Roth Conversion for IRA Millionaires

A Roth conversion for IRA millionaires is a fundamentally different decision than it is for a saver with a modest balance, because a seven-figure pre-tax account decides your lifetime tax brackets, your Medicare premiums, and what your children inherit. At $1M to $5M-plus, a central question is not whether to convert, but how much to convert and how much to deliberately leave behind.

Roth Conversion for IRA Millionaires: Why the Math Changes at Seven Figures

There is no income limit and no dollar cap on a Roth conversion, and there never has been, which is why a conversion is one of the few tax tools still open to high-balance savers who long ago lost the ability to contribute to a Roth directly (IRS Publication 590-A, 2025). The amount converted is taxed as ordinary income in the year you move it.

Balance size changes the strategy, not just the stakes. A $1M IRA, a $3M IRA, and a $5M-plus IRA behave like three different problems. A $1M owner can often move most of the balance during a handful of low-income years without touching a top bracket. A $3M owner usually cannot convert it all without paying tax above the future RMD rate, so the work is choosing how much. A $5M-plus owner is almost always deciding for two generations at once, because heirs, not the owner, drive the answer. Our Roth conversion service starts by sizing which problem you have.

The RMD Tax Bomb Waiting on a $1M-Plus Pre-Tax IRA

Once you reach RMD age, the IRS forces a taxable withdrawal every year for life, set by your prior-year balance and a shrinking life-expectancy divisor. On a seven-figure balance those forced draws can push you into higher brackets and trigger Medicare surcharges. Because the divisor shrinks with age (26.5 at 73, 24.6 at 75, 20.2 at 80), the forced draw rises over time (IRS Uniform Lifetime Table, Pub 590-B, 2025).

The figures below are illustrative first-year RMDs assuming the balance is held flat; in practice balances usually keep growing, so the forced income grows with them. They are hypothetical, not a projection of any client outcome.

Pre-tax balance	RMD at 73 (divisor 26.5)	RMD at 75 (24.6)	RMD at 80 (20.2)
$1,000,000	~$37,736	~$40,650	~$49,505
$3,000,000	~$113,208	~$121,951	~$148,515
$5,000,000	~$188,679	~$203,252	~$247,525

A $5M owner is forced to report roughly $188,000 of ordinary income at 73 whether they need the cash or not, on top of Social Security and any pension. That is the RMD tax bomb, and conversions before 73 are the main way to defuse it. See our 2026 RMD reference.

Your Roth Conversion Window: The Low-Income Years Before RMDs

The conversion window is the stretch between the year your paycheck stops and the year RMDs and Social Security refill your tax return, typically 5 to 12 years for someone who retires in their early-to-mid 60s. In that gap, taxable income can fall far below its working-year level, leaving room to convert at lower marginal rates before the RMD tax bomb and Social Security arrive.

For a couple who retires at 62 and delays Social Security to 70, with RMDs starting at 73 to 75, that window can run a decade. Converting during it also pre-empts the Social Security tax torpedo, where rising provisional income makes up to 85% of benefits taxable (Source: IRS Pub 915); shrinking the traditional balance early can hold future income below the levels that trigger it. See our note on the Social Security tax torpedo.

How Much Should an IRA Millionaire Convert to Roth Each Year?

There is no single right number; the annual amount is set by your other income, the top of the bracket you are willing to fill, your Medicare timing, and how many years remain before RMDs. A common approach converts enough each year to reach the top of a target bracket without spilling into the next one, then repeats across the window. The goal is a flatter lifetime tax rate, not the largest single-year conversion.

Balance size drives the pace. A $1M owner might clear most of the account in six or seven years of moderate conversions; a $3M or $5M-plus owner usually cannot, so the annual figure becomes a deliberate ceiling rather than a race to empty the account. Our how much to convert discussion walks through the inputs.

Bracket-Filling: The Core Roth Conversion Strategy at Seven Figures

Bracket-filling means converting only enough in a given year to top off your current federal bracket, then stopping, so none of the conversion is taxed at the next rate up. Spread across several low-income years, it lets a seven-figure balance move at a controlled average rate instead of one enormous conversion taxed at top rates. The exact bracket thresholds are set annually by the IRS, so the target changes each year.

The table below is illustrative and hypothetical: a married couple filing jointly, both 62, recently retired with a $2,000,000 traditional IRA and modest other income, taking the 2026 standard deduction of $32,200 (IRS Rev. Proc. 2025-32), converting into the 24% bracket each year and paying the tax from a taxable account. Investment growth is ignored to keep the arithmetic clear.

