Step 1: Isolate IRA Dollars for Conversion

The first step is clarity: determine which portion of your IRA you truly don’t need for retirement income.

Jamie and Jeffrey’s pensions provide $10,000/month of guaranteed income, covering their living expenses.

That meant their IRA wasn’t needed for day-to-day spending — making it an ideal candidate for Roth conversion.

Step 2: Reallocate Into a Simplified Accumulation Annuity (for structured Roth Conversions)

Instead of exposing their IRA to market swings or fees, Jamie and Jeffrey repositioned it into a 14-Year Simplified Accumulation Annuity designed to make Roth conversions predictable and painless.

Here’s why this works so well:

• Full principal protection — the original $800,000 is shielded from market downturns.
• 15% upfront bonus — credited immediately, creating built-in “interest” that can help fund conversion taxes.
• Up to 7% annual growth — linked to the S&P 500, with no downside risk.
• Zero fees — unlike many investment accounts, all growth stays inside the plan.

💡 Importantly, the annuity allows flexibility: you can have the contract pay the taxes directly (so there’s no out-of-pocket cost), or you can choose to pay taxes separately depending on your broader tax strategy.

This vehicle became the “safe side” of their retirement plan — stable, predictable, and purpose-built for funding the conversion process.

Step 3: Let Growth Assets Keep Working

Because the annuity handled the heavy lifting of the Roth conversions, Jamie and Jeffrey could leave their Roth dollars and after-tax investments in the market, positioned for long-term growth.

By clearly separating safety (annuity-backed conversions) from risk (market investments), they gained both peace-of-mind and significant growth potential.

Step 4: Execute a Tax-Efficient Conversion Schedule

Converting too much at once can push retirees into higher tax brackets.

That’s why this strategy emphasizes tax bracket management — converting as much as possible within favorable thresholds.

For Jamie and Jeffrey, the 14-year schedule looked like this:

• $110,000/year for 5 years
• $75,000/year for 5 years
• $60,000/year for 3 years
• Final $19,285 in year 14

By front-loading in lower-income years and tapering as income rises, they maximized efficiency while avoiding unnecessary tax spikes.

Step 5: Reinvest Converted Roth Dollars Back Into the Market

Each year, 10% of the newly converted Roth balance is pulled from the annuity contract and reinvested into a tax-free market portfolio (giving the now tax-free dollars, more long-term growth potential).

This created a compounding flywheel: safe, predictable Roth conversions fueling aggressive, long-term tax-free growth.

The Results: From $800k to $1.6M

At the end of the 14 years, Jamie and Jeffrey’s projected results were:

• Total Roth Value: $1.6 million (tax-free)
• Additional Net Growth: ~$521,000 beyond the cost of conversion
• Net Annual Return: ~5% (after accounting for taxes)
• Taxes: 100% Funded by contract
• Market Risk: ZERO
• Fees: ZERO

Their $800,000 IRA — once a tax time bomb — was transformed into a predictable, tax-free retirement and legacy asset.

Why This Matters

Most retirees underestimate the tax burden tied to their IRAs and 401(k)s.

Every dollar withdrawn is taxable. If tax rates rise in the future, that burden only grows.

By using a simplified accumulation annuity to fund Roth conversions, retirees gain:

• Full protection of their principal
• No out-of-pocket tax burden if structured properly
• Zero fees
• The ability to lock in predictable Roth conversion results

For Jamie and Jeffrey, this meant turning uncertainty into control — and a tax liability into a tax-free legacy.

Interested in exploring whether a Roth Conversion Hybrid Strategy makes sense for you?

Let’s chat.