The Roth Conversion “Bridge”

Spending From Your Roth IRA While Converting a Traditional IRA at Low Tax Rates

A retirement-income strategy from Propulsion Capital Management

For many retirees, the years between leaving work and the start of required minimum distributions (RMDs) are the most valuable tax-planning window of their lives — and the most commonly wasted. Income is low, the paycheck has stopped, and RMDs haven’t started yet. That combination opens a door: the chance to move money out of a tax-deferred traditional IRA and into a tax-free Roth IRA while paying tax in the lowest brackets you may ever see again.

The strategy below pairs two ideas. First, you fund your lifestyle primarily from your Roth IRA and Social Security, which keeps your taxable income artificially low. Second, you deliberately use that low-income space to convert a slice of your traditional IRA to Roth each year, “filling up” the bottom tax brackets on purpose. Done consistently across a decade, this can meaningfully shrink the traditional IRA before RMDs hit, reduce a lifetime of taxes, and leave a more tax-efficient estate.

But there’s a wrinkle that catches even careful planners off guard: Social Security itself is taxable, and the way it becomes taxable quietly eats into the very low brackets you’re trying to fill with conversions. Understanding that interaction is the difference between a good plan and an optimal one.

Why the window between 65 and RMDs is so valuable

A few features of current law make this period unusually attractive:

• RMDs start later than they used to. Under SECURE 2.0, required minimum distributions begin at age 73 for those born 1951–1959 and at age 75 for anyone born in 1960 or later. A person turning 65 in 2026 was born around 1961, so RMDs won’t begin until age 75 — roughly a ten-year runway of low-income years.

  
  

• No wages, no RMDs. With work income gone and RMDs not yet required, your only taxable income can be whatever you choose to create — primarily the Roth conversions themselves.

  
  

• Today’s brackets are historically low and now permanent. The seven-bracket structure (10%, 12%, 22%, 24%, 32%, 35%, 37%) was made permanent by the 2025 tax law, and the 10% and 12% brackets are wide. Money converted at 12% today may otherwise come out as RMDs taxed at 22% or higher later.

  
  

• Roth dollars don’t haunt you. Qualified Roth withdrawals are tax-free, have no lifetime RMDs, grow tax-free, and — critically — do not count toward the income that makes Social Security taxable or that drives your Medicare premiums. Spending from a Roth is one of the few ways to generate cash flow that is invisible to the rest of the tax code.

How the cash-flow architecture works

The mechanics are simple to describe:

1. Live on Social Security plus Roth withdrawals. Your Social Security check covers part of your spending. The rest comes out of the Roth IRA, tax-free. Because Roth distributions never appear in your adjusted gross income, they don’t push you into higher brackets and don’t increase the taxability of your benefits.

   
   

2. Convert traditional → Roth to “top off” the low brackets. A conversion is fully taxable as ordinary income, so you size it to fill the 10% and 12% brackets — and stop before spilling into the 22% bracket.

   
   

3. Repeat annually until RMDs begin. Year after year, the traditional IRA shrinks (at low tax cost) while the Roth IRA grows. By the time RMDs arrive, the tax-deferred balance — and therefore the forced, fully-taxable RMD — is much smaller.

The elegance is that the Roth withdrawals you live on don’t compete with the conversions for bracket space. Only Social Security does. Which brings us to the catch.

The catch: Social Security is taxable, and it crowds out conversions

Social Security benefits are taxed based on a figure called provisional income (also “combined income”):

Provisional income = your AGI excluding Social Security + tax-exempt interest + one-half of your Social Security benefits

Notice what’s not in that formula: Roth withdrawals. They’re invisible here. But Roth conversions are fully in your AGI, so every dollar you convert raises provisional income — and can drag more of your Social Security into taxable income.

The thresholds (which, unlike tax brackets, are not adjusted for inflation and have been frozen for decades) work in tiers. For a single filer:

Provisional income	Portion of benefits that becomes taxable
Below $25,000	0%
$25,000 – $34,000	Up to 50% of the amount over $25,000
Above $34,000	Up to 85% of benefits

(For married couples filing jointly, the thresholds are $32,000 and $44,000.)

Here’s the problem for our strategy. As you convert more of your traditional IRA, provisional income climbs, and a larger share of your Social Security is pulled onto your tax return. Because the low brackets have a fixed ceiling, every dollar of newly taxable Social Security uses up a dollar of room that you wanted to use for a conversion. Taxable benefits and conversions are fighting over the same bracket space — and Social Security wins.

