Advanced Roth Conversion Tactics for High Earners: Partial, Multi-Year, and Bracket-Balancing Strategies

If you’re a high earner with a substantial traditional IRA or 401(k), you’ve probably heard about Roth conversions. But here’s what most people get wrong: they think it’s an all-or-nothing decision: Convert everything now or do nothing at all.

Converting too much in a single year can push you into a higher tax bracket, trigger Medicare premium surcharges, and create a cash flow crunch you weren’t expecting. The more thoughtful approach often involves strategic partial conversions spread across multiple years.

Let me walk you through how this works and why it matters for your retirement planning.

Understand how tax brackets work with conversions

Our tax system is progressive. Not all your income gets taxed at the same rate. When you convert money from a traditional IRA to a Roth IRA, that conversion amount gets added to your taxable income for the year. The trick is figuring out exactly how much room you have before hitting the next bracket.

For 2025, the federal tax brackets range from 10% to 37%. A married couple filing jointly stays in the 22% bracket until their taxable income exceeds $206,700. After that, they jump to 24% until $394,600.

Here’s a practical example. Let’s say you and your spouse have $150,000 in taxable income this year. You have $56,700 of room before you hit the 24% bracket. That’s your conversion sweet spot. You could convert up to $56,700 from your traditional IRA to a Roth IRA and pay just 22% in federal taxes on that amount.

Convert $100,000 instead? The first $56,700 is taxed at 22%, and the remaining $43,300 is taxed at 24%. You’ve just unnecessarily increased your tax bill.

The power of multi-year conversion strategies

Here’s where things get interesting. Instead of converting a large sum all at once, you can spread conversions across multiple years. This approach is sometimes called a systematic Roth conversion plan.

Consider this scenario. You have $500,000 in a traditional IRA. Converting it all in one year would push you well into the 32% or even 35% bracket. But if you convert $75,000 per year over six or seven years, you might keep most of that conversion amount in the 22% or 24% bracket.

The math can be dramatic. Using the example above, a full $500,000 conversion in a single year could result in a federal tax bill of roughly $150,000 or more. Spread it out over seven years at $71,000 per year, staying within the 22% bracket, and your total federal tax on those conversions drops to around $109,000. That’s a potential savings of $40,000 or more.

This strategy works exceptionally well during what financial planners call the “gap years.” These are the years between when you retire and when you start taking Social Security and Required Minimum Distributions. Your income is often lower during this window, creating a prime opportunity for tax-efficient conversions.

Bracket-balancing: the art of filling up without spilling over

Bracket-balancing, sometimes called bracket-filling, involves converting just enough each year to reach the top of your current tax bracket without crossing into the next one. It requires some planning, but the results are worth it.

The process works like this. First, estimate your taxable income for the year. Include your salary, investment income, pension payments, Social Security benefits, and any other sources. Then, calculate how much space remains between your projected income and the top of your current bracket. That’s your conversion budget for the year.

Timing matters. I recommend waiting until late in the year, often November or December, before executing a conversion. By then, you have a clearer picture of your total income. You’ll know about any unexpected bonuses, capital gains from fund distributions, or other surprises that could affect your calculations.

Some clients ask about filling up the 24% bracket in addition to the 22% bracket. The jump from 22% to 24% isn’t as dramatic as the leap from 24% to 32%. For high earners who expect their future tax rates to be elevated, filling up the 24% bracket can make sense. It’s situational and depends on your specific goals.

Watch out for IRMAA: the hidden Medicare cost

Here’s a trap that catches many high earners off guard. Medicare premiums increase based on your income through something called the Income-Related Monthly Adjustment Amount, or IRMAA.

For 2025, the first IRMAA threshold is $106,000 for single filers and $212,000 for married couples filing jointly. Cross that line by even one dollar, and your Medicare Part B and Part D premiums jump. The surcharge for the first tier is about $1,050 per person per year.

What makes this tricky is the two-year lookback. Your 2025 Roth conversion affects your 2027 Medicare premiums because IRMAA is based on your income from two years prior. If you’re approaching age 63, you need to plan your conversions carefully to avoid triggering higher premiums right when you enroll in Medicare.

The good news? Roth IRA distributions don’t count toward IRMAA calculations. So, while the conversion itself creates income, your future withdrawals from the Roth account won’t trigger premium increases.

Why now might be the right time

The tax landscape changed with the One Big Beautiful Bill Act, signed into law on July 4, 2025. This legislation permanently extended the individual tax provisions of the Tax Cuts and Jobs Act, including the current tax bracket structure (10%, 12%, 22%, 24%, 32%, 35%, and 37%), the higher standard deduction, and the increased estate and gift tax exemption. Before this, many planners were rushing to complete conversions before a potential 2026 rate increase.

Even with rates stabilized, Roth conversions remain a valuable planning tool. Tax rates could change again under future legislation. Your personal circumstances might shift. And the certainty of tax-free growth in a Roth account has real value.

There’s also an estate planning angle. Beneficiaries who inherit a traditional IRA must take distributions within 10 years under current rules. Those distributions are taxable. But beneficiaries who inherit a Roth IRA get tax-free distributions. By paying the tax now, you’re removing that burden from your heirs.

Putting it all together

A well-executed Roth conversion strategy requires careful coordination. You need to consider your current income, future income projections, tax bracket thresholds, IRMAA limits, and long-term goals. It’s not a set-it-and-forget-it decision. It requires annual review and adjustment.

The best results typically come from a multi-year approach with partial conversions that fill up your lower tax brackets without creating unnecessary tax liability. The goal isn’t to convert as much as possible. The goal is to convert the right amount at the right time.

This is the kind of planning that benefits from professional guidance. A financial advisor who understands your complete picture can help you model different scenarios and find the optimal path forward. The tax savings and Medicare premium avoidance can be substantial.