Retirement Accounts $500K-$1M: Roth Conversion Planning and Tax Efficiency

At this account balance level, strategic Roth conversions and withdrawal sequencing offer meaningful lifetime tax savings. The key is building a multi-year tax projection that models which accounts to draw from first and when conversions fit into lower-bracket years before RMDs begin.

RMDs become meaningful. At age 73, required withdrawals on this range run roughly $19,000 to $38,000 per year based on the Uniform Lifetime Table divisor. That's enough additional taxable income to push you into a noticeably higher bracket, especially combined with Social Security and any pension income.

Roth conversions are clearly worth evaluating. Converting $50,000-$100,000 per year over several years -- ideally in the gap between retirement and age 73 -- can save tens of thousands in lifetime taxes by keeping future RMDs (and the tax on them) permanently lower. The key is staying within your current bracket during conversion years.

Social Security timing matters here too. Delaying benefits allows you to draw down tax-deferred accounts in lower-income years, creating more room for Roth conversions. The strategies work together.

The tradeoff: You're in the sweet spot where professional planning pays for itself, but the CPA needs to do proactive multi-year modeling -- not just annual returns. Ask specifically whether they build multi-year tax projections and Roth conversion analyses.