This also produces the famous “tax torpedo.” In the range where benefits are phasing into taxability at 85%, each extra $1 you convert adds $1 of conversion income plus about $0.85 of newly-taxable Social Security — $1.85 of taxable income for every $1 converted. Inside the 12% bracket, that means a real marginal cost of roughly 22% on those conversion dollars, even though the headline rate is 12%.

A worked example: single retiree, age 65, 2026

Assume a single individual, age 65, retiring in 2026:

• Social Security: $30,000 per year

  
  

• Spending need: about $60,000 per year, with the $30,000 gap covered by tax-free Roth withdrawals

  
  

• Traditional IRA: a large balance she wants to whittle down before RMDs at 75

  
  

• 2026 deductions (single, 65+): standard deduction $16,100 + additional age-65 deduction $2,050 + the temporary senior bonus deduction $6,000 = $24,150 shielded before any bracket applies

  
  

• 2026 single brackets: 10% to $12,400; 12% from $12,400 to $50,400; 22% begins at $50,400

  
  

Her Roth withdrawals for living expenses don’t show up anywhere taxable. So the only moving part is the conversion. The goal: convert as much as possible while keeping taxable income at the top of the 12% bracket ($50,400) and no higher.

Step 1 — What if Social Security weren’t taxable?

If benefits stayed off the return entirely, she could convert until: conversion − $24,150 in deductions = $50,400 of taxable income. That’s a $74,550 conversion filling the 12% bracket.

Step 2 — Now account for taxable Social Security.

At a conversion large enough to fill the 12% bracket, her provisional income is well above $34,000, so the maximum 85% of her $30,000 benefit — $25,500 — becomes taxable. That $25,500 sits inside the brackets alongside the conversion. Solving for the conversion that still lands taxable income exactly at $50,400:

Taxable SS ($25,500) + Conversion (C) − Deductions ($24,150) = $50,400  →  C = $49,050

Scenario	Social Security taxed	12%-bracket conversion
Ignoring SS taxation (hypothetical)	$0	$74,550
Reality (SS taxed up to 85%)	$25,500	$49,050
Conversion room lost to taxable SS	—	$25,500

The taxable portion of Social Security — $25,500 — directly displaces $25,500 of conversion headroom. She converts $49,050 instead of $74,550. That is exactly the effect to plan around: taxable Social Security eats the lower brackets and shrinks how much traditional IRA you can convert cheaply each year.

The tax bill on that year:

Bracket	Amount taxed	Tax
10% on first $12,400	$12,400	$1,240
12% on next $38,000	$38,000	$4,560
Total — taxable income $50,400		$5,800

She moves $49,050 from tax-deferred to tax-free for $5,800 of federal tax — about an 11.8% effective rate on the conversion, with all future growth on that money now tax-free and RMD-free.

The other extreme — keeping Social Security tax-free.

If instead she wanted none of her Social Security taxed, she’d have to keep provisional income at or below $25,000, which caps the conversion at just $10,000. And if she’s willing to accept a little taxable Social Security but still owe zero federal tax, she can convert roughly $19,300 (where taxable benefits plus the conversion are fully absorbed by her $24,150 of deductions). The trade-off is stark:

• ~$19,300 converted, $0 tax — but slow progress against a large traditional IRA.

  
  

• $49,050 converted, $5,800 tax — far more ground covered, at a still-low rate.

Most retirees with sizable traditional IRAs and a looming RMD problem favor filling the 12% bracket, because the alternative — doing nothing and facing 22%+ RMDs at 75 plus taxable Social Security anyway — is usually worse. But the right answer depends on the size of the IRA, the spending need, and the legacy goal.

A subtle bonus trap: the senior deduction phaseout

There’s one more reason not to blow past the 12% bracket. That $6,000 senior bonus deduction begins to phase out once modified AGI exceeds $75,000 (single), at 6 cents per dollar. In the example, filling the 12% bracket puts modified AGI at about $74,550 — just under the cliff. Convert meaningfully more, and you start losing the senior deduction on top of paying 22%, another hidden bracket-eater. The 12%-bracket fill happens to land in a tax sweet spot.

Note too that the senior bonus deduction is temporary — it exists only through 2028. Starting in 2029, the same retiree’s shield drops from $24,150 to roughly $18,150, which reduces the tax-free conversion room in later years. That’s an argument for converting somewhat more aggressively in 2025–2028 while the extra deduction is available.

