Roth Conversion Strategy for Orthopedic Surgeons
Most orthopedic surgeons accumulate $2–6M in pre-tax retirement accounts from years of 401(k), cash balance plan, and defined benefit contributions. Without a conversion plan, RMDs at age 73–75 will force those distributions at 32–37%. There's typically a 5–15 year window between practice exit and RMD start where you can convert at 22–24%. The math on that spread is often $300K–$700K in lifetime taxes saved.
Roth conversion is different from the backdoor Roth
The backdoor Roth IRA gets new money into Roth during your high-income career ($7,500–$8,600/yr). Roth conversion is about existing pre-tax money — the balance you've already built up in traditional IRAs, rollover IRAs, and 401(k)/403(b) accounts over 20+ years of practice. You pay ordinary income tax on converted amounts in the year of conversion, but those assets then grow and distribute 100% tax-free for the rest of your life, with no required minimum distributions on converted Roth IRA balances.
The question isn't whether you'll pay taxes on that pre-tax balance. You will — either when you convert deliberately, or when RMDs force distributions on the IRS's schedule. The question is: at what rate, and under what circumstances?
| Roth conversion in golden window | No conversion — RMD forced | |
|---|---|---|
| Who controls timing? | You | IRS (fixed schedule) |
| Who controls amount? | You (bracket-fill to target) | IRS formula (balance ÷ divisor) |
| Typical marginal rate for ortho surgeons | 22–24% | 32–37% |
| Medicare IRMAA exposure | Manageable (you choose amount) | Often unavoidable at large balances |
| Estate planning | Roth passes to heirs tax-free | Heirs pay ordinary income tax on inherited IRAs |
Why ortho surgeons are Roth conversion candidates almost by definition
A spine surgeon maxing a solo 401(k) ($69,000/yr in 2026) plus a cash balance plan ($150K–$250K/yr at late career, per cash balance plan guide) for 15 years accumulates $3–6M in pre-tax assets before accounting for investment growth. That's not a planning concern — it's exceptional wealth creation. The question is simply which bracket pays for it.
Most orthopedic surgeons exit full practice between ages 58–65. Social Security optimally delays to 70 for most. RMDs begin at 73 (born 1951–1959) or 75 (born 1960+) per SECURE 2.0.1 The window between practice exit and RMD start is typically 8–17 years for an ortho surgeon — a very long bracket-arbitrage runway.
If you sell your private practice or ASC equity, the sale year typically generates a large ordinary income + long-term capital gains event. Roth conversions in that year stack on top of already elevated income. The optimal conversion years are usually 2–5 years after the sale event, once income normalizes. Sequencing the practice exit, ASC equity sale, and conversion window requires careful coordination — which is why an advisor with ortho-specific experience matters here.
2026 federal income tax brackets (married filing jointly)
These are the brackets you're targeting when deciding how much to convert in a given year. The goal: convert enough to "fill" a target bracket without crossing into the next.2
| Rate | MFJ taxable income range (2026) | Conversion strategy note |
|---|---|---|
| 10% | $0 – $24,800 | Standard deduction absorbs much of this band |
| 12% | $24,800 – $100,800 | Excellent bracket; limited space at $76K wide |
| 22% | $100,800 – $211,400 | Primary target — $110K wide, favorable rate |
| 24% | $211,400 – $403,550 | Primary target — $192K wide, best mix of rate and capacity |
| 32% | $403,550 – $512,450 | Acceptable if window is short or balances are very large |
| 35% | $512,450 – $768,600 | Generally avoid converting into this bracket |
| 37% | $768,600+ | Never convert into this during active practice |
The 2026 standard deduction for married filing jointly is $32,200.2 This means conversion room calculation isn't simply "bracket top minus other income" — it's "bracket top minus max(0, other income − $32,200)." A surgeon with $80K of other income has taxable income of $47,800, leaving $403,550 − $47,800 = $355,750 of conversion room in the 24% bracket — nearly $356K per year they can convert at no more than 24%.
The three conversion windows for orthopedic surgeons
Window 1: Fellowship and early attending years (often overlooked)
A PGY-5 resident or fellow earning $70K–$90K is in the 22% bracket — the lowest marginal rate they'll face for the next 30+ years. Most ortho residents don't have substantial pre-tax IRA balances, but if any exist (prior employer 401(k) from a non-medical job, or any pre-tax rollover), converting now costs 22 cents on the dollar instead of 35–37 cents later. This window is short and the amounts are typically small, but the compounding advantage on early Roth balances is dramatic. Also: the fellowship window is when to maximize direct Roth contributions (if income is below $153K single) or start backdoor Roth contributions — both compound for 35–40 years.
Window 2: Mid-career income dip (less predictable, high opportunity when it happens)
Some ortho surgeons experience a meaningful income dip: a practice transition between employment contracts, a maternity or paternity leave, a sabbatical, an injury reducing procedural volume, or a year between group partnership tracks. If your W-2/1099 income drops from $900K to $300K for a year, the 24% bracket ceiling ($403,550 MFJ) is now accessible for substantial conversions that would cost 37% in a full-income year. These windows are unpredictable — which is why your advisor should be running an annual conversion check on your situation, not just a five-year plan set-and-forgotten.
