Absolutely. Doing Roth conversions in phases over multiple years is a smart strategy to manage your tax liability in retirement. When you convert funds from a Traditional IRA to a Roth, the amount converted is added to your taxable income for that year. If you convert too much at once, you could push yourself into a higher tax bracket and face a hefty bill.

The key is to plan your conversions strategically, taking advantage of lower-income years and spreading out the tax impact. For example, consider a married couple filing jointly with a taxable income of $100,000 in retirement. That puts them in the 22% marginal tax bracket, which applies to income up to approximately $201,050 in 2026. If they convert a $500,000 Traditional IRA all at once, the extra income would push them well into the 35% and even 37% brackets — paying far more in taxes than necessary.

Instead, suppose they convert $75,000 per year for 7 years. This keeps them within the 22% bracket and results in a much lower total tax bill on the converted funds. Of course, you'll need to weigh the conversion taxes against the benefits of tax-free Roth growth. If your IRA has mostly nondeductible contributions, you may have less tax impact from converting.

Another factor to consider is Medicare premiums — specifically IRMAA surcharges — which are based on your income from two years prior. A large conversion in one year could trigger elevated Medicare premiums two years down the road. The sweet spot for annual conversion amounts is often the gap between your current taxable income and the next IRMAA tier, while staying below the next federal bracket threshold simultaneously.

There may also be opportunities to fill up lower tax brackets in years with above-average deductions — high medical expenses, significant charitable contributions, or business losses. It's all about multi-year tax planning to create an optimal mix of Traditional and Roth funds for retirement. As a Personalized CFO and Enrolled Agent, I help clients model out Roth conversion scenarios to find their unique tax equilibrium. If you're nearing retirement or already retired, let's discuss whether a phased conversion strategy makes sense for your situation.