What changes year to year

Running this from 65 to 75 isn’t a copy-paste exercise:

• Social Security rises with COLAs. As benefits grow, so does the taxable portion, gradually claiming a bit more bracket space each year.

  
  

• The senior deduction disappears after 2028, shrinking the shield.

  
  

• Brackets and the standard deduction keep inflating, which works in your favor.

  
  

• The traditional IRA keeps growing until you’ve converted enough to bend the curve, so early, larger conversions do more work than late ones.

The practical takeaway: model the full decade, not a single year. The amount you can convert at 12% is a moving target that the Social Security thresholds — frozen while everything else inflates — slowly tighten.

Guardrails before you run this

This strategy is powerful but has sharp edges. A few to watch:

• Medicare IRMAA surcharges. At 65+, large conversions can raise your modified AGI above the IRMAA thresholds and increase your Medicare Part B and D premiums about two years later. IRMAA is a series of cliffs — one dollar over a bracket triggers the full surcharge — so leave headroom.

  
  

• Pay the conversion tax from outside the IRA. Ideally, cover the tax from cash or a taxable account rather than withholding it from the converted amount, so the maximum dollars actually land in the Roth.

  
  

• The Roth five-year rule. To make earnings fully tax-free, your Roth must generally be open at least five years. A retiree over 59½ with a long-established Roth is usually fine, but a brand-new Roth needs attention.

  
  

• State taxes. Some states tax conversions, and a handful still tax Social Security; the federal picture above may not be the whole story where you live.

  
  

• Married couples and the “widow’s penalty.” Filing jointly gives you wider brackets ($32,000/$44,000 Social Security thresholds; a 12% bracket reaching $100,800 in 2026). When one spouse dies, the survivor files as single with compressed brackets and a lower Social Security threshold — a strong reason to convert while both spouses are alive.

  
  

• Don’t over-convert. Converting into the 22% bracket (or beyond) only makes sense if you’re confident your future rate would be higher still. The torpedo can make “12% bracket” dollars cost ~22% in real terms, so know your true marginal rate, not just the headline one.

  
  

The bottom line

Between retirement and RMDs, you have a rare stretch where you largely control your own taxable income. Spending from a Roth IRA and Social Security keeps that income low, and the room it frees up can be used to convert a traditional IRA at the 10% and 12% rates — shrinking future RMDs, reducing lifetime taxes, and building a tax-free, RMD-free balance for you and your heirs.

The one thing you cannot ignore is that Social Security is itself taxable, and its taxable portion competes directly with your conversions for that low-bracket space. In our example, that single fact cut the achievable 12%-bracket conversion from $74,550 to $49,050. Plan around it — size each year’s conversion after accounting for how much Social Security will land on the return — and this becomes one of the most efficient moves available to a retiree.

Propulsion Capital Management helps clients design and execute multi-year Roth conversion plans tailored to their accounts, spending needs, and legacy goals.

Sources

Figures reflect 2026 federal rules. The authorities below are linked inline above and listed here for reference.

• IRS — 2026 inflation adjustments: tax brackets, standard deduction, and senior deduction

  
  

• IRS — Required minimum distribution FAQs (SECURE 2.0 ages 73 / 75)

  
  

• Social Security Administration — Income taxes and your Social Security benefit (provisional-income thresholds)

  
  

• Congressional Research Service — Taxation of Social Security benefits and the temporary senior deduction

  
  

• Medicare.gov — Part B costs and the income-related monthly adjustment amount (IRMAA)

  
  

• IRS — Roth IRAs (qualified distributions and the five-year rule)

  
  

This article is for educational purposes only and reflects 2026 federal tax figures. It is not personalized tax, legal, or investment advice. Tax outcomes depend on your full financial situation, and rules change. Please consult your tax advisor and a financial professional before acting.

The information provided is not based on actual current or past clients. All situations are unique, and results will differ depending on individual situation.

Advisory services are offered through Propulsion Capital Management LLC, an Investment Advisor in the State of California. All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current or future performance or indication of future results. Purchases are subject to suitability. This requires a review of an investor’s objective, risk tolerance, and time horizons. Investing always involves risk and possible loss of capital.

Propulsion Capital Management is not affiliated with or endorsed by the Social Security Administration or any other government agency.