Window 3: Post-practice, pre-RMDs — the golden window (highest impact for most ortho surgeons)
This is where the real math lives. You've wound down your practice at 60–65. Social Security hasn't started yet (or you're delaying to 70 for maximum benefit). RMDs are 8–15 years away. Your W-2/1099 income has dropped from $700K–$1.5M to $0–$100K (portfolio dividends, maybe some consulting).
In this window, you can typically convert $200K–$350K/yr and pay 22–24% at the margin. Compare that to the 32–37% your RMDs would face if you let the balance compound unchecked to age 73–75.
What happens if you don't convert — the RMD snowball
Required minimum distributions are calculated as account balance ÷ IRS life expectancy factor. The 2022 Uniform Lifetime Table (still current) gives a divisor of 26.5 at age 73 and 24.6 at age 75.3 That sounds modest — until you account for what a large, still-growing pre-tax balance produces:
| Pre-tax balance at RMD start (age 75) | Year-1 RMD (÷ 24.6) | Added to $80K other income = total taxable income | Marginal bracket |
|---|---|---|---|
| $1.5M | $61,000 | ~$141,000 | 22% |
| $2.5M | $102,000 | ~$182,000 | 22%–24% |
| $4M | $163,000 | ~$243,000 | 24% |
| $6M | $244,000 | ~$324,000 | 24%–32% |
| $8M | $325,000 | ~$405,000 | 32%+ |
RMDs also grow each year as the divisor shrinks. At age 80, the divisor is 20.2; at 85, it's 16.0. A $4M pre-tax balance will force $200K+ in taxable distributions every year from age 80 onward — permanently in the 24–32% bracket, with no ability to control the timing or amount. And unlike long-term capital gains (15–20%), RMD income is ordinary income taxed at top marginal rates.
Medicare Part B and Part D premiums surcharge based on your MAGI from two years prior. In 2026, the first IRMAA surcharge tier begins at $212,000 MAGI for married filers — adding ~$900+/yr per person. High-balance surgeons with unmanaged RMDs often land in the upper IRMAA tiers ($4,200–$5,600+/yr extra) because their prior-year RMD income was beyond their control. Roth IRA distributions don't count toward MAGI for IRMAA purposes — another advantage of converting pre-tax assets while you can.
Roth conversion bracket calculator
Enter your situation to see how much you can convert annually to a target bracket, what it costs now, and how RMDs compare if you don't convert.
Three detailed scenarios
Scenario A: Spine surgeon, retires at 62, born 1963 (RMD age 75)
Dr. M retires at 62 with a $4.2M rollover IRA from 20 years of group 401(k) and cash balance plan contributions. Married. His spouse earns $50K/yr teaching. He delays Social Security to 70. Conversion window: ages 62–74 = 13 years.
Other income: $50K spouse W-2 + $25K dividends = $75K. After $32,200 standard deduction, taxable base = $42,800 (in the 12–22% bracket). The top of the 24% bracket is $403,550, leaving $360,750 of conversion room annually.
He converts $220K/yr — the tax on that conversion, starting from his $42,800 base, is approximately $41,000 (effective ~18.6% on the converted amount, blended across 22% and 24% brackets). Over 13 years: roughly $533K total taxes on $2.86M of conversions.
Without conversions, the $4.2M balance growing at 6% becomes $8.9M by age 75. Year-1 RMD: $8.9M ÷ 24.6 = $362K. Added to SS at 70 ($52K) + dividends ($25K) = $439K taxable income — solidly in the 32–35% bracket. He pays 32% on every distribution, with no flexibility. Lifetime RMD taxes on the unconverted balance dwarf the $533K conversion cost.
Scenario B: Hospital-employed joint replacement surgeon, born 1955 (RMD age 73)
Dr. K retires at 60 with a $1.8M 403(b) rollover. No ASC equity. She has a $40K/yr pension, no Social Security until 67, RMD age 73. Window: ages 60–72 = 12 years.
Other income: $40K pension + $15K dividends = $55K. Taxable base: $22,800. She converts $150K/yr, filling the 22–24% bracket. Tax on that conversion: ~$27K/yr (effective ~18%). Over 12 years: ~$324K taxes paid on $1.8M converted. Her remaining pre-tax balance at 73 is ~$400K — generating $15K/yr in RMDs, modest and manageable. IRMAA stays at base rate. The conversion essentially eliminates the RMD problem entirely.
Scenario C: Private practice ortho selling at 60 — timing the conversion after the exit event
Dr. B sells his private practice for $1.6M (mostly LTCG) in the year he turns 60. He also has a $2.3M rollover IRA. In the sale year: his W-2 from the practice runs to September ($280K) + $1.6M LTCG + $35K dividends. Converting any pre-tax IRA in this year would stack ordinary income on top of an already elevated total — inefficient.
