So, how do you make sure you are "low income" during this conversion period? Is it necessary to have taxable account savings to supplement your income during this time? Could someone post an example of how you would support yourself and still remain low-income enough for this to work?
The level of your income (i.e. your spending, since you're now retired) doesn't really matter as far as the conversion goes. The process works the same at all income levels. When you rollover your T-IRA to a Roth IRA, that is a taxable event (taxed as regular income). It's just that the higher it is, the more you will owe in taxes. And since taxes need to be included in your spending number, the higher your spending, the higher your taxes, and the greater amount you'll be taxed on. It's a vicious cycle.
So to use real numbers. We'll look at a married couple in 2014:
If you convert $30K from traditional to Roth, you'd have income of $30K. Minus your standard deductions/exemptions of $20,300, you're left paying taxes on $9700.00, which is $973.00. This leaves $29,027.00 of that $30K to spend, or 96.76% of the conversion amount.
If you convert $50K from traditional to Roth, you'd have income of $50K. Minus your standard deductions/exemptions of $20,300, you're left paying taxes on $29,700.00, which is $3551.00. This leaves $46,449.00 of that $50K to spend, or 92.90% of the conversion amount.