If you've saved a million dollars or more in pre-tax retirement accounts and you still haven't made a decision on Roth conversions, this article is for you.

You may have heard that most retirees should not convert to Roth. And for most retirees, that's right. Most people should never convert a single dollar.

But that advice was built for the average retiree. At a million-plus, following it is what quietly locks in the six-figure tax bill you were trying to avoid.

There are three types of retiree who should be looking hard at a Roth conversion in retirement — and if you're one of them, doing nothing is itself a decision. Once required distributions begin, this window closes for good.

I'm Daniel Masuda Lehrman, a Certified Financial Planner® and founder of a fee-only fiduciary financial planning firm here in Honolulu. Everything here is education rather than individualized advice, and the specific numbers depend on your return — so run yours with your CFP® and CPA before you act on any of it.

Let's find out whether you're one of the three.

What We'll Cover

• First — why most retirees genuinely shouldn't convert
• Profile one — the Forced-Income Couple
• Profile two — the Survivor-in-Waiting
• Profile three — the Legacy-Leaver

Profile two is the one advisors mention least and the one where the math is most brutal. Let's get into it.

Why Most Retirees Shouldn't Do a Roth Conversion

To oversimplify, the decision comes down to one comparison: your tax rate today versus your tax rate later. If your rate today is higher than your rate later, converting means voluntarily paying more taxes. And most American retirees are in exactly that situation.

The median retirement savings for households aged 55 to 64 is about $185,000, according to the Federal Reserve's Survey of Consumer Finances.

And the 2026 code is generous to that retiree. A married couple both 65 or older gets a $32,200 standard deduction, plus $1,650 each for being over 65, plus the new $6,000-per-person senior deduction that runs through 2028. Stack those and they can shield $47,500 of income before a single bracket applies.

If your retirement income lives inside the standard deduction, converting today at 22% to avoid a future potential rate of zero is one of the worst deals in personal finance.

But all of that rests on one assumption: that your income drops in retirement.

At a million-plus in pre-tax accounts, that assumption doesn't always hold up. Your future rate doesn't fall. It stays where it is, or it goes up.

And remember that senior deduction phases out. For a married couple it starts shrinking at $150,000 of income and disappears entirely at $250,000. The deduction built to protect the median retiree is specifically withdrawn from the retiree this article is about.

Here's who that hits hardest.

Profile 1 — The Forced-Income Couple

A million or more in pre-tax accounts, plus a pension or a strong Social Security benefit, or both. Your guaranteed income already covers most of your lifestyle before you touch the portfolio.

That's the trap. Your pre-tax accounts aren't income you're living on. They're income you're deferring. And the IRS has a deadline on that deferral.

At 73 — or 75 if you were born in 1960 or later — required minimum distributions begin. The government forces money out of those accounts whether you need it or not, and it stacks on top of your pension and Social Security.

Running the Numbers on a $1.5 Million IRA

Here's the math on a hypothetical couple. Say you're 73 with $1.5 million in a traditional IRA. The IRS Uniform Lifetime Table divisor at 73 is 26.5, so your first RMD is about $56,600. Add a $40,000 pension and $50,000 in combined Social Security.

Now watch what that actually does.

Up to 85% of Social Security is taxable, so call that $42,500. Your income lands near $139,000. Subtract the deductions we just talked about and your taxable income is roughly $91,600.

That's still the 12% bracket — the 22% doesn't start until $100,800 for a couple in 2026.

So is the sky falling? No. And that's the point I want to make.

You are about $9,000 from the 22% bracket, and the gap closes on its own over time. The RMD is a percentage of a growing balance, and the divisor keeps shrinking, so you're forced to take a bigger slice of a bigger number every single year, with no decision required from you.

For most workers, retirement is when tax rates finally drop. For you, today is the lowest rate you will ever see again.

And at higher balances it isn't a slow creep. On $2.5 million with a $60,000 pension, the first RMD alone is roughly $94,000, and the couple lands in the 22% bracket immediately, within striking distance of the Medicare surcharge thresholds — which begin at $218,000 for a couple in 2026.

Those surcharges run on a two-year lookback. Your 2026 Medicare premium is set by your 2024 tax return. So a conversion you do this year shows up in your premium two years from now — which means this has to be planned forward, not reacted to.

If this is you, here's what to be thinking about: the post-retirement, pre-RMD period is the most valuable window you will ever see. Consider filling your bracket deliberately, often to the top of the 22% and sometimes into the 24%, to shrink that balance before the RMDs kick in. If the idea of choosing to pay tax early still feels backwards, it's worth reading when paying more taxes can make sense.

Profile 2 — The Survivor-in-Waiting

This one applies to every married couple reading. It's the widow's penalty.

Right now you file jointly. Big standard deduction, wide brackets, high surcharge thresholds. But one of you will pass away first. A year or two after, the survivor files as a single individual.

The pension may continue. The larger Social Security check continues. The IRA still generates distributions. Income barely drops. But the tax structure changes dramatically.

How the Brackets Cut in Half

Look at 2026. A couple's standard deduction is $32,200; a single filer's is $16,100 — exactly half. The 24% bracket starts at $211,400 for a couple and $105,700 for a single — again, essentially half. The first Medicare surcharge tier is $218,000 for a couple and $109,000 for a single.

So the survivor lives on nearly the same income while every tax threshold that protected it collapses. Dollars taxed at 12% as a couple get taxed at 22% alone. And this can last a decade or more.

Meet Michael and Rita

Michael and Rita are both 70. Between a pension, Social Security, and IRA withdrawals they report about $130,000 a year. After deductions their taxable income is roughly $75,000. Comfortably in the 12%, nowhere near a surcharge.

Michael passes away first. Rita loses the smaller Social Security check, so her income drops to about $110,000.

