Summary: This case study examines how a retired public-school teacher, Maria Ortiz, and her husband, Tom, used in-plan Roth conversions, strategic Roth IRA rollovers, a targeted pension survivor election and delayed Social Security to reduce future required minimum distributions (RMDs), lower lifetime taxes, and preserve a modest legacy. The example highlights practical steps, tax math, and lessons readers can adapt to their own retirement plans.

Background: the household and their objectives

Maria (64) retired from a state public-school system in 2025 after 33 years. She receives a defined-benefit pension that pays $28,800/year as a single-life amount; options include a 100% joint-and-survivor reduction that would cut the pension to $22,200/year to protect Tom (66) after Maria’s death. Tom has a small private-sector 401(k) (from part-time consulting) worth $210,000 and a rollover IRA of $360,000 from earlier jobs. The couple also has a modest Roth IRA of $45,000 and $150,000 of cash savings.

Their goals in 2026 were straightforward: maintain reliable cash flow, minimize taxes once RMDs begin, and leave at least $200,000 to their two adult children. Key constraints: Maria’s pension is a defined benefit with survivor trade-offs, and Tom’s pre-tax retirement balances (401(k) + IRA) would generate substantial RMDs starting at the applicable RMD age. They planned to delay claiming Social Security until age 70 to maximize the benefit.

Why the timing in 2026 mattered

Under current law (August 2026), the RMD framework established by SECURE Act 2.0 means most retirees face RMDs beginning at age 73 (for those who reached 72 after 2022), rising to 75 in 2033. Maria and Tom were approaching the RMD phase-in window: Tom would be 73 in 2033 and thus face larger RMDs as he aged. They had a window in the late-2020s to take actions that would permanently reduce future taxable RMDs.

The plan they executed

  1. Partial in-plan Roth conversion of Tom’s 401(k) (2026): Tom’s employer plan allowed in-plan Roth rollovers. Instead of rolling his entire 401(k) into a rollover IRA immediately (which would leave it all pre-tax and subject to RMDs), he converted $80,000 to the plan’s Roth subaccount in 2026. He paid the conversion tax from their cash savings, choosing tax-bracket thresholds to avoid pushing their 2026 taxable income into the next marginal bracket.
  2. Rollover of Roth 401(k) to Roth IRA (2026–2027): The couple then rolled the in-plan Roth to a Roth IRA when Tom left the employer in late 2026. This step matters because Roth 401(k)s are still subject to RMDs, while Roth IRAs are not for the original owner. The rollover effectively removed those dollars from future RMD calculations.
  3. Targeted Roth conversions from the IRA to Roth IRA (2027–2029): With a multi-year horizon before large RMDs kicked in, Tom converted an additional $150,000 of rollover IRA assets to a Roth IRA across 2027–2029. He paced conversions to “fill” 2027–2029 tax brackets (capitalizing on relatively modest taxable income while Social Security remained deferred and pensions were partially reduced by the survivor election).
  4. Pension survivor election decision (2026): Maria elected the 100% joint-and-survivor option that reduced immediate pension income by $6,600/year. That reduction created breathing room in taxable income during the conversion window and ensured Tom would retain a guaranteed base income if Maria predeceased him.
  5. Delayed Social Security to 70 (2028–2029): Maria and Tom elected to claim Social Security at age 70. Waiting amplified their benefit by roughly 24–32% (depending on their full retirement ages), providing a higher inflation-indexed floor later that also allowed them to convert more IRA dollars earlier.
  6. Use of cash savings to pay conversion taxes (2026–2029): Instead of drawing down pre-tax retirement assets to pay conversion taxes (which would reduce the effectiveness of conversions), they used cash savings and part-time Roth distributions to cover tax bills.

