A myth-busting deep dive into timing, tax brackets, and legacy impact

When it comes to Roth conversions, most high earners either delay too long—or skip the strategy entirely—because of one major misconception:

“My tax bracket is too high for a Roth conversion to make sense.”

This mindset might seem rational, but in many cases, it’s dead wrong.

At Matthew James Tax & Wealth Management, we regularly work with successful physicians, executives, and business owners who are unknowingly setting themselves up for bigger tax bills down the road by avoiding strategic Roth conversions today.

Let’s dig into what they’re missing—and how you can turn Roth conversions into a powerful wealth-building and legacy-preserving move.

The Myth: “It’s smarter to wait until I’m in a lower tax bracket.”

Reality check: If you’ve built a significant pre-tax retirement balance—think 7 figures or more—you may never see that “lower” bracket in retirement.

Required Minimum Distributions (RMDs) can push your taxable income higher than expected, especially when combined with Social Security and other passive income. By the time you hit your 70s, your tax liability could balloon, leaving you with:

• A higher marginal tax rate than expected

• Increased Medicare premiums (thanks to IRMAA surcharges)

• A tax headache for your heirs when they inherit traditional IRA funds

Translation: Waiting might actually cost you more in the long run.

When Roth Conversions Do Make Sense for High Earners

Done right, a Roth conversion is a strategic tax acceleration—you’re intentionally paying tax now to avoid a worse hit later. But this isn’t about converting everything at once or triggering a huge tax bill.

We help high earners:

• Convert in calculated stages, aligned with their current and projected tax brackets
• Take advantage of “income valleys” [like the gap years between retirement and RMDs]
• Avoid bracket creep while minimizing overall tax drag
• Use Roth funds for tax-free growth and future tax-free withdrawals
• Leave a tax-free legacy to heirs [without forcing them to drain accounts within 10 years]
  
  
  

The Legacy Factor: It’s Not Just About You

One of the biggest Roth conversion benefits gets overlooked: intergenerational planning.

Under the SECURE Act, your non-spouse heirs must deplete inherited IRAs within 10 years—often during their highest-earning years. That means your pre-tax dollars could be taxed at their top rate.

By converting some of those dollars to Roth, you’re easing their future tax burden and giving them flexibility to grow wealth tax-free.

It’s a strategic move that protects your family’s financial future—not just your own.

Smart Roth Strategy in Action

Let’s say Dr. James, a 55-year-old surgeon, has $3.2 million in pre-tax retirement accounts. He plans to stop practicing at 60, delay Social Security, and use taxable assets to bridge the income gap.

Instead of waiting for RMDs at 73, we identify a 10-year Roth conversion window between ages 60–70. By converting $250,000–$300,000 per year during that time, he:

• Lowers his future RMDs and Medicare surcharges

• Stays in a reasonable tax bracket during conversion years

• Builds a $2M+ Roth balance that can grow tax-free for life

• Leaves a tax-free legacy to his kids, who are in their 40s and 50s
  
  

Final Thought: The Right Roth Move Isn’t Always Obvious

For high earners, Roth conversions are not about jumping in blindly. It’s about custom timing, bracket strategy, and long-term optimization.

If your CPA isn’t running multi-year tax projections, mapping out legacy impact, or weighing Roth vs. traditional withdrawals, you could be missing out on one of the most powerful tax planning tools available.

Curious if a Roth conversion strategy could save you [and your heirs] six figures?

Let’s run the numbers—without the guesswork. Schedule a complimentary meeting or call with us today.