions as a core strategy)
- IRS RMD comparison chart: RMDs may not be rolled over to another IRA or retirement plan
- IRS Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs)
Frequently asked questions
Do Roth conversions reduce future RMDs?
Yes, dollar for dollar. Converted dollars leave the traditional balance that RMDs are calculated from, and Roth IRAs have no lifetime RMDs. The converted amount is taxable in the conversion year.
Do I have to take my RMD before doing a Roth conversion?
Yes. The first dollars out in a year satisfy your RMD, and RMDs cannot be rolled over or converted. Take the full RMD, then convert.
When is the best time to do Roth conversions to reduce RMDs?
Usually between retirement and age 73, when income is lowest. Conversions after RMDs begin still work; the RMD just has to come out first.
How much should I convert each year?
A common rule is to convert up to the top of your current tax bracket, spreading large conversions across years to keep more dollars in lower brackets.
Can a Roth conversion raise my Medicare premiums?
Yes. Conversion income feeds the MAGI used for Part B and D surcharges (IRMAA), based on income from two years earlier. Time big conversions with this in mind.
Is it too late to do Roth conversions after RMDs start?
No. Convert at any age; each conversion shrinks the next year's RMD base. The year's RMD must be taken first and cannot be converted.
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