I turned 59½ this year. As we get close to the end of the 2025, that means we now have a green light into our 401Ks.

With paid corporate board work behind me, our income has dropped sharply—in a good way. No W-2s, no consulting, just modest interest and dividends. We’ve been living off cash from selling our rental property, which has pushed our federal tax rate down to an amazing 2–3%. When the tax code gives you a window like that, it’s time to act!

This is our first year doing a Roth conversion since we did my wife’s 401K about 10 years ago. The timing is ideal. Instead of letting my MegaCorp 401(k)s grow into a future tax headache, we’re deliberately pulling money out now. We simply convert enough to a Roth IRA to take advantage of today’s low tax rates, while keeping total taxable income safely inside the 12% bracket.

At the same time, we’re using our family foundation / Donor Advised Fund to push even harder. Part of what comes out of the 401(k)s goes straight into the DAF to build that balance. The charitable deduction helps offset the conversion income, the money is set aside for causes we care about, and we retain flexibility on when grants are made. Tax planning and values alignment don’t have to be separate decisions.

The real motivation is what’s coming later. Required Minimum Distributions (RMDs) will eventually force taxable income higher whether we want it or not. By doing steady Roth conversions over the next 10+ years, we reduce that future burden in advance. Paying modest taxes now beats getting shoved into higher brackets later.

There’s nothing flashy here. No market bets, no clever tricks—just using low-income years wisely. We’ll repeat this annually, stay under the 12% bracket, fully fund the DAF for the future, and shrink future RMDs. It’s a financially fun way to end the year and get ready for tax season.

How much experience do you have with Roth Conversions?

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