Instead: he converts aggressively in years 2–5 post-sale, when his income is $65K (investment income only). He converts $300K/yr for 5 years, staying within the 24% bracket. Total tax: ~$267K on $1.5M converted. Then reassesses as SS begins at 70. The lesson: sequence the practice exit first, then convert. Don't let the excitement of a liquidity event trigger a conversion in the wrong year.
Common mistakes in Roth conversion planning for orthopedic surgeons
Practice sale proceeds — even if LTCG — push MAGI above practical conversion brackets. Converting in this year often means paying 35–37%. Wait for income to normalize in years 2–3 post-sale.
Medicare IRMAA is based on your MAGI from two years prior. If you convert $500K in 2026, Medicare uses your 2026 MAGI to set your 2028 Part B/D premiums. Know the IRMAA tier thresholds before choosing conversion amounts — sometimes $30K less in conversions saves $4,000+/yr in premiums.
Many surgeons convert conservatively at first ("let's try $100K this year") and find the window closes faster than expected — SS starts, a pension kicks in, part-time consulting ramps up. Model the full window and be aggressive in the years before other income streams start.
If you live in a high-income-tax state during your conversion window (California 13.3%, New York 10.9%), add that to your effective rate. Converting $200K at 24% federal + 13% California = 37% total — not materially better than RMD rates. Surgeons planning to relocate to a no-income-tax state (Florida, Texas, Nevada, Washington) should time their major conversions after the move.
Converting a traditional IRA to a Roth IRA does eliminate RMDs on those Roth IRA assets — for your lifetime. Inherited Roth IRAs are subject to 10-year depletion for non-spousal beneficiaries under the SECURE Act, but the distributions are still tax-free. A Roth 401(k) also has no lifetime RMDs after SECURE 2.0 § 325 (effective 2024) — though rolling to a Roth IRA is usually cleaner for flexibility.
The optimal conversion amount changes every year as your portfolio grows, tax law adjusts, income sources change, and life circumstances evolve. A static five-year conversion plan set in year one is almost certainly wrong by year three. Annual review with an advisor is standard for high-balance conversion strategies.
Conversion decision framework for orthopedic surgeons
- Catalog all pre-tax accounts. Rollover IRAs, traditional IRAs, 401(k)/403(b) accounts, SEP-IRAs, SIMPLE IRAs. Sum the balances. This is the pile you're managing.
- Project the no-conversion balance at RMD start. Apply realistic growth (5–7%/yr) from today to age 73 or 75. What does your Year-1 RMD look like at that balance?
- Identify all income sources in your conversion window. SS (at what age?), pension, part-time consulting, portfolio distributions, rental income. What's your base taxable income before conversions?
- Calculate annual conversion room at your target bracket. Bracket top − taxable base income = annual conversion capacity. How many years in the window? Total conversion potential?
- Model the two scenarios NPV side-by-side. Total lifetime taxes — conversion plan vs. RMD-as-forced. For a surgeon with $3–6M pre-tax, the NPV difference is often $300K–$800K in your favor if you convert efficiently. A fee-only advisor who builds this model properly — incorporating IRMAA, state taxes, Social Security optimization, and estate planning — is worth the fee many times over.
- Execute, verify IRMAA thresholds, and review annually.
Related guides on this site: retirement account hierarchy and tax stacking · backdoor Roth IRA mechanics · FI number and retirement timeline · portfolio strategy for high earners · S Corp and FICA savings
Talk to an advisor who understands ortho surgeon retirement planning
Roth conversion optimization — modeling the window, sizing annual amounts, sequencing against practice sale events, IRMAA tier management — is not a DIY calculation for a $3–6M pre-tax balance. We match orthopedic surgeons with fee-only advisors who specialize in this exactly.
Ortho Advisor Match is a matching service. We connect you with vetted fee-only financial advisors in our network — we don't manage money or provide advice ourselves. Advisors in our network are fiduciaries who charge transparent fees, not product commissions.
Sources
- IRS Publication 590-B (2025), Distributions from Individual Retirement Arrangements; SECURE 2.0 Act § 107 (P.L. 117-328) establishing RMD ages 73 and 75 based on birth year. irs.gov/publications/p590b
- IRS Revenue Procedure 2025-32, 2026 inflation-adjusted tax parameters including income tax brackets, standard deduction ($32,200 MFJ), and Roth IRA phaseout thresholds. Values verified against IRS newsroom release "IRS releases tax inflation adjustments for tax year 2026." irs.gov/pub/irs-drop/rp-25-32.pdf
- IRS Uniform Lifetime Table (Rev. Proc. 2022-26, effective 2022), Appendix B to Reg. § 1.401(a)(9)-9. Divisors: age 73 = 26.5; age 75 = 24.6; age 80 = 20.2; age 85 = 16.0. irs.gov/publications/p590b
- SECURE 2.0 Act § 325 (P.L. 117-328): elimination of Roth 401(k)/403(b)/TSP lifetime RMDs effective January 1, 2024. SECURE 2.0 Act § 107: RMD age 73 for born 1951–1959, age 75 for born 1960+. congress.gov
Tax values verified as of May 2026. Tax law changes frequently; confirm current-year values with IRS.gov or a licensed tax professional before making financial decisions.