Attorneys with 7 Figure IRAs: What to Know About Retirement Taxes
September 27, 2026
Key Takeaways
● A large pre-tax retirement account can create a significant tax liability later. Required Minimum Distributions (RMDs) are based on your account balance—not how much income you actually need to spend.
● The assumption that you'll automatically be in a lower tax bracket in retirement may not hold. Social Security, pensions, investment income and large RMDs can keep taxable income surprisingly high.
● Attorneys can be particularly exposed. Years of maximizing SEP-IRAs, 401(k)s, profit-sharing and other pre-tax savings can result in substantial balances by the time RMDs begin.
● Taxes can become more complicated after the death of a spouse. A surviving spouse may face narrower single-filer tax brackets while still having substantial RMDs and other taxable income.
● Your heirs may face a tax bill, too. Under the SECURE Act's 10-year rule, many non-spouse beneficiaries must empty inherited pre-tax retirement accounts within 10 years, potentially adding significant taxable income during their peak earning years.
● Roth conversions can be useful—but they aren't automatically the answer. Converting some pre-tax assets during lower-income years may reduce future RMDs and create tax diversification, but the strategy needs to be evaluated against the cost of paying taxes today.
● The goal may be tax diversification, not eliminating your pre-tax balance. A thoughtful mix of pre-tax, Roth and taxable assets can give you greater flexibility to manage taxes throughout retirement.
● The right strategy depends on your numbers. Retirement timing, account balances, Social Security, state of residence, spending needs, charitable intentions and projected tax brackets should all be considered before deciding whether a Roth conversion makes sense.
You Built a Seven-Figure Pre-tax Retirement Account Practicing Law. Got a big SEP, pre-tax 401(k), or an IRA? Let's talk through the tax bill.
If you're an attorney, you may have made partner, run your own practice, or worked as in-house counsel. You likely saved for retirement just as you were told to.
Max out the SEP-IRA or SIMPLE. Roll over the 401(k) every time you changed firms. Defer as much comp as the plan allowed, because deferring taxes always sounded smart.
It was smart. Now, let's talk about its tax bill — and, just as importantly, about when that tax bill is a smaller problem than it looks.
"I'll be in a lower bracket in retirement" — maybe not
Almost every version of this problem traces back to one assumption: that retirement means a lower tax bracket. For a lot of people, that used to be true. It's often not true anymore — and especially not for attorneys with large pretax balances.
A few reasons the assumption breaks down:
● Required Minimum Distributions aren't based on what you spend. The IRS calculates the required withdrawal off your account balance and a life-expectancy factor — not your budget. You may have to withdraw much more than you need in a year. Each dollar is taxable, whether you spend it or save it.
● The deductions that lowered your working-years taxable income disappear. Retirement plan contributions reduced taxable income during your career, even in high-earning years. For solo practitioners, business deductions also reduced taxable income.
In retirement, most of that goes away. Taxable income can end up closer to gross income than it ever was while working.
● Nobody projects the balance forward. A $1.5M IRA today can grow at a reasonable rate for 15 more years. By the time RMDs start, it could reach $3–4M or more.
RMDs are a percentage of that larger balance. That withdrawal hits in one tax year. It also stacks on top of Social Security and other income.
● Two people's savings become one filer's tax problem. Married couples file jointly with two spouses' worth of deferred savings behind them. Once one spouse dies, the same account balance is taxed using a single person's smaller brackets. Almost nobody plans for this shift.
For someone with modest savings and a fully funded pension, "lower bracket in retirement" can still hold up. For a lawyer with a seven-figure pretax balance, this is usually just a general guideline. It often comes from an older generation. It is not based on a projection anyone actually ran.
Why attorneys are especially exposed
A few things make legal careers different from a lot of other high-earning professions when it comes to this specific problem:
● Solo practitioners and small-firm partners often built their own plans. No corporate HR department was watching contribution limits or coordinating with a tax strategist. A SEP-IRA, SIMPLE, or solo 401(k) grew each year. Often, no one stress-tested what it would look like when Required Minimum Distributions begin.
● Deferred comp and profit-sharing distributions add up fast. Firms that offered profit-sharing or deferred pay gave attorneys another way to delay income. This was smart in a high-earning year, but it can increase the final balance.
● High lifetime earnings mean high lifetime tax brackets. Attorneys often retire with more assets and higher Social Security benefits than most people. This can push them into tax brackets where RMDs cause the most harm.
● Many attorneys keep working well past 65 — because they can, and because they want to. Unlike careers with a hard physical cutoff, law can fit a work-optional lifestyle. It can include consulting, of-counsel roles, board work, or part-time practice. That's a good problem to have, but it cuts against a conversion strategy.
Every extra year you earn income can put you in a higher tax bracket. This can shrink or erase the low-income gap years.
Those low-income years often make Roth conversions cheaper. Attorneys who work into their late 60s or 70s often go from a high-earning year straight into RMDs. They have little or no time in a lower tax bracket in between.
The mechanics of the problem
Here's what actually happens. When the Required Minimum Distributions kick in, the required tax bill begins — and it does not stop. The IRS requires you to start taking withdrawals from all your pre-tax retirement accounts.
You must do this even if you do not need the money. The amount is calculated off your account balance and a life-expectancy factor, and it only grows each year.
For an attorney with a $2–3M pretax IRA, the RMD alone can be $80,000–$120,000 in the first year. This is on top of Social Security, a pension if you have one, and other taxable income.
That combination routinely pushes retirees into tax brackets they assumed they'd left behind.
It doesn't stop at income tax. Two other triggers matter just as much:
● IRMAA surcharges — Medicare Part B and Part D premiums increase on a sliding scale once your income crosses certain thresholds. RMDs can push you across one of those lines, sometimes costing thousands extra per year, per spouse.
