Case Study: Strategic Roth Conversions Before RMDs
📘 Case Study: Strategic Roth Conversions Before RMDs
Clients: John (63) and Lisa (61)
Location: Wilmington, NC
Retirement Status: Planning to retire in 2 years
🧑🤝🧑 Profile: John and Lisa are active travelers looking forward to a flexible retirement lifestyle.
💥 Before: Concerned About a Tax Explosion in Retirement
🌤️ After: A Clear, Tax-Smart Roadmap with Peace of Mind
🔍 The Problem: Tax Traps Ahead
John and Lisa had saved consistently, but nearly all their wealth sat in pre-tax retirement accounts. Without a withdrawal plan, they faced significant Required Minimum Distributions (RMDs) beginning at age 73—creating a looming spike in taxes, Medicare IRMAA penalties, and stress. They weren’t sure how to avoid these surprises.
“We thought saving was the hard part. We didn’t realize getting money out could be so costly,” said John.
💡 The Strategy: Roth Conversions in the Retirement Sweet Spot
- Withdrew from brokerage accounts early to keep taxable income low
- Executed annual Roth conversions within the 22% bracket while retired but before RMDs
- Delayed Social Security to age 70 for larger, tax-advantaged benefits
- Used tax-loss harvesting to offset taxable gains in brokerage accounts
✅ The Results: Freedom Without Penalties
- Slashed their projected lifetime tax bill by over $120,000
- Avoided all IRMAA surcharges
- Built a growing, tax-free Roth bucket for future flexibility
- Smoothed income over time to avoid costly RMD spikes
🗣️ Client Review via Wealthtender
“Brett is professional, personable and extremely knowledgeable. We now have a clear tax plan that has given us peace of mind.”
💬 What Could a Tax-Smart Retirement Look Like for You?
You've seen how thoughtful planning helped others reduce taxes, avoid costly Medicare penalties, and leave a smarter legacy. Now it’s your turn. Let’s build a strategy that puts you in control — with more clarity, more confidence, and fewer surprises.
Brett Tushingham
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