Less income. Here's what happens to the tax on it.

Her standard deduction gets cut in half. Her senior deduction shrinks. And the same dollars that were taxed at 12% when they were a couple are now taxed at 22%, because the single brackets are half as wide.

So her income went down and her tax rate went up. For a household in this range that's commonly several thousand dollars more in federal tax every year — potentially for fifteen or twenty years — purely from a change in filing status.

She also ends up sitting a few thousand dollars under the Medicare surcharge cliff, with RMDs that grow every year. She won't stay under it.

One fair caveat: because those surcharges use a two-year lookback, the hit is delayed, and the death of a spouse is a qualifying life-changing event you can appeal with Form SSA-44. Worth knowing.

Here's what to do now: consider converting while you're both alive and filing jointly. That is the cheapest tax environment this household will ever have. Every dollar converted today at the couple's rate is a dollar the survivor doesn't pull out later at the single's rate — and Roth dollars have no required distributions and don't push the survivor toward the surcharge cliff at all.

Profile 3 — The Legacy-Leaver

This is for anyone planning to leave a traditional IRA to their children, especially successful kids in their 40s or 50s.

A pre-tax IRA is now one of the worst assets to leave a high-earning child, and most people don't know the rules changed in the last few years.

Beneficiaries of non-spouse IRAs used to stretch withdrawals across their own lifetime. Now the SECURE Act forces most non-spouse beneficiaries to empty an inherited IRA within 10 years — and under regulations effective in 2025, if you had already started your own required distributions, your beneficiary must also take a taxable distribution every year along the way.

A $2 Million IRA, Inherited at 52

A parent typically leaves an IRA to a child in that child's peak earning years. Their highest bracket ever. You're stacking several hundred thousand dollars of taxable income on top of that, compressed into ten years.

Say you leave a $2 million IRA to your daughter at 52, already in the 32% bracket. She has to drain it within ten years — roughly $200,000 of forced income a year on top of her salary, some of it likely pushing into the 35%. Across that decade, potentially $500,000 or more goes to the IRS at rates set by her income, not yours.

Compare the alternative. You spend your pre-RMD years converting at your rate — 22%, maybe 24%. She still empties the inherited Roth account in ten years, but every dollar comes out tax-free.

You converted a bill at her 32% into a bill at your 24%. It's not only less tax; it's often an expression of love to leave your family an inheritance free of tax burdens. If you're thinking through that side of it, here's more on how to prepare your loved ones to inherit assets.

Nobody spends forty years saving so that a third of it vanishes into their child's tax bracket the decade after they're gone. But by default, that's exactly what happens.

So Which One Are You?

Three profiles: the Forced-Income Couple, the Survivor-in-Waiting, the Legacy-Leaver.

And if you've been going back and forth on this for two years without deciding, you're not alone. This is genuinely hard to resolve on your own, because the answer depends on numbers that sit in four different places.

Here's what to notice. If you've saved a million-plus, you're probably not just one of these. A couple with a $1.5 million IRA and a pension is the first two automatically. Add children you'd like to leave something to and you're all three. That isn't an unusual case. That's the typical million-dollar household.

Which is why "don't convert" fails this particular audience. That advice was built for the retiree whose income disappears inside the standard deduction. That isn't you.

Two Ideas for Tackling Your Roth Conversion Strategy

1. Use the Window

The stretch between when you stop working and when Social Security and RMDs switch on is when your income is the lowest it will ever be. That's when conversions are cheapest, because you're moving money out at a rate you'll rarely see again. It may only be five to ten years wide, and when it closes, it closes.

2. Fill the Bracket

This is where people get timid and leave money on the table. On a million-plus balance, small conversions inside the 12% barely dent what's coming. Filling deliberately to the top of the 22%, sometimes into the 24%, is usually the move — because paying 24% by choice today beats paying 24% by force tomorrow on a bigger balance, with surcharges and the widow's penalty stacked on top.

Do you convert every dollar? Almost never. There's real value in leaving some pre-tax money behind to fill low brackets later and to absorb large medical deductions in your final years. It isn't "convert everything." It's "convert deliberately, to the right line, in the right window." Finding that exact line depends on your numbers, which is why this is a planning question and not a rule of thumb.

So let me give you the permission I think you're actually looking for.

Converting deliberately is not aggressive, and it isn't a bet on tax rates going up. It's the one point in this entire process where you get to choose the rate rather than accept one.

The Real Question Isn't Whether to Convert

You spent thirty or forty years climbing, and every skill that got you here was a climbing skill. Contribute, defer, let it grow. Deferring tax was the right answer for all of it.

The descent runs on a different rule. Now the money has to come out, and the only real question is who chooses the rate it comes out at.

For the million-dollar household, this was never a math trick. It's control. You deciding what rate you pay, in a window you choose, while the brackets are still wide — versus the government deciding for you later, on a bigger balance.

The forced income is coming. The widow's penalty is coming. The ten-year rule is already here.

So if you recognized yourself in even one of those profiles, understand what doing nothing actually is. It isn't caution. It's a decision to let someone else set your rate later, instead of setting it yourself now, while you still can.

You don't need certainty to act on this. You need a number and a deadline — and you already have the deadline.

Get a Set of Eyes on Your Own Numbers

If any of those three profiles sounded like you, this is worth getting right before the window closes.

If you'd like someone to look at your accounts, your brackets, and your timeline together, you can schedule a free consultation at masudalehrman.com/contact. I work with clients in Honolulu and virtually across the country. You can also start with the free Retirement Readiness Assessment to see where you stand before we talk.

— Daniel Masuda Lehrman, CFP®, Founder of Masuda Lehrman Wealth. Mahalo for reading.

This article is for educational purposes only and is not personalized financial, tax, or legal advice.