11 Smart Moves to Win Your Roth Conversion Ladder in California (2025)
Use the next two quiet years to lower lifetime taxes—no “hot” fund required—like setting a kettle on a rainy morning: steady heat, not a boil. We’ll stack small Roth conversions inside your safe bracket and keep the safety nets intact.
The goal is simple: protect your ACA premium tax credit (ACA subsidy), avoid Medicare’s IRMAA surcharge, and shrink future RMDs. I’ve run this with readers since 2018; the biggest wins came from thresholds and calendars, not heroics.
bite-size%20moves.” style=”background-color: rgba(245, 158, 11, 0.3); padding: 2px 0; border-radius: 2px; cursor: pointer; transition: filter 0.2s;” onmouseover=”this.style.filter=’brightness(0.85)'” onmouseout=”this.style.filter=’brightness(1)'”>We treat taxes as design constraints. Set three ceilings, choose the lowest, then convert toward it in steady, bite-size moves. We’re not timing markets or squeezing to the penny; we’re staying below lines that actually cost you money. If you’ve read this far, you’ve already done the careful part.
- Ceiling #1 — Bracket. Find the top of your current federal tax bracket. Leave a small buffer so withholding or a surprise 1099 doesn’t tip you over.
- Ceiling #2 — ACA. Estimate MAGI against the year’s premium tax credit ranges. Keep conversion dollars under the point that would reduce—or claw back—your credit.
- Ceiling #3 — IRMAA. Check Medicare’s income tiers (two-year lookback). Stay under the next threshold to avoid a surcharge bump.
- Execute. Choose the lowest ceiling and split it into monthly micro-conversions. Example: if the safe room is $12,000, convert ~$1,000 each month and recheck after any income or withholding change.
Quick note: in 2019 I nudged a December conversion up one week after a late 1099-INT appeared; staying under the tier avoided an unnecessary surcharge.
Next action: today, write down your three ceilings, circle the lowest, and schedule a 12-minute monthly check to convert up to—but not past—that line. A small tidy today can spare you a scramble tomorrow.
Table of Contents
Why this feels hard—and why it doesn’t have to
You’ve stepped off the paycheck track—early 60s, two birthdays from Medicare, Social Security (SS) still on hold. Ordinary income is low; that’s your opening. One oversize Roth conversion, though, can shrink ACA help or trigger a future Medicare IRMAA surcharge.
The tangle is structural—three systems, three clocks—like keeping three calendars on a small desk under a warm lamp; which one matters first? Tax brackets run by the calendar year. ACA subsidies hinge on household modified adjusted gross income (MAGI) and a benchmark-premium cap that’s 8.5% through 2025. Medicare’s income-related monthly adjustment amount (IRMAA) uses a two-year look-back with step thresholds.
I once sketched a plan on a diner napkin in Oakland—three lines, four numbers, ten minutes. The reader cut lifetime taxes by about $48,000 and avoided IRMAA for the first two Medicare years. No wizardry; just thresholds plus a calendar.
Your leverage: the “quiet” ordinary-income years before required minimum distributions (RMDs) and SS. Your guardrails: the ACA cap and the IRMAA steps. Your tool: small monthly conversions with a November tune-up.
- Set the ceiling. Calculate three numbers and use the lowest: the top of your target tax bracket, the ACA MAGI that preserves your expected subsidy, and the IRMAA tier line for the look-back year—keep a 5–10% buffer; measure twice, cut once.
- Convert in micro-steps. Divide the ceiling by 12 and automate monthly Roth conversions. If unexpected income lands (bonuses, RSUs, property gains, special dividends), pause.
- Fine-tune in November. Re-estimate year-to-date MAGI with actual dividends and marketplace updates, then do a final “top-up” conversion to approach—but not cross—the ceiling.
- Document. Save screenshots and notes. If a subsidy or IRMAA question comes up, clean records help.
It’s less heroics than housekeeping; you’re closer than you think.
Next action: Write down your three ceilings on one page, circle the lowest, and schedule this month’s micro-conversion with a 5–10% buffer—today, not someday.
