Tax avoidance isn't always the best goal.

One issue is IRMAA. You mention, "for the next three years until retirement." They are 57 now, plan to retire around 61, and that means they still have 4 years prior to Medicare, and that means managing costs based on the IRMAA table would be one consideration because, "SSA determines if you owe an IRMAA based on the income you reported on your IRS tax return two years prior, meaning two years before the year that you start paying IRMAA." Even if they cannot stay in the lowest bracket, perhaps they can use management tools to avoid jumping to the bottom of a next higher bracket.

https://www.medicareinteractive.org/get-answers/medicare-health-coverage-options/original-medicare-c...

To be honest with you, having so much income that this is a problem, then trying to manage 401(k) relative to this, is like digging out a hole and making a pile you later have to dig. Aren't they already maxing this? Sure, deductible retirement is good, now. Not later, though.

They are young enough that non-deductible contributions with tax-free earnings (Roth) would be better, if they have extra to invest, and while backdoor still is an option, I would imagine they have Roth 401(k) as an option. And, they should use some of their funds to make taxable conversions out of Trad IRA/4014(k) and pay that tax now. Then enjoy the tax free growth.

In other words, instead of trying to distribute this into various plans to reduce some proportionate taxes owed, I would use that bonus of found money to start setting myself up to ride into the sunset in a better position. That might mean paying even more taxes now, of course, and clearly, this gives them the headroom for that cost.

And if they have Roth 401(k), they will want to transfer that to Roth when they qualify, to avoid RMD.

And they should give as much as they can to as many programs and functions as possible, because they can.