Craig Wear, CFP® explains partial Roth conversions as a slow, incremental approach to converting tax-deferred retirement assets to a Roth, often sized to fit within tax-bracket or Medicare thresholds. The primary goal is to reduce future taxable required minimum distributions (RMDs), but partial conversions may not fully offset those future tax liabilities.
Roth conversions can be a really powerful tax strategy for a lot of people, especially those who have really significant IRA balances or maybe other tax deferred retirement assets. Partial conversions, as I'll define them here, is where you're really implementing a very kind of slow and steady approach to doing Roth conversions, like the top of the tax bracket or top of the Medicare threshold or something like that. So partial amount may not be enough. Remember, the primary goal of doing Roth conversions is to lower your future requirement of distributions. All of those RMDs are going to be taxable income to you over the rest of your lifetime. That partial may not offset those gains.
