Roth Conversion Schedule: Lump Sum vs. Multi-Year Plan

The question every pre-retiree with a large traditional IRA eventually asks: should I convert everything at once to get it behind me, or spread it over the full golden window? The tax math almost always favors a disciplined multi-year schedule — not because of preference, but because of how tax brackets and IRMAA thresholds interact. Here's how to build a realistic conversion schedule, and what it actually costs to deviate from it.

Why front-loading is usually the wrong move

Suppose Frank and Linda are both 67 (born 1959), recently retired, with $2 million in a traditional IRA and no other income yet — they're deferring Social Security to age 70. Their RMD age is 73. That gives them a six-year conversion window.

If they panic-convert $800,000 in year one to "get it over with," here's what happens:

• Taxable income: $800,000 minus $35,500 standard deduction (MFJ, both 65+) = $764,500¹
• Federal tax: dollars above $512,450 are taxed at 35% (not the 22% they wanted). Total tax: approximately $205,000 at an effective rate of 25.6%
• MAGI: $800,000 — well above every IRMAA tier. Medicare surcharges for both spouses for the two years following that return add another $33,000+ in Part B and Part D IRMAA costs²
• Combined tax and IRMAA cost on $800K: roughly $238,000

Now compare the bracket-aware alternative: converting $218,000 per year for six years — filling the 22% bracket and staying just below the IRMAA Tier 1 threshold of $218,000 MAGI.²

• Taxable income per year: $218,000 − $35,500 = $182,500 (in the 22% bracket, below the $211,400 ceiling)¹
• Federal tax per year: approximately $29,600 — an effective rate of ~13.6% on the conversion amount
• IRMAA: zero — MAGI stays below the $218,000 Tier 1 threshold
• Six-year total tax: approximately $177,400

The multi-year approach on the same $800K (approximately, ignoring IRA growth) costs about $60,000 less — purely from bracket and IRMAA management. That's the structural case for spreading conversions.

Why you shouldn't stretch it too thin either

The opposite error is converting too little each year — say, $50,000 — while the untouched IRA balance compounds at 6–7% annually. The IRA keeps growing faster than you're drawing it down, and you arrive at RMD age with a larger balance than you started with.

If Frank and Linda convert only $50,000/year over six years, they move $300,000 to Roth. Meanwhile, the remaining $1.7M+ grows to roughly $2.4M. Their year-1 RMD at 73: $2.4M ÷ 26.5 = $90,566.³ That stacks on top of Social Security and pushes them into IRMAA territory for the rest of their retirement.

The goal is filling the bracket every year — not just a little, not everything at once.

Five inputs for building your conversion schedule

A conversion schedule is a year-by-year table of how much to convert in each year of your window. To build one, you need five numbers:

1. Current traditional IRA balance — the total you're working with across all traditional IRAs and rollover IRAs (Roth IRAs and Roth 401(k)s are already tax-free and don't count).
2. Other income in each year of the window — pension, interest, dividends, rental income, part-time work. This income occupies bracket space before conversions. Social Security requires separate treatment: once it starts, the SS taxation formula quietly adds to your effective tax rate (see the Social Security guide).
3. Your IRMAA ceiling — the MAGI level above which you'd enter IRMAA Tier 1 ($218,000 MFJ / $109,000 single in 2026).² Your ceiling = IRMAA threshold minus other MAGI (including full SS benefit once it starts, since MAGI for IRMAA purposes includes untaxed Social Security).
4. Target rate — the bracket you're comfortable filling. Most people in the golden window target 22% or 24%, comparing that to their projected rate on future RMDs (often 32% or higher when SS and large RMDs stack).
5. Window length — years from now until RMDs begin (age 73 if born before 1960; age 75 if born 1960 or later, per SECURE 2.0 § 107).⁴

Your annual conversion target is the minimum of: (a) the room left in your target bracket after other income, and (b) your IRMAA ceiling minus other income. The binding constraint changes year to year as your other income changes — especially in the year Social Security starts.

What the schedule actually looks like: Frank and Linda's plan

Back to our example. With the five inputs mapped out:

Three years at $218K = $654,000. Three years at $130K = $390,000. Total converted: ~$1,044,000 before RMDs begin at 73.

Remaining IRA balance (assuming 6% annual growth on the unconverted portion): approximately $1.1–$1.2M. Year-1 RMD: $1.15M ÷ 26.5 ≈ $43,400 — far below IRMAA territory. Compare to the no-conversion path: $2M at 6% for 6 years = $2.84M, yielding a year-1 RMD of $107,170 — well above the $218,000 IRMAA tier 1 threshold once stacked with Social Security.

When to recalibrate

A conversion schedule isn't a "set it and forget it" plan. Revisit it every year because these inputs change:

• Tax law changes. Brackets, standard deductions, and IRMAA thresholds are adjusted annually for inflation. The OBBBA (July 2025) made several changes permanent but future Congresses can still alter rates.
• IRA performance. A strong market year means your IRA grew faster than expected — consider a larger conversion to stay on track. A down year is actually an opportunity: you convert the same number of shares for a smaller tax bill (your taxable income is lower), and those shares can recover inside the Roth tax-free.
• Other income surprises. A consulting contract, a large capital gain, or an early pension start narrows your bracket room for that year — convert less and carry the space forward.
• IRMAA lookback timing. If you had an unusually high-income year two years ago, you may already be in an IRMAA tier regardless of conversions. Account for the pre-existing surcharge when calculating the marginal cost of additional conversions this year.

Three cases where the math changes

Short window (2–3 years to RMDs): With limited runway, you may need to accept higher marginal rates to convert a meaningful amount. A 24% conversion (avoiding a projected 32% RMD rate) still saves money — the rate differential holds even at a higher current rate. Crossing an IRMAA tier may also be justified if the conversion math clearly wins. Use the IRMAA break-even framework to evaluate.

Down market year: This is the rare case where front-loading makes sense — not all at once, but converting more than your usual ceiling when IRA values have dropped. You're moving more shares for the same tax dollars, and those shares recover inside the Roth. This is the market-timing argument for accelerating conversions, and it's legitimate when applied to a single down year (not as a prediction of future markets).

One-time low-income year: A year with unusually low income — layoff, sabbatical, major deductible expense, charitable deduction from a large non-cash gift — creates temporary bracket room. It's worth evaluating a larger conversion in that specific year and returning to your baseline pace in subsequent years.