Nobody likes paying taxes. We don’t like paying them now, and we certainly don’t like the idea of paying them later, in retirement, when we’re living on a fixed income. And yet for most people approaching retirement, the majority of their savings sits in accounts that haven’t been taxed yet — IRAs, 401(k)s, and other tax-deferred accounts that the government has been patiently waiting to collect on for decades.
At Cardinal Advisors, we spend a lot of time thinking about this problem, and we don’t do it alone. Twice a year, we attend training with Ed Slott, a CPA widely known as “America’s IRA Expert.” It was Ed who put together a deceptively simple questionnaire — eight questions — that we believe every retiree, and everyone approaching retirement, should sit down and honestly answer. The earlier you ask them, the more room you have to plan. But even if you’re already retired, it’s not too late to make meaningful adjustments.
1. Are You Exposed to Higher Future Tax Rates?
For most people, the honest answer is yes. Today’s tax brackets are, historically speaking, quite low. A married couple can convert IRA money to a Roth up to the top of the 24% bracket — over $400,000 of income — and still be paying a rate that’s low by historical standards. Given the size of the national debt and the direction government spending tends to move, it’s reasonable to expect that tax rates will need to rise at some point. If they do, money left sitting in tax-deferred accounts today could be taxed at a much higher rate tomorrow.
2. Are You Using the Years Before RMDs Are Required?
There’s a window — often between retirement and the start of Required Minimum Distributions — where income tends to be lower. You’re no longer earning a paycheck, RMDs haven’t started, and you may not have begun collecting Social Security yet. This is often the single best opportunity to convert IRA funds to a Roth at a lower tax cost. Once RMDs begin, that flexibility narrows: you’re required to take the RMD first, in cash, before doing any additional conversions.
3. Will Your Retirement Accounts Create a Tax Problem for Your Heirs?
Under current law, most non-spouse beneficiaries — including adult children — inherit IRAs subject to what’s known as the 10-year rule. The account must be fully emptied within ten years of the original owner’s death. For a traditional IRA, every dollar withdrawn is taxable income to your heirs, potentially pushing them into a much higher tax bracket in the years they take distributions. A Roth IRA is still subject to the 10-year rule, but the money comes out tax-free. Whether or not you’ve done any planning yourself, your children need to understand this rule before it becomes their problem.
4. Are Roth Conversions Being Considered at the Right Time?
Timing matters. The goal of any Roth conversion strategy is to move money out of a tax-deferred account at the lowest reasonable tax rate — and right now, we’re working with historically low, known rates. Nobody can predict exactly what future tax law will look like, but converting during years of lower income, particularly before RMDs begin, is one of the more reliable ways to take advantage of the rates we have today.
5. Are You Giving to Charity in the Most Tax-Efficient Way?
If you’re 70½ or older and charitably inclined, a Qualified Charitable Distribution (QCD) allows you to send money directly from your IRA to a qualified charity without paying any tax on the distribution. Once you reach RMD age, a QCD can also count toward satisfying that year’s RMD — but the ordering matters, and the process needs to be handled correctly. This strategy only makes sense for people already inclined to give; it shouldn’t be the reason someone starts.
6. Do the 2026 Tax Rule Changes Affect You?
Recent tax law changes, including a new senior deduction for those over 65 and an increased SALT deduction cap, both come with income phase-out thresholds. These changes can interact with Roth conversion decisions in ways that aren’t obvious at first glance, which is exactly why tax planning needs to be viewed as part of a comprehensive plan rather than a single, isolated decision.
7. Are IRMAA Thresholds Limiting Your Roth Conversions?
IRMAA — the income-related surcharge on Medicare premiums — is a legitimate concern, and many people structure their entire financial plan around staying below its income thresholds. But for someone sitting on a large IRA facing steep RMDs down the road, a Roth conversion strategy may be worth a temporary IRMAA increase. The IRMAA surcharge resets each year; the tax-free benefits of a Roth conversion can last a lifetime — and often longer, passing to a surviving spouse and eventually to heirs.
8. Are You Prepared for the Widow’s Penalty?
Most people don’t plan far enough ahead to consider what happens when one spouse passes away. Expenses often don’t decrease as much as income does, tax brackets shift as a household moves from filing jointly to filing single, and IRMAA thresholds drop significantly. Roth accounts are particularly valuable here: they carry no RMDs, and withdrawals don’t increase a surviving spouse’s taxable income or Medicare premiums.
Why This Matters
Taken individually, each of these questions touches on a specific rule or strategy. Taken together, they point to a larger truth: the size of your IRA or 401(k) balance is only part of the story. What matters just as much is how — and when — that money eventually gets taxed, both for you and for the people you leave it to.
None of this is about converting everything to a Roth or paying more in taxes than necessary just for the sake of it. It’s about looking at the full picture — your income, your spouse, your heirs, and the years ahead — and making deliberate decisions rather than letting the tax code make them for you by default.
If you’d like to walk through these eight questions in the context of your own situation, we’d be glad to help.