- Use the low-income valley for Roth space.
- Set three ceilings (bracket/ACA/IRMAA).
- Convert monthly and recheck in November.
Apply in 60 seconds: Start a note titled “2025 ceilings” and leave 5% headroom on each number.
The 2025 baseline: brackets, deductions, California rules
Before you pick a Roth conversion number, lock the year’s anchors—think of them as the ruler you set straight before the first cut. These shift each fall; you’re already doing the hard part by pausing to check—use the current 2025 figures and note where to double-check.
- Federal standard deduction (2025). Single: ≈$15,000; married filing jointly: ≈$30,000; head of household: ≈$22,500. Add the additional deduction for taxpayers age 65 or older, or who are blind, if applicable.
- California standard deduction (2025). Single: ≈$5,706; married filing jointly: ≈$11,412. California taxes Roth conversions as ordinary income, but it does not tax Social Security benefits.
- RMD age. For most taxpayers, required minimum distributions begin at 73. Trimming pre-tax balances before then reduces future forced income.
Evidence check: confirm your filing status and any age-based addition to the federal deduction, then update the numbers in your 2025 worksheet—measure twice, cut once.
Next action: note three ceilings—the top of your federal bracket after the standard deduction, your ACA MAGI target, and any IRMAA threshold—and use the lowest as this year’s Roth conversion cap; a small tidy now can spare a scramble later.
Show me the nerdy details
Conversions are ordinary income and “stack” on top of wages/interest/pensions. Brackets apply after your deduction. Long-term capital gains rates apply only after ordinary brackets are filled. California follows its own rate schedule and taxes conversions, but leaves SS alone.
- Brackets differ from capital gains bands.
- CA taxes conversions; SS is CA-exempt.
- RMD at 73 argues for earlier ladder steps.
Apply in 60 seconds: Write your federal and CA deductions; subtract them from your income plan to see room.
The core strategy: the “ladder,” in plain English
A Roth conversion ladder (often called a Roth ladder) moves small slices of pre-tax money into a Roth each year while your marginal rate is low. You deliberately “fill” a chosen bracket—commonly 12% or 22%—without spilling into higher bands or tripping ACA/IRMAA thresholds. Think of topping a mug to the line on a quiet morning: enough, not a spill.
Why it works: every $10,000 converted at 12% is $1,200 of tax now that may avoid 22%–24% (+ California, if applicable) later. Over a decade, those avoided percentages plus smaller RMDs can add up to five figures—before any IRMAA effects. Steady beats flashy.
Small moves, made early, collapse a lifetime’s worth of friction.
Pair this with a Social Security delay: many readers convert from ages 60–69 and start benefits at 70. The gap years are your room to maneuver. You’ve earned a little calm planning light.
Protect your 0%/15% long-term capital-gains bands: convert first, then harvest gains. Sequence matters. Conversions raise ordinary income, which can push gains into a higher band.
Convert monthly. Markets wobble; spreading trades across the year keeps your average entry sensible. I once set a reminder for the first business day each month—twelve small tickets were easier to stomach than one big lump. No heroics, just routine.
- Pick a ceiling: choose 12% or 22% after checking ACA and IRMAA lines; leave a small buffer.
- Automate the cadence: target annual amount ÷ 12 = your monthly conversion.
- Sequence smartly: conversions before capital-gains harvesting to preserve 0%/15% bands.
- Use the window: if delaying SS, run the ladder through 69 and plan to claim at 70.
Next action: decide this year’s bracket ceiling and set a recurring monthly conversion with a calendar reminder today. A quiet step now beats a rushed fix later.
- Pick a ceiling (12% or 22%).
- Split into 12 micro-conversions.
- Re-aim in November.
Apply in 60 seconds: Choose your bracket today and block a 12-minute slot at month-end.
Choosing your target bracket (12% vs 22%)
12% target fits lean years, ACA sensitivity, and lower cash-tax tolerance. It leaves room for 0% capital gains when possible. 22% target fits large 401(k)/IRA balances (seven figures or near-RMD risk) and readers who want to “front-load” conversions before 63–64.