Year (age)	Converted that year (illustrative)	Cumulative converted	Traditional IRA remaining
Year 1 (62)	$300,000	$300,000	$1,700,000
Year 2 (63)	$300,000	$600,000	$1,400,000
Year 3 (64)	$300,000	$900,000	$1,100,000
Year 4 (65)	$300,000	$1,200,000	$800,000
Year 5 (66)	$300,000	$1,500,000	$500,000
Year 6 (67)	$300,000	$1,800,000	$200,000

The couple stops with roughly $200,000 left on purpose (see the partial-conversion section below). By RMD age the remaining traditional balance is small, so future RMDs stay modest instead of detonating. Figures are hypothetical and estimate no client result.

Roth Conversions and the 2026 IRMAA Brackets

IRMAA is the income-related surcharge added to Medicare Part B and Part D premiums, and it is a cliff, not a phase-in: one dollar of modified adjusted gross income (MAGI) over a threshold jumps the entire monthly surcharge for twelve months. Because IRMAA uses your MAGI from two years earlier, a conversion done today can raise your Medicare premiums two years later (CMS 2026 fact sheet, Nov 14, 2025).

2026 MAGI, married filing jointly (2024 income)	Total monthly Part B premium
$218,000 or less	$202.90 (no surcharge)
Over $218,000 to $274,000	$284.10
Over $274,000 to $342,000	$405.80
Over $342,000 to $410,000	$527.50
Over $410,000 to under $750,000	$649.20
$750,000 or more	$689.90

Part D adds a further surcharge from $0 up to $91.00 per month across the same brackets (CMS, Nov 14, 2025). For IRA millionaires the timing insight is specific: because Part B starts at 65 and the lookback is two years, MAGI at age 63 sets your first Medicare-year IRMAA. Large conversions completed at 62 or earlier land before that lookback window and do not raise IRMAA at all. A big conversion can also push MAGI past the 3.8% Net Investment Income Tax threshold, pulling brokerage income into that extra tax. See our 2026 IRMAA bracket guide.

Paying the Conversion Tax With Outside Money

Paying the conversion tax from a taxable account rather than from the IRA affects how much of the balance actually converts. If you withhold the tax out of the converted amount, less money reaches the Roth, and if you are under 59 and a half the withheld portion can be treated as an early distribution. Paying from outside funds moves the full pre-tax balance into the Roth.

This is why IRA millionaires with a sizeable taxable brokerage account are often better positioned to convert than those whose entire net worth sits inside the IRA. The outside cash is buying tax-free space at today’s rates.

The Partial Roth Conversion Strategy: How Much to Leave Unconverted

For a seven-figure owner, a central question is not how much to convert but how much to keep in the traditional bucket. A remaining pre-tax slug is an asset, not only a liability. It can fund qualified charitable distributions (QCDs), which let you send up to $111,000 a year from an IRA to charity, tax-free, counting toward RMDs (IRS Notice 2025-67, 2026 figure). It can also absorb later medical or long-term-care deductions.

Balance size sets the target. A $1M owner planning significant charitable giving might leave a QCD-sized reserve; a $3M or $5M-plus owner usually leaves a larger slug precisely because converting the whole account would mean paying today at a rate above what the RMDs would ever cost. Deciding what stays behind is as much of the plan as deciding what moves. See QCD versus Roth conversion.

The SECURE Act 10-Year Rule and Your Heirs’ Tax Brackets

Under the SECURE Act, most non-spouse heirs must empty an inherited IRA within 10 years of the owner’s death. For an IRA millionaire, that turns your children’s own tax brackets into the decision. If your kids are in their peak earning years, a large inherited traditional IRA drained over 10 years stacks on top of their salaries and can be taxed at rates well above your own retirement bracket.

This flips the usual framing. A healthy seven-figure owner often converts even when it looks like a wash for themselves, because the alternative is heirs draining a pre-tax account at a higher marginal rate than the owner pays today. Roth dollars still come out over 10 years, but with no tax bill attached. The comparison that matters is your bracket now versus your heirs’ bracket later, which is why we ask about your children’s incomes early. See the inherited IRA 10-year rule explained.

The Roth Conversion Break-Even Framework

The break-even question compares your marginal rate on the conversion today against the rate that would apply to those same dollars later, whether through your own RMDs or your heirs’ withdrawals. If the future rate is expected to be equal or higher, converting today tends to come out ahead; a conversion loses ground only if the future rate falls meaningfully below today’s.

Two factors can weigh toward converting sooner for this persona: the RMD tax bomb tends to raise future rates on large balances, and current federal rates were made permanent under the 2025 One Big Beautiful Bill Act, so converting today applies at known rates, though a future Congress could still change the law. The math is client-specific; our break-even framework models it against your projected RMDs and heir brackets.

