The Situation

Daniela spent eight years as a senior software engineer at Amazon in Austin, steadily climbing to a senior SDE role and, along the way, building a serious retirement balance — roughly $520,000 across a traditional 401(k) and a rollover IRA from an earlier employer. She was a careful saver, maxed her contributions most years, and never touched the money. On paper, she was doing everything right.

In early 2025 she left to co-found a climate-tech startup. To fund the company and stay lean, she cut her own salary to $45,000 for the year. Her spouse, a part-time consultant, brought in about $30,000. For the first time in a decade, the household's taxable income had fallen off a cliff — from north of $360,000 to under $80,000.

The Gap We Found

Daniela's CPA was handling her return accurately, and her old 401(k) provider was managing her investments fine. But nobody was connecting the two facts that mattered most: she had a very large pre-tax retirement balance, and she was sitting in the lowest tax bracket she'd see for the rest of her career. That combination is a rare, time-limited opportunity — and it wasn't on anyone's radar, because no single advisor was looking at her income and her retirement accounts at the same time.

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What We Did

The core move was a series of partial Roth conversions timed to her low-income year. Rather than convert the whole balance at once and spike her bracket, we converted just enough each quarter to "fill up" the 12% and 22% brackets without tipping into higher rates. Over the year we moved roughly $180,000 from her traditional accounts into a Roth IRA, paying tax on those dollars at an effective rate of about 15% — versus the 32–35% marginal rate she'd have faced during her Amazon years and likely again once the startup succeeds or required minimum distributions begin.

We paired the conversions with careful cash-flow and estimated-tax planning so the conversion tax didn't create a surprise. Alphanso's AI agents modeled each quarter's conversion, calculated the incremental tax owed, and flagged the estimated payment before each deadline — so Daniela never got caught under-withheld or hit with a penalty. We also coordinated the timing around her startup's low-salary period, keeping enough dry powder in taxable accounts to cover both living expenses and the tax bill.

Finally, we made sure the converted dollars went to work: the Roth balance was invested for long-term growth, since every dollar of gain from here forward is now tax-free for life.

The Result

• ~$180,000 converted to Roth at roughly a 15% effective tax rate — locking in tax-free growth for decades.
• Estimated six-figure lifetime tax savings versus paying tax on those same dollars at her expected future rates in retirement.
• Zero underpayment penalties, thanks to quarter-by-quarter estimated-tax management.
• Peace of mind — Daniela turned a scary income drop into the single best tax year of her financial life.

Why This Worked

The win didn't come from a clever product — it came from seeing the whole picture at one moment in time. A CPA files the return; an investment manager runs the portfolio; but only an integrated, fiduciary team notices that a founder's lean year is a closing window to move money from "taxed later at a high rate" to "never taxed again." Alphanso's flat fee meant there was no conflict in recommending conversions that shrank her assets under management — the advice was simply what was right for her. If your income is about to drop — a sabbatical, a founder year, a gap between roles — it may be the most valuable tax year you'll ever have. Let's talk about it.

This case study is a composite illustration based on real Alphanso client scenarios. Names and identifying details have been changed for privacy. Results are not guaranteed and will vary based on individual circumstances. All investing involves risk, including the possible loss of principal. Alphanso LLC is a registered investment adviser.