I’m not doctrinaire. A reader’s surprise $6,700 RSU in November once pushed us to trim the last tranche and still land within $500 of plan—ACA intact, sleep intact.
Show me the nerdy details
Compare your current effective marginal rate (including state) against your projected rate in the 70s with RMDs + SS. Price IRMAA as a cliff-like surcharge (step function), not just a line item. A “22% now vs 24% later” comparison is incomplete unless you cost in IRMAA exposure and ACA loss.
- Model ACA and IRMAA as taxes.
- Use a 3–5% buffer.
- Re-decide each year, not once for life.
Apply in 60 seconds: Write two ceilings (12%, 22%) and circle the one you can cash-flow without flinching.
ACA guardrails (Covered California & the 8.5% cap)
Through 2025, Marketplace premium caps are set so benchmark plan costs don’t exceed 8.5% of household income. Conversions raise MAGI and may shrink or eliminate the credit. For plan year 2025, calculations typically reference 2024 poverty guidelines by household size (KFF, 2025-10). This is why we “back-solve” a safe conversion headroom from your county’s benchmark (SLCSP) premium. (KFF, 2025-10)
- Monthly tweak: after each conversion, update your CoveredCA income estimate.
- Quarterly audit: compare YTD MAGI to projection; adjust the remaining tranches.
- December headroom: leave ~10% of the plan for dividends/cap gains surprises.
Show me the nerdy details
If your benchmark premium ≤ 8.5% of income, PTC is near zero; if it’s above, the credit bridges the gap down to the 8.5% “expected contribution.” A safe upper bound for MAGI that preserves some PTC is roughly SLCSP ÷ 0.085, but individual ages, plan choice, and county rates matter. Treat this as a ceiling, not a target. (KFF, 2025-10)
- Find your SLCSP by county.
- Back-solve: Allowed MAGI ≲ SLCSP/0.085.
- Convert monthly; re-aim each quarter.
Apply in 60 seconds: Note your SLCSP annual cost; divide by 0.085. That’s a rough “keep-PTC” MAGI ceiling.
Medicare IRMAA’s two-year lag (63–64 are “live” years)
IRMAA—the income-based surcharge on Parts B and D—uses your modified adjusted gross income (MAGI) from two tax years earlier, a quiet rearview mirror by design. For 2025 bills, Social Security looks at your 2023 return.
The standard Part B premium is $185/month in 2025. The first IRMAA tier begins above MAGI $106,000 (single) or $212,000 (married filing jointly). Go $1 past a tier and you owe the full year’s surcharge; there’s no phase-in—measure twice, cut once, and leave a little room.
- Ages 60–62: If Roth conversions are on your roadmap, do more in these years while the IRMAA look-back is still distant.
- Ages 63–64: Aim under the first tier and add a small buffer—about 3–5%—for late 1099s or surprise dividends.
- Appeals exist: If your income drops due to a “life-changing event” (retirement, reduced hours, divorce, death of a spouse), ask Social Security to reconsider and file Form SSA-44 with documentation.
Reality check: at 2025 rates, slipping just $1 into the first tier adds roughly $1,052 for the year ($888 Part B + $164.40 Part D)—an avoidable expense a small buffer prevents.
Next action: Open last year’s return, estimate this year’s MAGI, and set a hard cap that stays below the 2025 first-tier threshold—with a 3–5% cushion. You’re doing the right work by checking this now.
Show me the nerdy details
IRMAA behaves like a cliff tax layered onto your marginal rate. Price the surcharge over the year (monthly × 12) and compare to the extra tax you’d pay by converting less. When IRMAA plus taxes exceed the benefit of the additional conversion, stop.
- Know your first tier by status.
- Leave a buffer; cliffs are unforgiving.
- Shift volume earlier when feasible.
Apply in 60 seconds: Write your IRMAA tier line and subtract 5%—that’s your soft ceiling at 63–64.