The 5-Year Rule for Converted Funds When You’re Already Retired

Each Roth conversion starts its own 5-year clock. To withdraw the converted principal without a possible 10% penalty, five tax years must pass, though this penalty generally does not apply once you are 59 and a half. A separate 5-year rule governs whether earnings come out tax-free, satisfied once any Roth IRA you own has been open five years and you are past 59 and a half.

For a retiree past 59 and a half the penalty concern is usually moot, but the earnings clock still matters if this is your first Roth. Conversions are irreversible: the 2017 Tax Cuts and Jobs Act ended recharacterization of conversions starting in 2018, and a conversion counts for a tax year only if funds move by December 31 (IRS Instructions for Form 8606, 2025). See the Roth conversion deadline.

How Rothology Approaches Roth Conversion for IRA Millionaires

Rothology Premier is a flat-fee, fiduciary Roth conversion planning service. It builds a multi-year conversion plan, models tax projections across your window, and reviews the plan annually as brackets, balances, and Medicare timing change. We do not sell financial products; the work is analysis and planning. Typical clients hold $750,000 or more in pre-tax assets.

For a seven-figure owner, the engagement models the bracket-filling schedule, the IRMAA and Social Security interactions, the amount to leave unconverted for QCDs and later-year deductions, and the heir-bracket comparison under the 10-year rule, documented so you can see the assumptions behind every figure. Nothing here is individualized advice; a formal engagement builds a plan for your situation.

Frequently asked questions

Should I convert my entire IRA to a Roth, or only part of it?

For most seven-figure owners, a partial conversion tends to fit better than an all-at-once move, because converting the whole balance in a few years can push income into top brackets and past IRMAA cliffs. Leaving a pre-tax slug can also fund QCDs (up to $111,000 in 2026, per IRS Notice 2025-67) and later-year deductions. The right split depends on your brackets and your heirs’ brackets.

Is it too late to do a Roth conversion at 65 or 67?

Generally no. There is no age limit on conversions. At 65 or 67 you may still have several low-income years before RMDs begin (73 for those born 1951 to 1959, 75 for those born in 1960 or later, per IRS SECURE 2.0 guidance, 2024). The window is shorter than at 60, so the annual amounts are often larger, and IRMAA timing matters because Medicare has already started.

Do Roth conversions actually eliminate required minimum distributions?

Roth IRAs have never had lifetime RMDs for the original owner, and since 2024 designated Roth accounts inside employer plans no longer have owner RMDs either (SECURE 2.0, per IRS RMD FAQs). Converting pre-tax dollars removes them from the RMD calculation, so converting before RMD age can shrink or defuse future required withdrawals. Dollars left in the traditional account still carry RMDs.

Will a large Roth conversion push me into a higher tax bracket or trigger IRMAA surcharges?

It can. A conversion is ordinary income in the year you make it, so a large one can spill into a higher bracket and, two years later, into a higher IRMAA tier. In 2026, joint MAGI over $218,000 begins raising Part B premiums above the standard $202.90 per month (CMS, Nov 14, 2025). Bracket-filling across several years is how owners manage both.

Are Roth conversions worth it if I plan to leave the money to my children?

Often this strengthens the case. Under the SECURE Act, most non-spouse heirs must empty an inherited IRA within 10 years. If your children are in peak earning years, a traditional inherited IRA drained over that decade may be taxed at rates above your own. Roth dollars pass to heirs income-tax-free. The comparison is your current rate versus your heirs’ future rate.

Can I convert $1 million to a Roth all at once, and what would the tax bill be?

There is no dollar cap, so a $1,000,000 conversion in one year is allowed, but the full amount is taxed as ordinary income that year, which for most owners means paying at top federal rates plus any state tax. Spreading the same $1M across several low-income years through bracket-filling generally holds the average rate lower than a single-year conversion.

Sources

• IRS, Retirement plan and IRA required minimum distributions FAQs; final regulations, Internal Revenue Bulletin 2024-33 (T.D. 10001), 2024.
• IRS, Publication 590-B, Appendix B, Uniform Lifetime Table, 2025.
• IRS, Publication 590-A and Retirement plans FAQs regarding IRAs, 2025.
• IRS, Instructions for Form 8606, 2025.
• IRS, Notice 2025-67 (2026 retirement plan limits and QCD amount).
• CMS, Fact Sheet: 2026 Medicare Parts A and B Premiums and Deductibles, cms.gov, November 14, 2025.
• SECURE 2.0 Act of 2022, Sections 107 and 325; SECURE Act of 2019 (10-year inherited-IRA rule).