Arizona taxes IRA and 401(k) distributions at a flat 2.5%, the same rate as long-term capital gains. Roth withdrawals and Social Security benefits are both fully exempt from Arizona gross income. State tax optimization is not the primary driver -- federal bracket management is -- but Arizona's low flat rate and the two exemptions make every sequencing decision slightly more favorable than in a higher-tax state.

The default path -- spending from the brokerage account, leaving IRAs untouched, spending Roth last -- allows the pre-tax balance to compound uninterrupted until age 73. A $1.6M IRA growing at 6% for 14 years reaches approximately $2.7M. The first-year RMD on that balance is roughly $101,900. Add a spouse's RMDs, Social Security, and brokerage income, and taxable income approaches $250,000 to $300,000 -- permanently in the 32-35% federal bracket for the rest of the household's life. All of it the result of doing nothing during the years when control was highest.

Phase one is constrained by earned income. While one spouse is still working, combined income limits Roth conversion capacity. The priority is modest conversions using remaining bracket space -- $15,000 to $20,000 per year -- and preparation for the clean window that opens when earned income stops. Patience here is correct. The real opportunity opens later.

Phase two is the high-value window. With zero earned income and only brokerage dividends as a baseline, the entire 22-24% federal bracket -- approximately $195,000 to $200,000 of headroom -- is available for Roth conversions. Three simultaneous moves run in parallel: convert $140,000 to $160,000 per year from pre-tax to Roth; harvest appreciated brokerage positions at 0% federal capital gains in years where total income stays below the threshold; and spend from the brokerage account rather than the IRA so the full conversion amount moves to Roth rather than covering living expenses.

Phase three is RMD coordination. A disciplined seven-year conversion program can reduce a $1.6M pre-tax balance to $1.1 to $1.3M by age 73. First-year RMD on $1.2M: approximately $45,300 versus $101,900 on the unmanaged balance. The $56,000 annual difference, at an 8-10 percentage point rate differential, represents more than $200,000 in after-tax savings over 20 years. The Roth accounts, now substantially larger, provide flexible tax-free income to manage IRMAA thresholds without triggering additional taxable income.

IRMAA is the primary guardrail on annual conversion amounts. The first tier for married filing jointly adds approximately $840 per person per year in Medicare premiums. Whether crossing that threshold is worth it depends on the size of the marginal conversion -- for a $10,000 overage the surcharge likely outweighs the benefit; for an $80,000 overage the long-term savings at 32% versus 24% justify it by a wide margin. Run the IRMAA calculation before finalizing each year's conversion target.

Social Security timing directly compresses the conversion window. Claiming at 67 instead of 70 adds roughly $28,900 in taxable Social Security income per year, reducing available bracket space by that same amount. Over a four-year window, delaying to 70 can preserve approximately $120,000 in additional conversion capacity -- converted at 22-24% rather than deferred to 32% as RMDs. The right choice depends on spending needs, health, and brokerage liquidity, not on any single variable in isolation.

Arizona's Social Security exemption means 100% of SS income is Arizona-tax-free regardless of federal treatment. On a $56,000 annual RMD reduction from the conversion work, the state tax savings alone are $1,400 per year -- $28,000 over 20 years -- on top of the federal savings. Arizona is a tailwind. The federal strategy is where the primary leverage lives.

• Spending from the brokerage account while leaving the IRA entirely untouched, allowing the pre-tax balance to compound into a large RMD problem.
• Treating Social Security timing and Roth conversion strategy as independent decisions rather than coordinated ones -- SS timing directly determines how much bracket space is available for conversions.
• Crossing IRMAA thresholds inadvertently without calculating whether the marginal conversion above the threshold justifies the Medicare premium surcharge.
• Missing the 0% federal capital gains window in years where income is low enough to harvest appreciated brokerage positions completely tax-free at the federal level.
• Waiting until RMDs begin to think about sequencing, by which point the pre-tax balance has compounded and the high-value conversion window has closed.