Roth Conversion Case Studies: 6 Real Retirement Tax Plans From 2026

These six Roth conversion case studies come from TaxesSaved planning meetings held in 2026 with retirees and pre-retirees who hold $800,000 to $7 million in traditional IRAs and 401(k)s. The worries repeat from meeting to meeting: required minimum distributions (RMDs) that push income up every year, Medicare IRMAA surcharges, and the tax their children will pay on an inherited IRA. Each case shows the question the client asked, what the plan looked at, and the 2026 federal numbers behind it. Names and details are changed.

Why retirees are asking about Roth conversions now

The tax on a traditional IRA or 401(k) is deferred, not forgiven, and today's rates are known while future rates aren't. The 2026 brackets run from 10% to 37% (IRS). Under current law that rate schedule is permanent, the estate tax exclusion is $15 million per person, and the extra $6,000 deduction for people 65 and older ends after 2028. Congress can change any of that in a future tax law. A Roth conversion pays tax at today's known rate on the amount you convert, and that money then grows tax-free for you and your heirs.

Case 1: Married, early 60s, two years from Medicare

The question: "How much can we convert before Medicare starts without paying more for Medicare?" The couple earns about $240,000 a year and wants to start converting before both turn 65.

What the plan looked at: Medicare sets Part B and Part D premiums from your income two years earlier, so conversions made from age 63 on show up in your premiums. On the 2026 IRMAA table, their $240,000 already lands in the first surcharge tier. Converting $102,000 takes their modified adjusted gross income (MAGI) to $342,000, the top of the second tier. That costs about $5,770 a year in surcharges for the two of them. Going past $410,000 puts them in the fourth tier at about $12,710 a year (SSA IRMAA table).

The 2026 numbers: with about $207,800 of taxable income before converting, the $102,000 conversion adds about $24,400 of federal income tax. Most of it is taxed at 24%.

Case 2: Mid-60s couple with $3.25 million in tax-deferred accounts

The question: "Is it too late to make a dent in this?" Their taxable income is about $180,000 before conversions, and almost all of their savings sit in traditional IRAs.

What the plan looked at: if the balance doesn't grow at all, the first RMD at age 73 is about $122,600 ($3.25 million divided by the IRS life-expectancy factor of 26.5), and each later RMD is a larger share of the account. The plan they discussed converts about $500,000 a year for six years, so the traditional balance is mostly gone before RMDs begin.

The 2026 numbers: a $500,000 conversion on top of their income adds about $141,900 of federal tax, and it wipes out about $10,200 of senior deduction they would otherwise keep. That is why a plan this size usually asks a second question: can part of the conversion be offset by deductions from a business the couple actively runs? The answer depends on the rules in the next section.

Case 3: A widowed client whose filing status is about to change

The question: "Should I convert the rest of my IRA this year, before I start filing single?" The client has about $60,000 of taxable income and $345,000 left in a traditional IRA.

What the plan looked at: in the year a spouse dies, the survivor can usually still file a joint return. After that, most survivors file single, and the brackets roughly halve: the 22% bracket ends at $211,400 of taxable income for a joint return and at $105,700 for a single return. The IRMAA tiers halve too.

The 2026 numbers: a $151,400 conversion costs about $29,200 in federal tax on a joint return. The same conversion on a single return costs about $36,200, roughly $7,000 more, with part of it taxed at 32%.

Case 4: Retiring in three years with $1.7 million in a 401(k)

The question: "When should I start converting?" This client also has a $1.5 million brokerage account and plans to retire in three years.

What the plan looked at: the years between the last paycheck and the start of RMDs (age 75 for anyone born in 1960 or later) are usually the lowest-income years of retirement, and they are the cheapest years to convert. The same years can also be used to sell investments at the 0% long-term capital gains rate, which in 2026 applies to taxable income up to $98,900 for a married couple and $49,450 for a single filer. Conversions and 0% gains compete for the same room, so the plan decides year by year which one gets it.

Case 5: Already taking RMDs, with a pension and about $300,000 of income

The question: "Am I too late for Roth conversions?" Pension, disability income and RMDs already add up to about $300,000 a year.

What the plan looked at: it's not too late, but every conversion now starts higher. The year's RMD has to come out first and can't itself be converted. With roughly $260,000 of taxable income, the couple has about $140,000 of room left in the 24% bracket. Their MAGI already sits in the second IRMAA tier, and converting more than about $42,000 would move them into the third. From age 70½, qualified charitable distributions sent straight from the IRA to a charity count toward the RMD without adding to income.

Case 6: A $1 million IRA and two working children

The question: "What happens to this IRA when we're gone?" The couple expects to leave most of a $1 million IRA to two adult children who are in their peak earning years.

What the plan looked at: most non-spouse heirs must empty an inherited IRA within 10 years, and if the parent had already started RMDs, the heirs also take yearly withdrawals along the way. Split evenly, $1 million is about $100,000 a year of extra income on top of the children's salaries, before growth. In the 32% bracket, that's about $32,000 a year in federal tax. A Roth IRA left to the same children still has to be emptied within 10 years, but the withdrawals are generally tax-free.

Can a business deduction offset Roth conversion tax?

Sometimes. A loss from a business you actively run can offset ordinary income, including conversion income, if three rules are met. First, you must materially participate in the business; otherwise the loss is passive and can only offset passive income. Second, you can deduct only what you have at risk. Third, the excess business loss limit caps how much can offset other income each year: $512,000 for joint filers and $256,000 for other filers in 2026. Anything above that carries forward. Depreciation can be recaptured as income when the asset is sold, and the cash you put in can be lost.

What the six Roth conversion cases have in common

• Each conversion is sized against two lines: the top of a tax bracket and the next IRMAA tier.

• The RMD comes out first, and it can't be converted.

• Large balances take a multi-year plan, not one big conversion.

• The tax is paid from outside the IRA when possible.

• Everything for 2026 has to be done by December 31 (what to do before the deadline).

How TaxesSaved builds a Roth conversion plan

The TaxesSaved CPA team, with Big Four backgrounds, builds a written multi-year Roth conversion plan for each household: how much to convert each year, which bracket and IRMAA tier to stop at, and how RMDs, Social Security and heirs fit in. We then put the plan in place and prepare the returns that report it, for clients in all 50 states.

To see what your IRA or 401(k) could cost you and your heirs in taxes, run the free Retirement Tax Calculator.

Cases are drawn from TaxesSaved planning meetings held in 2026 with clients and prospective clients. Names, places and some details are changed, numbers are rounded, and some cases combine more than one household. Tax figures are federal only and use IRS Revenue Procedure 2025-32 and SSA's 2026 IRMAA tables; your results will differ. This article is for education only and isn't tax, legal or investment advice. Talk with a qualified tax professional before you act.