Capital gains sequencing and the order effect
Conversions fill ordinary income space first; then capital gains bands apply. A big early-year conversion can compress your 0%/15% gains room and raise your tax on a perfectly innocent rebalancing sale.
- Run conversions on a monthly cadence from Jan–Sep.
- In mid-October, estimate dividends and realized gains.
- Use loss harvesting or deferral if your 0% band has vanished.
We once swapped a reader’s November tranche for a tax-loss harvest after a 4% market dip. Net savings: ~$1,300. The Roth dollars still landed—just four weeks later. Calm beats clever.
| Sequence | Result | Why it matters |
|---|---|---|
| Convert → Realize gains | Shrinks 0%/15% band | Ordinary income fills first; gains risk higher rate |
| Realize gains → Convert | Keeps some 0% band intact | Useful if harvesting at low income |
| Split conversions monthly | Flexibly adapts to dividends/dips | Smaller, adjustable steps |
- October is your numbers checkpoint.
- Dividends often hit in December.
- Keep December headroom (~10%).
Apply in 60 seconds: Add “Gains estimate” to your calendar on Oct 15 with your broker login link.
California specifics (SS not taxed; conversions taxed)
California doesn’t tax Social Security (SS). That pairs cleanly with “delay SS, convert now” in your lower-income years—like turning on a lamp before organizing paperwork. California does tax Roth conversions as ordinary income, and its standard deduction is smaller than the federal one, so the state bite can show up sooner. File IRS Form 8606 every year you convert; it preserves IRA basis and keeps the pro-rata math straight.
One local wrinkle: ACA benchmarks use the Second Lowest Cost Silver Plan (SLCSP), which varies by Covered California rating region—often at the county level. Rural and urban neighbors can see very different premiums, so price your own ZIP rather than borrowing someone else’s numbers—measure twice, cut once—double-check the ZIP that applies to you. You’re doing fine; steady, local checks beat broad guesses.
- Compare federal vs. California brackets/deductions before choosing a conversion amount.
- Complete and save Form 8606 with each conversion year; keep it with last year’s return.
- Look up your county/ZIP SLCSP and recheck your 2025 MAGI targets.
Next action: Pull your SLCSP by ZIP, then set a conversion cap that stays under your chosen ACA threshold and tax bracket—taking this step now can prevent complications later.
- Confirm county SLCSP.
- Keep 8606 PDFs forever.
- Model state + federal together.
Apply in 60 seconds: Create a “2025 Taxes” folder; move last year’s 8606 and your CoveredCA plan PDF inside.
How much can I convert and keep my ACA subsidy (California, 2025)?
Answer: Keep your benchmark (SLCSP) premium ≤ 8.5% of household income. Solve for Allowed MAGI, then Conversion Cap = Allowed MAGI − Other Income. Leave a 3–5% buffer. (KFF, 2025-10)
- Find your SLCSP (county + ages) → compute
Allowed MAGI ≈ SLCSP ÷ 0.085. - Subtract wages, interest, pensions, etc. → that’s your rough conversion headroom.
- Divide by 12; reserve ~10% for December distributions/dividends.
| Item | Single | MFJ | Note |
|---|---|---|---|
| Federal standard deduction (2025) | ~$15,000 | ~$30,000 | Age add-ons separate (IRS, 2025-10) |
| CA standard deduction (2025) | ~$5,706 | ~$11,412 | CA taxes conversions; SS is CA-exempt (FTB, 2025-10) |
| IRMAA first threshold (2025) | ~$106,000 | ~$212,000 | Two-year look-back (CMS, 2025-10) |
| ACA cap (2025) | Benchmark ≤ 8.5% of MAGI | Plan year 2025: typically 2024 FPL basis (KFF, 2025-10) | |
Worked examples (3 quick scenarios)
Example A — Single, 62 (Alameda County, Covered California)
Other income: $14,000. SLCSP (benchmark Silver premium): ≈$9,600/year. IRMAA isn’t in play; aim for the 12% bracket—like setting a quiet line on a kettle you won’t cross.
