You Should Want to Pay More Taxes — Here’s Why Roth Conversions Can Save You a Fortune
Most people think taxes are the enemy. They’ll say things like, “I want to pay as little tax as possible” or “I’ll deal with taxes later.” But here’s the provocative truth:
You should want to pay more taxes.
Not today, necessarily — but strategically, intentionally, and at the right time.
Because every dollar you will ever earn is going to be taxed.
Not “maybe,” not “possibly,” not “depending on what Congress does.”
Every dollar is going to get taxed eventually.
Once you understand that, you can start making smarter long-term decisions — especially when it comes to Roth conversions.
Let’s break down why.
Every Dollar Gets Taxed — The Only Question Is When
When you earn income, you pay tax one of two ways:
- Now:
Through withholding on your paycheck, quarterly estimates, or the bill you settle on April 15. - Later:
By contributing to pre-tax accounts like a 401(k), 403(b), or Traditional IRA. This defers the tax but doesn’t erase it.
Many people mistakenly believe that contributing to a pre-tax retirement account saves them taxes. It doesn’t. It simply postpones them.
If you defer taxes inside a pre-tax account, that money grows — hopefully a lot — but eventually, when you pull it out:
- You pay tax on the original dollars, plus
- You pay tax on all the growth.
And if you don’t spend all that money yourself, your spouse or kids will. They inherit the tax bill along with the account.
There’s no scenario where those dollars escape taxation.
So the real question becomes:
Do you want to pay tax when your income is highest… or when your income is lowest?
That brings us to one of the most powerful retirement planning strategies available: understanding your Tax Valley.
What Is the “Tax Valley”?
High earners often spend their working years in elevated tax brackets — 32%, 35%, even 37%. While you’re earning significant income, there’s usually no room to do Roth conversions efficiently.
But that changes the moment you retire.
When you stop working, several things happen:
- Your earned income drops dramatically
- Your tax bracket usually drops with it
- You may have several years with very low taxable income before required minimum distributions (RMDs) begin
That period — from retirement until RMDs kick in — is what we call the Tax Valley.
It’s a temporary window of time when your taxable income dips to a level you may not see again in your lifetime.
Why does this matter?
Because once RMDs begin, the government forces you to withdraw money from your pre-tax retirement accounts — whether you want to or not.
And those withdrawals can:
- Push you back into a higher tax bracket
- Increase Medicare premiums (IRMAA)
- Trigger taxation on Social Security benefits
- Accelerate the depletion of your accounts
In some cases, retirees end up paying more tax in their 70s and 80s than they ever expected — even though they have less discretion over their income.
RMD Rules to Know (Updated)
As of now:
- If you were born 1951–1959, your RMD age is 73
- If you were born 1960 or later, your RMD age is 75
These ages matter because they define how long your Tax Valley may last.
If you retire at 60 and don’t face RMDs until 75, you have 15 years of tax-planning opportunity.
If you retire at 65, you still get a decade.
And those years can be extraordinarily valuable.
Why Tax Valleys Make Roth Conversions So Powerful
When your income drops, you have the opportunity to fill up lower tax brackets strategically.
Think about this:
- If you spent your working years in the 32% or 35% bracket,
- And now, in retirement, your income has dropped enough that you’re naturally sitting in the 12% or 22% bracket,
- Then every dollar you convert from Traditional → Roth is taxed at today’s low rate instead of tomorrow’s potentially much higher rate.
This is why I say:
You should want to pay more taxes — during your low-tax years.
Not more tax than necessary…
But more than zero.
Because paying zero tax during your Tax Valley is often wasteful.
Wasting the 12% bracket.
Wasting the 22% bracket.
Wasting one of the only times in your life when you can choose your tax rate.
If you don’t use those low brackets, you lose them forever.
And later, forced RMDs may push you back into the 24–35% brackets — meaning you’re paying significantly more tax on potentially much larger account balances.
That’s the trade-off that catches retirees off guard.
A Simple Example
Imagine someone with a large 401(k) who worked in the 35% tax bracket.
After retiring at 60, their income drops to mostly Social Security, interest, and some modest portfolio withdrawals.
Suddenly they have room to convert:
- $40,000 into the 12% bracket
- $70,000 more into the 22% bracket
Every year.
If they do nothing, those brackets sit unused.
But when RMDs begin at age 75, they may be forced to withdraw hundreds of thousands of dollars per year — pushing them back into 32%+ territory.
Which sounds smarter?
- Paying 12–22% voluntarily today
or - Paying 32–35% involuntarily later?
This is why the Tax Valley matters.
Roth Conversions Give You Control
A Roth conversion lets you:
- Pre-pay taxes at a known, controlled rate
- Lock in today’s lower brackets
- Reduce future RMDs
- Lower your lifetime tax bill
- Provide your heirs tax-free wealth
This is not about avoiding taxes.
It’s about controlling when you pay them and what rate you pay.
And for many, the period between retirement and RMDs is the lowest-tax window they will ever see again.
So Do You Want to Pay More Taxes?
If they are strategically chosen taxes, paid during low-income years,
targeting specific brackets you would otherwise waste,
that reduce your lifetime tax exposure…
Then yes.
You absolutely should want to pay more taxes.
Because the alternative is paying far more later — at higher rates, on larger balances, with less control.
This is the heart of smart retirement tax planning.
Final Thought
Roth conversions aren’t right for everyone, but understanding your Tax Valley is essential if you want to:
- Minimize lifetime taxes
- Reduce RMD pressure
- Increase tax-free wealth
- Preserve more of what you’ve earned
You will pay taxes on every dollar eventually.
The real question is whether you pay them at 12%… or 35%.