● Social Security taxation — up to 85% of your Social Security benefit can become taxable once your combined income is high enough, which a large RMD makes almost automatic.
None of this is a one-year problem. RMDs continue — and grow — for the rest of your life.
The widow's tax penalty
There's a second layer to this that catches a lot of couples off guard. While both spouses are alive, you're filing jointly, with wider tax brackets and more room before you hit the higher rates. The moment one spouse dies, the survivor usually must file as a single taxpayer, often starting the next tax year.
The problem: the RMD doesn't shrink to match. The surviving spouse often still withdraws about the same amount from the same pretax IRA.
But now they face single-filer tax brackets, which rise faster than joint brackets. The same income taxed at 22% to 24% for a couple can be taxed at 32% or more.
This can happen when a surviving spouse files alone. They may also lose the deceased spouse’s Social Security benefit. In many cases, they may also lose part of a pension.
The 10-year rule for beneficiaries
The other piece that's changed and surprises a lot of clients: under the SECURE Act, most non-spouse beneficiaries — including adult children — who inherit a pretax IRA no longer get to stretch withdrawals over their own lifetime. They now have to empty the account entirely within 10 years of the original owner's death.
For an attorney’s adult children, who are often in their peak earning years, this can be a problem. They may be mid-career professionals, and some are attorneys too. A large pretax inheritance may then stack on top of their high salaries.
This happens within whatever 10-year window applies to them. A $2M inherited IRA paid out over 10 years adds $200,000+ of taxable income each year. This can push a beneficiary into a higher tax bracket. They cannot change the timing to spread the tax impact.
Why Roth conversion is the tool most people reach for
There is usually a window. It spans the years after you stop working. It ends when RMDs and Social Security both begin. During this time, taxable income is often lower.
That gap is the best time to convert pretax IRA funds to a Roth. You pay tax at today’s rates on your terms, not the IRS’s later.
Done well, a multi-year conversion strategy fills lower tax brackets on purpose. It reduces the balance that will face future RMDs. It can lower IRMAA and Social Security taxes later.
It also protects the surviving spouse from a higher single-filer bracket. It can leave heirs a tax-free asset. It avoids a six-figure tax hit during their peak earning years.
That's the case for converting. It's a real one. It’s also not automatic. An attorney reviewing this should hear the other side first. They should not rush to pay the IRS early.
Where the conversion case gets weaker
● You're paying a known cost to avoid an unknown one. A conversion means paying tax today, in dollars you know the value of, to avoid a tax you're only estimating you'll owe later. That estimate depends on future brackets, future growth, future spending, and how long you live — all unknowable. The cost of converting is certain the moment you file; the benefit is a projection.
● The money to pay the tax has to come from somewhere. Conversions are only efficient when the tax is paid with money outside the IRA. For an attorney whose net worth is concentrated in qualified plans — heavy SEP-IRA, heavy 401(k), lighter taxable brokerage — funding a multi-year conversion out of pocket can be a real constraint, not just a paperwork detail. Paying the tax from the IRA itself defeats much of the math.
● You might not live long enough for it to matter. The case for converting assumes a long retirement with RMDs compounding for 20-plus years. An attorney who converts aggressively in their early 60s and dies in their mid-70s has prepaid tax. That money might have faced similar or lower tax rates. It also could have been taxed over a much shorter withdrawal period.
● A move to a no-income-tax state can solve part of this for free. Attorneys relocate in retirement more than most — Florida, Texas, Tennessee, and similar states are common landing spots. Converting at today's state tax rate, ahead of a move that would have made the same withdrawals state-tax-free anyway, gives away money unnecessarily.
● RMDs aren't as bad as the worst-case math suggests. Qualified Charitable Distributions let a charitably inclined retiree send IRA dollars directly to charity, satisfying the RMD without it counting as income. The standard deduction and bracket fill absorb the first tranche of any RMD at low or no tax. And a surviving spouse's overall income often drops too, partially offsetting the harsher single-filer brackets.
● Conversions add ongoing complexity and cost. A multi-year conversion strategy requires yearly projections, CPA coordination, and IRMAA monitoring — real ongoing advisory work, not a one-time decision.
The honest middle ground
The choice isn't "convert everything" versus "do nothing." For most attorneys in this position, a better goal is tax diversification. This means a planned mix of pretax, Roth, and taxable assets.
In any retirement year, you can choose which bucket to use. Your choice can depend on that year’s tax bracket, spending needs, and market conditions.
Some conversion, timed carefully in genuinely low-income years, usually earns its keep. Converting aggressively just because a balance is large does not.
The right amount, if any, depends on real numbers — your balance, your bracket, your spending plan, your state, your health, and your charitable intentions — run specifically for you, not assumed generically from a rule of thumb built for someone else's retirement.
What to do next
If you are an attorney with over $1M in pre-tax retirement accounts, and you are 10–15 years from retirement, listen up. Or, if you are already retired and have not started RMDs yet, this matters too.
The key question is not, “Should I convert?” It’s this: What will your tax bracket look like when RMDs start? What will it look like if you keep working past 65? And where, if anywhere, will a conversion pay for itself?
That's a numbers exercise, not a guess. It takes running your actual balances, your actual pension and Social Security timing, and your actual bracket projections forward, then testing what a conversion strategy would — and wouldn't — change.
If that's not something you've had someone map out for you, it's worth the conversation.
Sources:
https://www.irs.gov/publications/p970
https://home.treasury.gov/news/press-releases/sb0372
https://www.wealthspire.com/blog/6-important-considerations-for-retiring-biglaw-partners/
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