Pay Taxes Now｜Pay Less Later

Why pay taxes now when you can wait? Most people say, “The later, the better.” But smart retirement tax planning looks beyond today’s bill to tomorrow’s rate.

Mindy Ying says the goal isn’t the lowest tax bill today—it’s lower taxes over a lifetime.

Paying some tax during lower-income years could create greater tax-free flexibility later.

Pay Now｜Withdraw Tax-Free

A Roth conversion moves part of the assets in a Traditional IRA, SEP IRA, pretax 401(k), or other tax-deferred retirement account into a Roth IRA.

Mindy Ying explains that a Roth conversion triggers ordinary income tax today—but assets can grow tax-free, qualified withdrawals are federally tax-free, and original owners face no lifetime RMDs.

A Roth conversion does not erase taxes—it changes when they are paid. Paying tax at a lower rate today may create tax-free income and greater financial flexibility tomorrow.

Converting may not make sense during peak earning years if tax rates are expected to fall in retirement.

But if today’s rate is lower and future RMDs could push income into a higher bracket, a conversion may be worth considering.

Early Retirement｜Golden Window

With paychecks gone and Social Security and RMDs not yet started, early retirement can offer a prime low-tax window.

Ying says this can be an ideal time to consider a Roth conversion. Without action, a Traditional IRA may continue growing, leading to larger RMDs—and higher taxable income—even if spending remains unchanged.

She offers a simple example: A retired couple has $1.4 million in a Traditional IRA and $140,000 in taxable income after deductions. For 2026, the 22% federal tax bracket for married couples filing jointly tops out at $211,400.

Converting $60,000 to a Roth IRA would raise their taxable income to $200,000—still within the 22% bracket—and add about $13,200 in federal income tax.

If that same $60,000 later falls into the 24% bracket, the tax would be about $14,400. The $1,200 difference is only part of the story: Qualified Roth withdrawals can be federally tax-free, while a smaller Traditional IRA balance may reduce future RMDs.

Ying emphasizes that this is a simplified example. Actual results depend on future tax rates, investment performance, withdrawal timing, state of residence, and the household’s overall financial picture.

Convert Gradually｜Control Brackets

A Roth conversion is not an all-or-nothing decision. A common strategy is to estimate taxable income each year, then make partial conversions using the remaining room within a target tax bracket.

More can be converted in a lower-income year. If a home is sold, capital gains are realized, or other income rises the following year, the conversion can be reduced or paused. Adjusting annually helps prevent an income spike while preserving flexibility.

Before converting, check the ripple effects. A large conversion could push income into a higher tax bracket, make more Social Security taxable, raise capital gains taxes, and increase Medicare Part B and Part D premiums two years later.

Once RMDs begin, the year’s RMD must be taken first—it cannot be converted. And a Roth conversion generally cannot be undone, even if markets fall, income estimates miss the mark, or the tax bill exceeds expectations.

Lifetime Taxes｜Total Picture

Before converting, Ying says to ask four questions: What’s my tax rate today? Could future RMDs push it higher? What happens if one spouse dies and the survivor files alone? Can outside funds cover the tax?

A Roth conversion may pay off when today’s rate is lower, tax-deferred balances are large, and outside cash can cover the bill. It may not when income is near its peak or the conversion would sharply raise Medicare premiums and other taxes.

In short, there is no one-size-fits-all Roth conversion. The right move depends on cash flow, tax rates, age, account mix, and retirement withdrawal strategy.

The real question is not how much more tax a conversion creates today, but whether paying that tax now can secure a lower rate, smaller RMDs, and greater flexibility tomorrow.

Ying’s advice: Don’t just ask, “How can I pay less tax this year?” Ask, “When should I pay tax to preserve more after-tax wealth over my lifetime?”（Column 3 of 6）

* For educational purposes only—not investment, tax, or legal advice. Tax laws and individual circumstances vary; consult a qualified professional.

---

Tax Quick Guide : 

Roth Conversion

Moving funds from a Traditional IRA, pretax 401(k), or another tax-deferred account into a Roth IRA. Untaxed amounts are generally treated as ordinary income that year; qualified future withdrawals are federally tax-free.

Tax Bracket

A tax-rate range based on taxable income. Under the U.S. progressive system, only income within a higher bracket is taxed at that higher rate—not all income. Before a Roth conversion, estimate how much room remains in your current bracket.