The Line My Accountant Drew on a Napkin

My accountant drew a line on a napkin last March. Slid it across the table and said, “You see this gap? That’s where the money is.”

He’d sketched my tax bracket over time — a rough line, not art. It dipped after I stopped working full-time. Then it spiked back up at 73.

“That dip,” he said, “is the most valuable window in your financial life. And most people sleep right through it.”

He was talking about Roth conversions. I’d heard the term. Never paid much attention. Figured it was something for younger people building wealth.

I was wrong.

Here’s the setup. You’ve been saving in a traditional IRA or 401(k) for decades. Every dollar went in pre-tax. Felt great at the time. But every dollar coming out gets taxed as regular income.

At 73, the IRS says you have to start pulling money out. Required minimum distributions — RMDs. The amount depends on your balance and your age. If you’ve saved well, those forced pulls can be large. And they stack on top of Social Security.

That’s when your tax rate jumps. Sometimes into a bracket you haven’t seen since you were earning a full salary.

But between when you stop earning that salary and when RMDs kick in, your taxable income might be the lowest it’s been in decades. That’s the window. And it’s the perfect time to move money from your traditional IRA into a Roth.

You pay the tax now, at the lower rate. The money grows tax-free from that point on. And Roth accounts have no RMDs. Ever.

Most people overestimate what they’d owe. Here’s why.

In 2026, a married couple gets a $32,200 standard deduction. That means the first $32,200 of income is tax-free. After that, the first $24,800 is taxed at just 10%. The next chunk — up to about $100,000 — is taxed at 12%.

So a married couple with $80,000 in taxable income is paying an effective rate around 9 to 10%. Not 22%. Not 24%. Single digits.

If you’re in that zone, every dollar you convert to Roth costs pennies compared to what it’ll cost later.

When RMDs push your income above $200,000, those dollars get taxed at 22% or 24%. You might also trigger Medicare premium surcharges. More on that in a minute.

Let’s say you’re married. You’ve got $800,000 in traditional IRAs. Right now your only income is Social Security — about $50,000 combined.

After the standard deduction, your taxable income is roughly $18,000. You’re deep in the 10% bracket with a lot of room above you.

You could convert $80,000 from your traditional IRA to a Roth. That brings total taxable income to about $98,000 — still inside the 12% bracket. Tax on that conversion: roughly $9,600.

That’s real money. But here’s the other side.

If you do nothing, that $80,000 stays in the traditional IRA. It grows. At 73, the IRS forces it out — likely at 22% or 24%. That same money now costs you $17,600 to $19,200 in taxes. Plus it might bump your Medicare premiums.

Pay now: $9,600. Pay later: up to $19,200. Same money. Different decade. Different bill.

And that math gets better the more years you have in the window.

There’s a catch worth knowing before you start.

Medicare sets your premiums based on income from two years ago. In 2026, they look at your 2024 return. The first surcharge kicks in at $218,000 for a married couple. It’s called IRMAA, and it’s a cliff — one dollar over the line and you pay the full surcharge.

If a big Roth conversion pushes your income past that line, you could pay hundreds more per month in Medicare premiums.

The fix is simple: convert in chunks, not all at once. Stay below the IRMAA line. Spread it over three, four, five years. This isn’t a one-year move. It’s a multi-year strategy.

Don’t walk into this blind. Here’s the order I’d follow.

First, know your number. Pull up last year’s tax return. Look at your adjusted gross income. That’s your starting point.

Second, figure out how much room you have. Subtract your current income from the top of the 12% bracket — roughly $100,000 for married filing jointly in 2026. That gap is your conversion space.

Third, check the IRMAA line. For married couples in 2026, it’s $218,000. Don’t cross it unless you’re okay paying higher Medicare premiums for a year.

Fourth, talk to your CPA before you convert. Not after. Roth conversions can’t be undone. Once the money moves, the tax is owed.

Fifth, do this every year you’re in the window. Not once. Every single year between now and when RMDs start.

I asked him why nobody had told me this before.

He shrugged. “It doesn’t make anybody a commission. There’s no product to sell. It’s just good planning. And most people don’t want to pay taxes a minute sooner than they have to.”

That’s the problem. Paying taxes now feels wrong. Every instinct says delay. But this is one case where paying early saves real money — and keeps your income from getting shoved into a higher bracket when you can’t control it.

The napkin’s still in my desk drawer. I look at it every January when I decide how much to convert.

The window’s open. It won’t be forever. Talk to your accountant.

— Walter