Client Profile
A financial advisor is working with a married couple approaching retirement who want to strategically reduce their long-term tax burden and avoid large Required Minimum Distributions (RMDs) later in retirement.
The clients’ financial profile is typical of many high-savings households nearing retirement:
Household Overview
- Filing Status: Married Filing Jointly
- Residence: Massachusetts
- Planning Horizon: 2026–2035
- Goal:
- Reduce future RMD exposure
- Optimize long-term tax brackets
- Avoid unnecessary Medicare IRMAA surcharges
- Minimize exposure to the Net Investment Income Tax (NIIT)
Planning Challenge
The advisor identifies several key tax risks:
- Large Future RMDs
- Nearly $4 million of pre-tax retirement assets could create significant taxable income starting in 2036.
- Medicare IRMAA Surcharges
- Roth conversions increase MAGI and may trigger higher Medicare premiums.
- Net Investment Income Tax
- Exceeding the $250K MAGI threshold for MFJ would trigger the 3.8% NIIT.
- Social Security Taxation
- Roth conversions could increase the taxable portion of Social Security once benefits begin.
The advisor decides to build a multi-year Roth conversion strategy that carefully manages these thresholds.
Using Hive AI Tax Planning
Step 1: Input Client Data
The advisor enters the client’s financial data into Hive AI Tax Planning, including:
- Prior tax returns
- Retirement account balances
- Income projections
- Social Security timing
- Medicare start dates
- Investment income assumptions
- Tax attributes and deductions
Hive AI immediately analyzes:
- Federal tax brackets
- Medicare IRMAA thresholds
- Net Investment Income Tax thresholds
- Future RMD projections
The advisor then asks Hive:
“Build a multi-year Roth conversion schedule from 2026–2035 while avoiding NIIT and managing IRMAA exposure.”
Hive AI Generated Roth Conversion Schedule
Hive AI generates a multi-year optimized Roth conversion plan based on the inputs.
| Year | Taxable Income Before Conversion | MAGI Before Conversion | Medicare MAGI Before Conversion | Max Conversion (NIIT Limit) | Max Conversion (IRMAA Limit) | Recommended Conversion | Ending Taxable Income | Added Federal Tax |
| 2026 | $165,000 | $197,200 | $207,200 | $52,800 | $67,800 | $52,800 | $217,800 | $11,744 |
| 2027 | $117,800 | $150,000 | $160,000 | $100,000 | $115,000 | $100,000 | $217,800 | $22,128 |
| 2028 | $67,800 | $100,000 | $110,000 | $150,000 | $165,000 | $150,000 | $217,800 | $33,128 |
| 2029 | $52,800 | $85,000 | $95,000 | $165,000 | $180,000 | $165,000 | $217,800 | $36,428 |
| 2030 | $52,800 | $85,000 | $95,000 | $165,000 | $180,000 | $165,000 | $217,800 | $36,428 |
| 2031 | $116,550 | $148,750 | $158,750 | $101,250 | $116,250 | $101,250 | $217,800 | $22,403 |
| 2032 | $116,550 | $148,750 | $158,750 | $101,250 | $116,250 | $101,250 | $217,800 | $22,403 |
| 2033 | $116,550 | $148,750 | $158,750 | $101,250 | $116,250 | $101,250 | $217,800 | $22,403 |
| 2034 | $116,550 | $148,750 | $158,750 | $101,250 | $116,250 | $101,250 | $217,800 | $22,403 |
| 2035 | $116,550 | $148,750 | $158,750 | $101,250 | $116,250 | $101,250 | $217,800 | $22,403 |
Insights Generated by Hive AI
Hive AI highlights several strategic insights:
1. Early Retirement Window is Optimal
The largest Roth conversions occur during:
2028–2030
When earned income declines and Social Security has not yet begun.
This allows conversions of $150K–$165K annually.
2. IRMAA and NIIT Become Binding Constraints
Hive identifies the tightest constraint each year.
Most years, the strategy caps conversions to stay below:
- NIIT threshold: $250K MAGI
- IRMAA threshold: ~$275K MAGI
3. Conversion Strategy Smooths Income
Instead of one large conversion, Hive recommends annual conversions that stabilize taxable income around ~$218K.
This approach:
- Maintains predictable tax rates
- Avoids Medicare premium spikes
- Maximizes Roth asset growth
4. Long-Term RMD Reduction
Hive projects that implementing this plan will convert over $1.1M of pre-tax assets before RMD age.
This could significantly reduce future:
- RMD income
- Social Security taxation
- Medicare premiums
Total Benefits
By following the Hive-generated Roth conversion schedule, the advisor helps the client:
Tax Efficiency
- Convert $1M+ into tax-free Roth assets
- Avoid unnecessary 3.8% NIIT exposure
Retirement Income Planning
- Reduce large future RMD spikes
- Maintain flexible tax-free withdrawal options
Medicare Optimization
- Avoid multiple IRMAA premium tiers
Advisor Productivity
Hive AI produces the full schedule in seconds, eliminating hours of manual modeling.
Conclusion
Multi-year Roth conversion planning requires analyzing:
- tax brackets
- investment income
- Social Security timing
- Medicare IRMAA thresholds
- future RMDs
Traditionally, building this type of model could take hours of spreadsheet work.
Hive AI Tax Planning automates the entire process.
With structured client inputs, Hive instantly produces a tax-optimized multi-year Roth conversion strategy, allowing advisors to focus on planning conversations rather than calculations.