I'm not clear on the income/tax situation: "If she doesn't make enough money from which to deduct IRA contributions."
So let's start with the mechanics. First, as @Gary1952 said, don't take a taxable distribution. If you're going to pay taxes, you're better off rolling it into a Roth. All its future earnings will be tax free, as opposed to taxable in a taxable account.
The law allows rollover conversions directly from a 403(b) into a Roth IRA. This eliminates one step in the conversion process. But my limited experience in helping someone do this within TIAA suggests that the 403(b) administrators may not know what they're doing. (In that case, TIAA withheld state income taxes which they were not supposed to do.)
Instead, a direct rollover to a T-IRA will preserve your options to convert or not. If you should convert the IRA (or a portion) to a Roth, don't have taxes withheld, else the amount withheld will be treated as a taxable withdrawal. In addition, the conversion moneycannot be withdrawn penalty free for five years. Because your wife is (and will continue to be) under 59½ the conversion money will be subject to the usual 10% early withdrawal tax until it becomes a qualified distribution. That happens five years after the conversion.
Here's a short column discussing these two "traps":
https://www.irahelp.com/slottreport/roth-ira-conversion-10-penalty-trap
In some states (I don't remember which state you're in), some retirement distributions (including IRA withdrawals/conversions, pension plans, etc.) can be taken state-tax-free. This feature may be age-restricted. For example, Colorado exempts $20K of retirement income (including IRA withdrawals) for people aged 55-64, and $24K for seniors. So if you're thinking about converting the money, it might make more sense for you to convert part of your T-IRA (if any) rather than part of your wife's. Not to mention that you're closer to RMDs.
Page with table of how each state treats retirement income:
https://taxna.wolterskluwer.com/whole-ball-of-tax-2018/state-retirement-taxes
That gets us to whether it even makes sense to convert (which is effectively what you're doing if you do a direct rollover to a Roth). Not enough information to reasonably comment here, especially since I don't understand what you mean by "doesn't make enough money". Generally 100% of compensation can be contributed to T-IRAs (up to contribution limits, of course).
The 12% bracket that @bee mentioned calls to mind another consideration: 0% capital gains. If you keep your total taxable income under $78,750 (sic), then you cap gains are taxed at 0% by the IRS. Note that this limit is slightly different from the $78, 950 limit for the 12% ordinary income tax bracket (MFJ).
Too many considerations and too little information to comment intelligently about your conversion decision (which would be informational in any case and not constitute advice, as with all of this post).

This thread illustrates the diversity of thought of guests appearing on this program. I look forward to the annual visit from Matthew McLennan and Ed Hymann because it is loaded with worthwhile information about the economy and markets. The prior show entitled "Failing Retirement" made some good points (especially by Teresa Ghilarducci but I certainly didn't agree with Jamie Hopkins's recommendation of "Fixed indexed annuities" for ones fixed income allocation (due to the outrageous fees generally associated with the product). And having David Rosenberg the weeks before served as a good counterbalance to the generally bullish views of McLennan and Hymann.
I like the show but find it a little creepy that the show's sponsors are often associated with guests who appear on the shows. I don't think Lewis Rukeyser's show ever took money from companies represented by panelists or guests, and in my view this gave the program "Wall Street Week" more credibility which will probably be unmatched in my lifetime.

Re: RMD - You can, in a sense, have your cake and eat it too - not that it makes a huge difference in net amount received. I simply move the expected RMD amount into a cash or cash equivalence fund well ahead of the actual time it will be taken. At that point it becomes “hidden” within my investment portfolio until the actual RMD / distribution. Around the end of year, as @Catch22 suggests, still works fine for RMD compliance. It’s at that time I transfer the funds earlier set aside into a non-sheltered cash account. Does allow the money sitting in cash to grow tax deferred until you actually pull it out. An added. enefitnis that it allows a degree of flexibility, should circumstances change.
Interesting discussion. I prefer to use various diversified income and moderate / conservative allocation funds at TRP and D&C (DODLX) and let those guys decide how much and what kind of bonds to hold. But I can see the appeal of using CEF bonds (apparently in a modified laddering approach) late in retirement. From the bit I’ve read, CEFs are thought to hold some good value currently. Boils down to what you know best and each’s individual comfort level. Welcome to the guys who came over from M*. I’ve seen some of your CEF discussions on that board, but have never posted there.

