Guide
The Fill-The-Bracket Roth Sheet
A worksheet-driven way to use your low-income years before RMDs force your hand.
A gap year, the stretch between retiring and Social Security starting, a layoff year, or the years before Required Minimum Distributions begin, is the only time your household controls its own taxable income directly. This guide is the mechanical, do-it-yourself version of "filling the bracket": exactly how to calculate the room left in a target bracket, year by year, with Roth conversions and capital gains harvesting, without spilling into the next bracket or tripping the ACA subsidy cliff or an IRMAA tier.
18 pages. 6 charts. A fillable worksheet. No commitment, no sales agenda.
$76,000
Width of the 12% federal bracket in 2026, married filing jointly, the room available every year the bracket resets
$81,760
The 2026 ACA marketplace subsidy cliff (400% of the federal poverty level, household of two), restored after 5 years of enhanced subsidies
3 cliffs
Separate ceilings, the tax bracket, the ACA subsidy cliff, and the IRMAA lookback, that can each independently cap your room in a given year
What's inside
The marginal-rate arithmetic behind a bracket fill, worked with real numbers, straddling two brackets in the same conversion
Roth conversion mechanics that actually matter: no income limit, no recharacterization since 2018, and the pro-rata rule
Why capital gains harvesting and Roth conversions compete for the same room, and the order that matters
The 2026 ACA subsidy cliff, restored after 5 years of enhanced subsidies, and why it often binds before the tax bracket does
A single chart putting the tax bracket ceiling, the ACA cliff, and the first IRMAA tier on one income line
A full 6-year worked example: a household using ACA-era and Medicare-era gap years to fill successive brackets
The four specific, named ways households get bracket-filling wrong
A four-question decision framework, an 8-step action plan, and a fillable worksheet to run every year
The four ways this goes wrong
Not hypothetical risks. Each one shows up repeatedly in households doing this on their own, and each one is preventable with the arithmetic in this guide.
The round-number conversion
Converting $50,000, or '10% of the IRA,' because it felt like a reasonable amount, instead of calculating the actual room left in the target bracket. This either wastes cheap bracket room that will not come back, or spills into the next bracket, or a cliff, without anyone deciding to pay for it on purpose.
Ignoring the two-year IRMAA lookback
Filling a bracket to its ceiling in the year before, or the year of, Medicare enrollment without checking what that MAGI does to premiums two years later. A conversion sized perfectly against this year's tax bracket can still add thousands in Medicare surcharges starting two years out.
Ignoring the ACA subsidy cliff
Filling to the top of a tax bracket while still on ACA marketplace coverage, without checking that the cliff, restored for 2026, sits tens of thousands of dollars lower in MAGI than the bracket ceiling. Crossing it costs the entire subsidy for the year, not a percentage of it.
Stopping the whole strategy the first year the market drops
Halting conversions and harvesting after a down year because it feels wrong to convert when balances are lower. A lower account value often means more shares, and more future tax-free growth, can be converted for the same dollar amount of tax. A down year is frequently the best year to fill the bracket, not a reason to stop.
Frequently Asked Questions
What does it mean to 'fill the bracket'?
It means deliberately realizing ordinary income, through a Roth conversion, or long-term capital gains, through selling and rebuying an appreciated position, up to the top of a target tax bracket and no further, during a year when your income is unusually low. The room resets every January 1, and unused room in a given bracket does not carry forward to next year.
Why isn't the tax bracket ceiling the only number that matters?
Because the ACA marketplace subsidy cliff and the Medicare IRMAA tiers are both measured in Modified Adjusted Gross Income (MAGI), not taxable income, and both can sit tens of thousands of dollars below a tax bracket's ceiling once converted to the same income measure. For 2026, the ACA cliff is $81,760 of MAGI for a household of two, well below the $133,000 AGI-equivalent top of the 12% bracket. A household that only checks the bracket ceiling can lose an entire year's ACA subsidy, or trigger a Medicare surcharge two years later, without realizing either cliff was closer than the bracket.
Is the ACA subsidy cliff really back in 2026?
Yes. The enhanced premium tax credits that removed the 400% federal poverty level cliff from 2021 through 2025 expired December 31, 2025, and Congress did not extend them. For 2026 marketplace coverage, the premium tax credit reverts to the original ACA structure: available only from 100% to 400% of the federal poverty level, with the credit disappearing entirely, not phasing out gradually, above that line.
Related Resources
Want your own gap years mapped against your real numbers?
How many gap years you actually have, and how much room each one holds, depends on your birth year, your account mix, and your other income. Singh PWM is a flat-fee CFP® and Enrolled Agent practice serving Arizona pre-retirees and retirees on a fiduciary basis.
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