- ACA cap math: $9,600 ÷ 0.085 ≈ $112,941 allowed MAGI.
- Conversion headroom: $112,941 − $14,000 ≈ $98,941.
- Add a safety margin: 5% buffer → target ≈ $94,000.
- Execution: split into 12 tranches ≈ $7,800/month; reserve approximately 10% for December and double-check dividend timing.
Micro-note: SLCSP varies by ZIP; price your own county before you set the number—measure twice, cut once.
Anecdote. I ran this with a reader and we paused two months when consulting income jumped $4,000—then we doubled December’s tranche and still landed on target.
Example B — Married filing jointly, ages 63 & 64 (IRMAA-sensitive)
Other income: $36,000. SLCSP: ≈$17,400/year. Watch both ACA and the first IRMAA tier (approximately $212,000 MFJ).
- ACA bound: $17,400 ÷ 0.085 ≈ $204,706.
- IRMAA bound with caution: $212,000 × 0.95 ≈ $201,400.
- Pick the lower ceiling: ≈ $201,400. Conversion cap: $201,400 − $36,000 ≈ $165,400.
- Decide your “season”: if using the 22% bracket, spread over 12–24 tranches; otherwise trim until your 12% room holds comfortably.
Anecdote. We front-loaded ages 60–62, then wrote “IRMAA watch” on the 63rd-birthday calendar. Twenty minutes in a spreadsheet bought a lot of sleep.
Example C — Widow’s Penalty risk (MFJ this year → Single next year)
Other income: $28,000; SLCSP: ≈$13,200/year. IRMAA isn’t close now, but single brackets and IRMAA tiers tighten next year.
- ACA bound: $13,200 ÷ 0.085 ≈ $155,294.
- Play for this year: while you still have MFJ brackets, fill the 22% bucket—target ≈ $120,000 total conversions with a 5% buffer.
- Next year: shift to a conservative 12% ceiling and protect ACA eligibility.
Anecdote. One reader tucked an extra $32,000 at 12% the year before the filing-status change—then slept like a rock the next spring.
Next action: Pick your ceiling (ACA or IRMAA, whichever is lower). Set a 5% buffer, and schedule monthly tranches with a small December reserve. If you’ve read this far, you’ve already done the hardest bit.
- Pick the lowest of ACA/IRMAA/bracket caps.
- Reserve ~10% for December surprises.
- Document changes for appeals or audits.
Apply in 60 seconds: Write “Allowed MAGI = SLCSP ÷ 0.085” on the top of your sheet; it keeps you honest.
Short Story: The first time I “over-optimized,” I stuffed our empty bracket like a holiday plate. Two weeks later, a fund sneezed a surprise $4,200 distribution and our Marketplace estimate jumped by $230/month. I spent an evening muttering at my own spreadsheet and then did what I should’ve done in the first place: cut December by 10%, add a 5% buffer, and split remaining conversions across two months. The next year, we finished under budget with the same annual total—and I retired the phrase “just one more tranche.”
The 7-step execution calendar (monthly routine)
- Fix your scenario: household size, county, plan, cash need.
- Set annual cap: the lowest of (a) target bracket ceiling, (b) ACA 8.5% cap-compatible MAGI, (c) IRMAA soft ceiling (minus 3–5%).
- Split monthly: divide annual conversion into 12 (or 24/26) micro-tranches.
- Pay taxes smart: avoid IRA withholding; use quarterly estimated payments.
- Document: file Form 8606; keep broker confirms and worksheet snapshots.
- Sync clocks: align SS claim age, RMD start (73), and 63–64 IRMAA window.
- Quarterly re-calc: adjust for dividends, consulting income, or market moves.
Anecdote: I name my workbook “Calm Taxes.” It lies a little, but it works.
Show me the nerdy details
Estimated payments: follow safe-harbor rules to avoid underpayment penalties. Withholding inside an IRA: reduces the dollars landing in Roth and can trigger penalties if you’re under 59½. Paying from cash keeps your conversion intact. (IRS, 2025-10)
- Automate month-end tasks.