autoshops and Gary, thanks for responding. I have found investors have carved out their own unique mix of conservative bond oef funds, that fit their unique objectives and investing style. I certainly understand how many investors hold balanced funds and equities, probably most do--holding conservative bond oefs for ballast purposes and holding them for income, are very typical. When I was in my early 60s, I held many balanced funds and some equities, but as I got older, I had accumulated enough where my objectives became more conservative, so that I could just have a stress free retirement. I am spending quite a bit of time in my taxable account recently--funds like DBLSX are very solid low risk funds, and the question I need to answer is whether I can take a bit more risk to get more total return, without the stress of dealing with that risk. I have decided that PUTIX is a fund worth holding in my taxable account. I like the nontraditional bond category a lot because you can find funds that significantly vary in how you can use them--sometimes for income, sometimes for total return, sometimes for ballast, etc. One of the other reasons I like nontraditional bond funds, is that they often have a primary goal of "absolute return" and have fewer constraints, and more investing tools in their arsenal, to achieve those performance objectives.

@Derf - I wasn’t trying to hype TMSRX. It came up as part of a larger discussion about investing late in the retirement years. I took the time to address your question about the 16% cash position and tried to share a few thoughts on a fund that’s barely one-year old.
I’d be very surprised if anyone else who posts here owns it. I own a great many funds that are not currently popular. I have to answer only to myself. So, you invest your way and I’ll invest mine.

I took a sneak peak (TMSRX) at Marketwatch & to my surprise 32% in TRPUSBF. Looking at 4/th Qter. 2018 shows app. 7% drop. I guess it boils down to downside protection vs upside gain. Is anyone into this fund for say 10% or more of retirement income funding. I did take note it appeared to give out some donuts , but as of now the dividend is unknown to me. Derf
P.S. donuts $.27 & a wavier in effect for ER.

Kitces:“ Once ... buckets are established, the retiree then might use the following decision-rule framework for liquidations:
1) If equities are up, take the retirement spending from equities
2) If equities are down but bonds are up, take the spending from bonds instead
3) If both equities and bonds are down in the same year, take the distribution from Treasury bills ”
(or, in my case, from “Alternative” investment funds)
Thanks for the link @msf - I’d never seen any analysis comparing the two approaches before and somewhat humbled that Kitces sees some merit in what I’ve been doing. Of course there will be other experts who disagree.
My method IMHO only works if one is willing to sacrifice some current level of return in exchange for being fully invested at all times (a lousy misleading term anyway). So, I carry what some would consider expensive, low performing or erratic performance funds as an offset to a severe equity sell-down. Funds like TMSRX, PRPFX, OPGSX - none of which would pass mustard based on the metrics most mutual fund investors use or receive high marks on this board. There’s also a static 15% weighting in the mix devoted to ultra-short and short term bonds. (I just recently increased that frim 10%.) And as Kitces mentions, you have to be willing to sell your winners in a downturn and hang on to your losers.
One big problem is in trying to backtest anything. For most, 10-15 years seems like an eternity. But in terms of really important global financial turning points 10-15 years is little more than a drop in the bucket. And some of the alternative investment funds (like TMSRX) have only become available recently.

I can only wish that my retirement account had that persons' 1966 dollar amount in 2019 dollars. (inflation adjusted!!!]
Derf

Hi @hank
OK, finished some early chores and coffee gone.
The numbers from the posted link seem large, but in the overall; may not mean much when related just to the IRA and 401K holdings (i didn't check 403b, but this amount is likely very large, too)
So, here's some info from ICI.org as of mid-year, 2019:
--- IRA total assets = $9.7 TRILLION
--- 401k total assets = $5.9 TRILLION
Secondary info reports total individual retirement market assets = $29.8 TRILLION, although I don't have time to chase this data breakdown.
Obviously, the numbers in the link are interesting; but not of significant value to cause me to change my ways as of today.
At least, some form of a value measuring benchmark info was available.
ADD: some of the flow to MM accounts likely can be attributed to required minimum distributions from traditional IRA accounts before Dec. 31
Take care,
Catch

@Gary
This may not apply to you; but perhaps for whomever..................
If a spouse is not working, the other spouse may provide funding to a spousal Roth, etc.
The link below also provides contribution limits, and other info.
See this IRS page.

