We are executing a Roth conversion strategy before they reach age 73, the age at which they must begin taking Required Minimum Distributions (RMDs). Roth conversions reduce future RMDs while also diversifying some pre-tax IRA dollars to Roth, which provides flexibility to tax-efficiently access retirement account assets in the future. In addition, we expect this to minimize the lifetime tax bill for their daughter when she eventually distributes their inherited IRA after they pass.

When executing this strategy, we maximized their net worth by growing their investment accounts and minimizing the family’s lifetime tax liability, potentially saving hundreds of thousands dollars in taxes over their lifetimes. We also understand how one strategy can affect other aspects of their financial plan, so we did this while staying below relevant IRMAA Medicare premium thresholds so they don’t unnecessarily pay too much.

Each year, we re-run the calculations to determine the amount of the annual Roth conversion to ensure their marginal tax rate and IRMAA Medicare premiums stay within our annual targets.

Dan and Lola have their $5,000,000+ life-savings managed by MWA and are happy to pay annual fees of over $40,000 since just this one strategy could save their family over $600,000 in taxes.