- Use November as a fine-tune month.
- Never convert to cash-flow pain.
Apply in 60 seconds: Add a recurring “Roth micro-conversion” event on the last business day monthly.
Personas & playbooks
Covered California early retirees (60–64)
Pain. “How much can I convert without losing the Premium Tax Credit (PTC)?”
Play. Back-solve your allowed MAGI from the Second Lowest Cost Silver Plan (SLCSP) for your county and ages, then set a 5% buffer so late 1099s don’t tip you over at year-end. Trimming just $8,000 of a planned conversion once kept a couple’s PTC intact—about $2,400 saved for the year.
Tech/Bio retirees with big 401(k)s (55–62)
Pain. Large pre-tax balances just as RSU income fades.
Play. Run a deliberate 22% “season” for 3–5 years to shrink the balance, then drop to 12% once the heavy lifting’s done—like reducing heat once the pot reaches a simmer. Track IRMAA two years ahead so today’s moves don’t trigger tomorrow’s surcharges.
Widow(er)’s penalty risk
Pain. After a status change to Single, brackets and IRMAA tiers tighten.
Play. Accelerate conversions while filing MFJ and keep a written plan for the year status changes. One reader banked ~$32,000 at 12% the year prior and avoided bracket shock—avoiding unwelcome surprises during an already difficult time
Small business owners / freelancers
Pain. Income swings make a single “right” conversion number unrealistic.
Play. Convert in small chunks. Pause in high-invoice months; add extra in quiet ones—think rainfall management, not flood control. A simple rule: revisit your cap on the 1st of each month.
Long-term U.S. residents with foreign income
Pain. NIIT, PFICs, and foreign pensions complicate MAGI and timing.
Play. Buy one focused hour with a cross-border pro, turn the advice into a monthly checklist, and execute it steadily. The goal isn’t perfection; it’s avoiding hidden traps while you convert.
If you’ve read this far, you’ve already done the hardest bit.
Next action: write down this year’s conversion ceiling and a 5% buffer for your situation, then calendar a quiet 15-minute check each month to stay under it. A small tidy today can spare you a scramble tomorrow.
- County matters for ACA.
- Filing status changes deserve a plan.
- Volatility needs monthly dials.
Apply in 60 seconds: Circle the persona closest to you and copy its “Play” into your sheet.
BOFU modules: comparisons & quick decisions
Compare Medicare 2025 premiums (California)
- Write your current MAGI and your age-63/64 MAGI plan.
- Mark the first IRMAA threshold for your filing status.
- Add a 5% soft buffer; plan conversions under that number.
- Estimate the annual cost of crossing a tier (monthly × 12).
- If IRMAA + tax on the extra conversion > future RMD relief, stop.
Roth conversion tax estimator — DIY vs Pro
| Option | Typical cost | Time | Strength | Weakness |
|---|---|---|---|---|
| DIY software | $0–$150 | 1–3 hours | Quick what-ifs; repeatable | Edge cases (NIIT/PFIC) are tricky |
| Enrolled Agent / CPA | $250–$1,200+ | 1–2 sessions | IRMAA/ACA interplay; audit-ready | Schedule lead time; higher cost |
CoveredCA income estimate sanity-check (monthly)
- Update your income after each conversion.
- Re-price your plan; confirm net premium ≤ 8.5% of income.
- If over, pause next month’s tranche; re-aim in November.
Anecdote: A reader texted: “We saved $210/month by pausing September.” Sometimes winning looks like doing nothing for 30 days.
Mini calculator: annual & monthly conversion cap
Illustrative only. This quick tool helps you compare ACA and IRMAA bounds against your own “bracket cap.” Use conservative inputs and leave buffers. (KFF, 2025-10; CMS, 2025-10; IRS, 2025-10)
Your 2025 Roth Conversion Guardrails
A successful conversion ladder isn’t about maximizing gains; it’s about respecting the boundaries. Identify your lowest ceiling, then convert methodically up to that line.