Just looking at the mechanics, and not the particular funds ...
It looks like with a little flexibility, you could get down to two institutions - Fidelity and Vanguard - pretty easily. TRP is now NTF at Fidelity (and at Vanguard, though I'd favor Fidelity for brokerage/third party funds). The only reason I might have for continuing to invest directly with TRP is free M* premium access.
For the HSA, if you're willing to invest in anything other than BRUFX, Fidelity now offers HSA accounts that are as free as its regular/IRA brokerage accounts. As a side note, you don't have to withdraw money from an HSA as expenses are incurred. You can pay out of pocket and reimburse yourself anytime in the future out of the HSA so long as you hold onto your bills and receipts. So, like other "Roths", you can keep the HSA invested in more volatile funds and draw on the HSA only when it is doing well.
Personally, I tend to avoid sector funds. In part because I don't claim any macro expertise. In part because, as you wrote, I pay my fund managers to make those kinds of decisions. To each his own. I agree with targeting 3 years or so of "survival funds". Even if the other funds don't fully recover in three years, they should come back enough that drawing on them after that time shouldn't be too painful.
A curiosity question, no need to respond w/personal data: my understanding of WEP is that "By law, it cannot eliminate your benefit entirely." (AARP page) So I'm wondering how you're getting hit so hard by it.

This is what I see. Fidelity may have given you incorrect information. It does mention income limits. Could that be it?
The Roth IRA contribution limit is $6,000 for 2019, up from $5,500 in 2018. Retirement savers 50 and older can contribute an extra $1,000. Income limits apply. Retirement savers have yet another reason to celebrate the Roth IRA: The maximum amount that can be contributed to a Roth in 2019 has been increased by $500. Jun 11, 2019

The IRS says yes.
https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits

As part of my end of the year portfolio review I try to simplify my holdings without compromising performance. I am 60 years old and have a pension, but no Social Security (SS's WEP provision eliminated SS for me). I see the next 20 years as a time to spend a little bit of what I have saved knowing full well that, if I am lucky enough to live into my eighties, spending priorities will begin to shift away from "foot loose and fancy free" to "foot wear that's loose and free".
Simplification comes in two forms. One, I am attempting to simplify what I hold (the number of funds) and two, where I hold these funds (the number of institutions where I hold the funds). I manage all of my investments independent of advisors. I do attempt to seek out mutual funds that are managed. So, in a sense, I do pay for investment management advice as a function of the Expense Ratio (ER) of the funds i own that have fund managers or management teams.
Over the next 20 years my withdrawal from these investments need to fund:
- Yearly Income gaps - the yearly shortfall when I subtract my projected yearly expenses from my retirement income.
- One time Expenses - For gift costs (weddings, tuition, holidays), travel costs, medical procedures costs (not covered by insurances), large one time item costs (a car, boat, real estate)
- Roth Conversions up to the 12% tax bracket limit (25% of my retirement accounts are in deferred taxable IRA, 75% in Roth/HSA).
- Help fund retirement needs beyond 80 such as income gaps as a result of inflation, out of pocket health care costs, funeral expenses, providing for surviving spouse, and gifting to beneficiaries (Spouse, Kids, Charities)...oh yeah, and loose fitting shoes.
Here are my present holding by percentages of total:
71% Moderate to Aggressive positions (for long term growth and periodic withdrawals)
PRWCX - 22% (half Roth, half SD IRA)
PRGSX - 10.5% (Roth)
PRMTX - 7.5% (Roth)
PRHSX - 4% (SD IRA)
VMVFX - 6% (Roth)
VHCOX / POAGX-11% (Roth)
VHT - 2% (Roth)
FSMEX - 4% (Roth)
FSRPX - 4% (Roth)
6% Balance position (to cover Long term HC costs)
BRUFX - (HSA)
23% Conservative positions (to cover sequence of return withdrawals, to provide cash for buying opportunities, lower portfolio volatility)
FRIFX, VWINX, PTIAX, VFISX, PRWBX, SPRXX - (mostly Roth)
I am presently at 5 institutions which I will reduce to 4 by Spring 2020 and 3 by summer 2020
Recently, I back tested a portfolio consisting of PRWCX (34%), PRMTX (33%) and PRHSX (33%) which I consider moderately aggressive.
Its past 20 year performance had a MAXXDD recovery period of 3 years. I consider this a reasonable time frame to cover a sequence of return risk withdrawal.
Having at least 3 years of retirement income money earmarked for these future time frames (market pull backs and recoveries) seems reasonable to me. A combination of FRIFX / VWINX / PTIAX / ST Bonds are my choices for this part of my portfolio.
Any thoughts or suggestions would be appreciated.

