Once required minimum distributions (RMDs) begin, most people have the same reaction:
Wait… I have to take this money even if I don’t need it?
It can feel frustrating. You’ve spent years carefully managing your income, and now the IRS is telling you when and how much to withdraw. Add the taxes that come with it, and RMDs can start to feel like a yearly annoyance rather than part of a thoughtful plan.
But here’s the good news: RMDs don’t have to be wasted income.
Because they’re predictable, they can actually become one of the more useful tools in your planning toolkit, especially when paired with Roth conversions.
Instead of treating your RMD as money you have to deal with, you can use it intentionally. For many retirees, that means using part of the distribution to help cover the taxes on a Roth conversion, while moving other retirement dollars into a Roth account that can grow tax-free.
It’s less about doing something fancy and more about making the most of money that was already coming out anyway.
A Simple Reframe: From “Forced Withdrawal” to “Funding Source”
Here’s what this strategy really looks like in everyday terms:
You take your RMD, just like you’re required to. That distribution shows up as taxable income. Instead of spending all of it or letting it quietly pile up in a bank account, you use some of that cash to pay the taxes generated by converting additional traditional IRA dollars into a Roth IRA.
Over time, this can help you slowly shift money from the “someday taxable” bucket into the “future tax-free” bucket - without having to come up with extra cash from somewhere else.
You’re not avoiding taxes. You’re choosing when and why you pay them.
Case Study: Turning An Annoyance into an Opportunity
Janet retired comfortably and quickly realized that his RMDs were more than she needed for day-to-day spending. Each year, the extra money landed in her checking account, increasing her taxable income without really improving her lifestyle.
Instead of letting that pattern continue, Janet decided to give those dollars a job.
She coordinated her RMDs with a gradual Roth conversion strategy, using part of the RMD cash to cover the taxes on converting additional IRA assets into a Roth account. Nothing drastic. No big one-year moves. Just steady, intentional steps.
Over time, a few helpful things happened:
- Her traditional IRA balance began to shrink
- Future RMDs became smaller and easier to manage
- Her Roth account grew, giving her more flexibility later
- Her overall plan felt calmer and more in control
For Janet, the biggest benefit wasn’t just the math; it was peace of mind. She wasn’t scrambling at tax time or wondering what to do with extra income. She had a plan for it.
And for her heirs, this approach quietly reduced the tax pressure they may face down the road under the 10-year rule.
Why This Works Best as a Long-Term Approach
This strategy isn’t about converting everything or trying to “beat” the tax system. It works best when it’s done gradually and thoughtfully.
Each year, the conversion amount can be adjusted based on:
- Your overall income
- Your tax bracket
- Cash flow needs
- Medicare considerations
- What the next few years are likely to bring
Think of it less like flipping a switch and more like turning a dial.
When RMDs are treated as part of a bigger picture - rather than a standalone pain in the rear - they can actually support flexibility, simplify future decisions, and reduce stress over time.
Thinking about using RMDs to support Roth conversions?
Before making any moves, it helps to slow down and make sure the pieces actually fit together.
Here’s a simple checklist to walk through first:
- Confirm when your RMDs start and how much they’ll be this year
- Review your current tax bracket and where additional income would land
- Identify how much cash flow you need versus what’s truly extra
- Estimate the tax impact of a Roth conversion before Medicare IRMAA is triggered
- Look at how future RMDs change if conversions are done gradually
- Consider how this affects your heirs under the 10-year rule
- Check with your tax advisor/CPA to help ensure you’re on the right track
If you’d like help walking through this checklist - or want a second set of eyes on the numbers - this is exactly the kind of planning conversation worth having. C. Beach Brown works with clients on exactly these kinds of coordinated planning decisions. CLICK HERE to make an appointment.