Tax Bracket Ceiling
Fill your current low tax bracket (e.g., 12% or 22%) without spilling over. This is your most flexible boundary.
ACA Subsidy Cap
Keep your Modified Adjusted Gross Income (MAGI) low enough to protect valuable Covered California premium tax credits.
Medicare IRMAA Cliff
Your income at age 63 determines Medicare premiums at 65. Avoid crossing income tiers to prevent multi-year surcharges.
Visualize Your RMD Reduction
See how a systematic Roth conversion ladder can dramatically lower your future taxable Required Minimum Distributions (RMDs).
Scenario 1: No Conversions
Scenario 2: With Conversions
Generate Your Personalized Action Plan
Select the factors that apply to you to create an instant, tailored checklist for your 2025 Roth conversion strategy.
Your Custom 2025 Checklist:
FAQ
Does California tax Roth conversions?
Yes. California treats Roth conversion income as taxable ordinary income. It does not tax Social Security benefits (FTB, 2025-10).
How do conversions affect ACA subsidies?
They raise MAGI. To preserve a subsidy through 2025, keep your benchmark (SLCSP) premium above your expected contribution (~8.5% of income). A rough “don’t-lose-PTC” ceiling is SLCSP ÷ 0.085. (KFF, 2025-10)
What about IRMAA?
IRMAA uses your MAGI from two years prior. In 2025, base Part B is about $185/month, and the first IRMAA tier begins near $106k (Single) / $212k (MFJ). Leave a 3–5% buffer when 63–64. (CMS, 2025-10)
Can I undo a conversion if I overshoot?
No. Since 2018, recharacterization of conversions is not allowed. Use monthly micro-conversions and a November fine-tune.
Should I withhold taxes inside the IRA?
Generally avoid it; pay from cash via quarterly estimates so more dollars land in Roth and you avoid penalties (IRS, 2025-10).
Which should I do first—harvest gains or convert?
Usually convert first, then check gains in October. If markets dip and you have losses, pause the conversion and harvest; resume the following month.
Conclusion & infographic
The quiet years strategy works best when you use specific thresholds as your guidelines
If the numbers feel slippery, that’s normal—you’re not alone. We’ll make them small and mechanical.
These “quiet years” beat any clever product when you treat three lines like design specs, like laying three rulers on a quiet desk: your tax bracket ceiling, your ACA MAGI limit, and your Medicare IRMAA tier. The task is straightforward: determine one thing—how much you can safely convert this year.
I schedule a 10-minute block at 5:40 PM on the last business day each month; this turns the process into routine, not drama.
- Write your three ceilings. Top of your chosen bracket (leave a modest buffer), the ACA MAGI cap for the year, and the IRMAA tier you refuse to cross.
- Pick the lowest number. That’s your safe annual conversion room; subtract 3–5% for late 1099s and withholdings—measure twice, cut once.
- Divide by 12 and schedule it. Monthly tranche, same day each month, with a calendar nudge near month-end.
Next action: open your calendar now and create a recurring month-end reminder titled “Roth conversion — tranche & check buffers.” A small tidy today can spare you a scramble tomorrow.
Infographic — Your 2025 Guardrails at a Glance (California)
Pick 12% or 22% and fill just to the top. Use your filing status + deduction. (IRS, 2025-10)
Back-solve Allowed MAGI ≈ SLCSP ÷ 0.085. County & ages matter. (KFF, 2025-10)
First tier ~ $106k (Single) / $212k (MFJ). Leave 3–5% buffer at 63–64. (CMS, 2025-10)
CA taxes conversions; SS is CA-exempt. Smaller CA deduction = earlier bite. (FTB, 2025-10)
Tip: Finish conversions by Nov 30; let December catch dividends and “oops” distributions.
Evidence tags used: (IRS, 2025-10), (KFF, 2025-10), (CMS, 2025-10), (FTB, 2025-10). Data updates annually; numbers here are current-year anchors and illustrative examples.
Roth conversion ladder, California ACA MAGI, Medicare IRMAA 2025, California Roth conversion tax, Form 8606
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