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The Retirement Tax Trap Most People Don't See Coming
You saved diligently in your 401(k) and IRA for decades. But the IRS has been a silent partner the whole time — and at age 73, they're going to demand their cut whether you're ready or not.
What Is a Roth Conversion — and Why Does It Matter Right Now?
A Roth conversion simply means moving money from a tax-deferred account — like a traditional IRA or 401(k) — into a Roth IRA, where it grows tax-free and can be withdrawn tax-free in retirement.
Why now? Because most people in their 50s and 60s are sitting in a rare opportunity window: their income may be lower than it was during peak earning years, and required minimum distributions (RMDs) haven't kicked in yet. Tax rates are currently relatively low by historical standards. And the SECURE 2.0 Act has reshuffled the rules around retirement accounts in ways that make proactive planning even more valuable.
If you wait until your RMDs hit at age 73 — or you inherit an IRA and suddenly need to withdraw the whole thing in 10 years — you may find yourself in the highest tax bracket of your life, with no control over when or how much you pay.
The Window Most Retirees Miss
Here's the window: many retirees find themselves between ages 60 and 72 with income that's lower than their peak earning years — but before Social Security and RMDs force income (and taxes) back up.
During this gap, your tax rate may be lower than it will ever be again. That makes it an ideal time to convert pre-tax retirement money to Roth — paying taxes now at a lower rate, so you never have to pay taxes on that money again.
At Imprimis Wealth, we build a conversion schedule specifically designed to fill your lower tax brackets efficiently — without pushing you into a bracket you don't need to be in.
See What a Roth Conversion Strategy Could Save You
Most retirees leave hundreds of thousands of dollars in unnecessary taxes on the table — not because they made bad investments, but because they had no plan.
We offer a complimentary Roth Conversion Analysis — a personalized review of your current accounts, projected tax liability, and the potential savings a conversion strategy could deliver over your lifetime.
No obligation. No pressure. Just a clear picture of what's possible.
Schedule your complimentary Roth Conversion Analysis today — and find out exactly what a coordinated conversion strategy could save you.
See What a Roth Conversion Strategy Could Save You
Most retirees leave hundreds of thousands of dollars in unnecessary taxes on the table — not because they made bad investments, but because they had no plan.
We offer a complimentary Roth Conversion Analysis — a personalized review of your current accounts, projected tax liability, and the potential savings a conversion strategy could deliver over your lifetime.
No obligation. No pressure. Just a clear picture of what's possible.
Schedule your complimentary Roth Conversion Analysis today — and find out exactly what a coordinated conversion strategy could save you.
Legal Disclaimer
Investment Advisory Services offered through Foundations Investment Advisors, LLC, a SEC Registered Investment Advisor. Imprimis Wealth and Foundations Investment Advisors, LLC are not affiliated. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
This information is designed to provide general information on the subjects covered. It is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement. Please note that Imprimis Wealth and its affiliates do not give legal or tax advice. You are encouraged to consult your tax advisor or attorney.
A Roth conversion is a taxable event. Converting pre-tax retirement savings to a Roth IRA will trigger ordinary income taxes in the year of conversion. Past performance does not guarantee future results. Consult your financial professional before making any investment decision.
Is a Roth Conversion Right for You?
A Roth conversion strategy works best for people in a specific situation. Here's a quick checklist — if several of these apply to you, a conversion plan could significantly reduce your lifetime tax bill:
✓ You have $250,000 or more in tax-deferred accounts (traditional IRA, 401(k), 403(b), etc.)
✓ You are between ages 55 and 72 — still in the window before RMDs begin
✓ Your current income is lower than it will be once Social Security and RMDs kick in
✓ You want to leave a tax-efficient inheritance for your children or heirs
✓ You are concerned about rising tax rates in the future and want to lock in today's rates
✓ You are paying more in Medicare premiums (IRMAA) than you'd like — and RMDs will make it worse
If you checked three or more of these boxes, you likely have an opportunity to reduce your retirement tax burden — and the sooner you start, the more effective the strategy will be.
Schedule a complimentary Roth Conversion Analysis and we'll show you exactly what a conversion strategy could save you over your lifetime.
A Real Example of How This Works
Meet John and Mary, both 64, retired with $1.2 million in traditional IRAs and a pension of $3,200/month. They came to us worried about running out of money — but their bigger problem was the tax time bomb sitting in their accounts.
Here's what their situation looked like before we worked together:
• Projected RMDs starting at 73: $65,000+/year — pushing them into the 22% bracket
• Social Security (delayed to 67): $4,800/month combined — 85% taxable once RMDs kick in
• Estimated lifetime tax liability: $340,000+
Here's what a 7-year Roth conversion strategy changed:
• We converted $40,000–$55,000/year during ages 64–72, staying within the 12% bracket
• Their projected RMDs dropped by 60%, keeping their retirement income tax-efficient
• Medicare surcharges (IRMAA) were avoided entirely
• Estimated lifetime tax savings: $180,000–$220,000
John and Mary didn't change their lifestyle. They didn't take more risk. They simply had a plan — executed systematically, year by year.
This is what we do for our clients at Imprimis Wealth.
Our Approach: Roth Conversions as Part of a Coordinated Plan
We don't simply recommend a Roth conversion — we build a coordinated, multi-year strategy around it. Here's what that looks like in practice:
• Multi-year conversion schedule designed to fill lower tax brackets. Rather than converting a large lump sum in one year (and spiking your taxes), we spread conversions over several years to minimize your total lifetime tax bill.
• Social Security timing optimization. The year you claim Social Security has a major impact on how much of your income is taxable. We coordinate your conversion strategy with your optimal Social Security start date.
• Tax bracket analysis and projection. We model your current and future income — including RMDs, pension, Social Security, and investment income — to identify exactly how much to convert each year without crossing into a higher bracket.
• Estate planning alignment. We ensure your Roth conversion strategy integrates with your overall estate plan, including beneficiary designations and trust structures, so your heirs inherit tax-efficiently.
• Ongoing monitoring and adjustment. Tax laws change. Life changes. We review your conversion strategy annually and adjust as needed — so you're never locked into a plan that no longer fits.
The Hidden Costs of Waiting
Most retirees assume they'll deal with taxes "when the time comes." But by then, the window to act has closed. Here's what waiting actually costs you:
• You pay taxes at RMD-time rates — not your choice. When the IRS forces withdrawals starting at age 73, your income spikes whether you need the money or not. You could find yourself in the 22%, 24%, or higher bracket with no flexibility.
• Your heirs may inherit a fully taxable IRA. Under current law, non-spouse beneficiaries must withdraw inherited IRAs within 10 years — often during their peak earning years. A $500,000 IRA can become a $150,000–$200,000 tax bill for your children.
• Medicare premiums (IRMAA) can spike with RMDs. Higher income from RMDs can trigger Medicare surcharges that cost an extra $1,000–$5,000+ per year per person — a hidden tax most people never see coming.
• Social Security taxation increases with higher income. Up to 85% of your Social Security benefit can become taxable when your income rises. RMDs push many retirees into this trap unnecessarily.