Why these moves reduced future RMDs and taxes

  • Roth IRAs are not subject to required minimum distributions for the original owner, so converting pre-tax IRA dollars into Roth IRA dollars permanently removed that portion from future RMD calculations.
  • By converting before Social Security and pensions fully kicked in or while they had reduced pension income due to the survivor election, the couple used lower marginal tax brackets and avoided high-bracket conversions that would have triggered unnecessary taxes.
  • The pension survivor election reduced present income, trading some monthly pension for a survivor guarantee that smoothed long-term cash flow and created room for conversions in the short term.
  • Delaying Social Security until age 70 increased guaranteed lifetime income, reducing the couple’s reliance on taxable withdrawals later in retirement—this in turn let them be more aggressive with Roth conversions early on.

Numbers: a simplified before-and-after snapshot

Before the plan (2025 balances): Tom’s IRA + 401(k) = $570,000; Roth IRA = $45,000. Maria’s pension gross = $28,800/year single-life. Expected household RMDs at age 75 were projected at roughly $40,000–$55,000/year (taxable) assuming no conversions.

After executing the plan through 2029:

  • Roth IRA balance rose to approximately $275,000 (after conversions and growth).
  • Taxable pre-tax retirement balances fell to $185,000.
  • Projected RMDs at age 75 declined by roughly 60% compared with the no-action scenario.
  • Later Social Security at 70 provides an added $12,000–$18,000/year (inflation-adjusted), allowing fewer taxable withdrawals.

The net effect: significantly lower taxable income during ages 75–85, lower Medicare IRMAA risk (since lower AGI reduces Medicare Part B/D IRMAA surcharges), and a preserved legacy target (they projected $210,000 to heirs, up from $150,000 in the baseline model).

Key trade-offs and risks they navigated

  • Immediate tax hit: The couple paid roughly $55,000 in conversion taxes over four years, funded from savings. That reduced liquidity and increased sequence-of-returns risk, but they judged the long-term tax savings justified it.
  • Pension income trade: Choosing the joint-and-survivor pension reduced current pension income by $6,600/year. That short-term income reduction was offset by lower future volatility and the ability to perform larger Roth conversions.
  • Policy risk: Any future legislative change to Roth rules or RMD rules could alter expected benefits. As of August 2026, Roth IRAs remain RMD-free for original owners; they monitored policy discussions and kept a conservative buffer.
  • Medicare and means-tested programs: They reduced AGI to limit Medicare IRMAA and potential Medicaid exposure for long-term care, improving net outcomes.

Lessons for retirement-planning enthusiasts

  1. Time conversions when ordinary income is lower: If you can lower taxable income for a few years (through pension choices, delayed Social Security, or planned withdrawals), that window is an opportunity to convert pre-tax IRA/401(k) dollars to Roth at lower marginal rates.
  2. Understand plan mechanics: Converting within a 401(k) to a Roth subaccount is not the same as rolling to a Roth IRA. To eliminate RMD exposure, Roth 401(k) balances must generally be rolled to a Roth IRA when possible.
  3. Weigh pension survivor elections carefully: For couples, a smaller guaranteed pension with survivorship protection can be a lever to reduce taxable income today and enable tax-saving conversions—balance income needs with legacy goals.
  4. Use non-retirement cash to pay conversion taxes: Paying taxes from savings, not from the retirement account being converted, preserves the benefits of the conversion and accelerates tax-free growth in the Roth.
  5. Coordinate with Social Security timing: Delaying Social Security can create a larger guaranteed income floor that complements tax-aware decumulation strategies.

Final takeaway

Maria and Tom’s case shows how a multi-pronged, time-sensitive approach—combining in-plan Roth moves, Roth IRA rollovers, a deliberate pension survivor election and delayed Social Security—can materially reduce required minimum distributions and lifetime taxes. The strategy requires cash to pay conversion taxes, careful modeling, and comfort with trading some present income for future tax efficiency. For many retirement-planning enthusiasts, the central lesson is this: by aligning pension choices, 401(k)/IRA conversions and Social Security timing in a single plan, retirees can reshape the tax profile of their later years and preserve more assets for heirs.

Readers should use this case as a template, not a plug-and-play solution. Consult a qualified financial planner and tax professional to model conversions and survivor options against your personal balances, state pension rules, and Social Security credits.