Hi guys,
Since, I am retired and in the distribution phase of investing I like my portfolio to generate ample income to meet my needs. In this way, I do not have to sell assets to meet cash distribution needs.
In addition, I also look at it in this light. I look at each share owned in a mutual fund much in the same way a farmer looks at an acre of land. While the share/acre is in production it generates some form of income or growth in most cases. Start selling shares/acres to raise cash then pretty soon nothing is left to generate the needed production.
By the way ... even in retirement ... I'm growing my number of shares/acres owned thus increasing my production. And, income generation is a part of this production along with growth of capital.
I agree with hank's comment ... "To each his own."
Is it not great that there is no one way to success (or failure) in investing?
Old_Skeet

An alternative view:

An important aspect of this conversation is that, while REITs provide a higher level of income than most other stocks, income from investments is not, in itself, a useful goal. Rather, it’s total return that matters, because capital appreciation can be used to fund living expenses just as well as income can. For instance, in a given year, if a given mutual fund provides an 8% total return, it does not matter whether the return is 8% from income and 0% from capital appreciation, 8% capital appreciation and no income, or any other combination in between.
An important exception is that if we’re talking about a taxable account (as opposed to retirement accounts such as IRAs or 401(k) accounts), income is actually detrimental relative to capital appreciation, because it results in an immediate tax cost rather than a deferred tax cost. And as a result, it can even make sense to underweight REITs in taxable accounts.

Link to Article:
overweighting-reits-why-dont-more-experts-recommend-it

https://seekingalpha.com/article/4310950-retirement-why-reits-are-good-bond-replacements
Retirement: Why REITs Are Good Bond Replacements
Summary
Historically low – and even negative – interest rates are making it harder than ever to retire.
REITs are a viable alternative to retirees and other income investors who desire greater income without having to take significantly more risk.
Our method enables us to earn high and stable income from real asset backed investments.

sounds alarming
https://www.latimes.com/business/story/2019-12-10/retirement-crisis-six-charts

An Ad for T. Rowe Price. Basically filling the page. Title may be misleading. While the funds may be appropriate for long term investing, they are not designed for those in retirement as title seems to suggest. (Examples: TRBCX, PRHSX).
The recommendation for their 2030 fund seems especially out of place, since it’s geared for someone 10 years from retirement. Doesn’t seem to fit with their long-term focus; but it isn’t designed for someone already in retirement either. They recommend PRWCX without noting it’s closed to new investors. One of their stated criteria is cost. Yet there are much lower cost providers than T. Rowe if that’s what you’re seeking.
A sham job by U.S. News .
@JohnN - Why did you think it imperative to bump this over to the Discussions+ section of the board? Are you normally accustomed to “discussing” matters with yourself? Kindly refrain from doing so here.

*Like*

An Ad for T. Rowe Price. Basically filling the page. Title may be misleading. While the funds may be appropriate for long term investing, they are not designed for those in retirement as title seems to suggest. (Examples: TRBCX, PRHSX).
The recommendation for their 2030 fund seems especially out of place, since it’s geared for someone 10 years from retirement. Doesn’t seem to fit with their long-term focus; but it isn’t designed for someone already in retirement either. They recommend PRWCX without noting it’s closed to new investors. One of their stated criteria is cost. Yet there are much lower cost providers than T. Rowe if that’s what you’re seeking.
A sham job by U.S. News .
@JohnN - Why did you think it imperative to bump this over to the Discussions+ section of the board? Are you normally accustomed to “discussing” matters with yourself? Kindly refrain from doing so here.