A 65-year-old who just retired with $1.4 million in a traditional 401(k) and no plans to touch it until age 73 has a problem most pre-retirees miss. The eight years between retiring and the first required minimum distribution are the cheapest tax years of the rest of their life. Once RMDs start, the IRS, Medicare, and Social Security all begin pulling at the same dollar.
The fix is unglamorous: a partial Roth conversion strategy executed in the 60s, sized to fill up the lower tax brackets without spilling into IRMAA territory. Done right, it can shave six figures off the lifetime tax bill for portfolios in the $1 million to $2.5 million range.
The RMD Math That Triggers Everything
The first required distribution at age 73 uses a divisor of roughly 26.5 from the IRS Uniform Lifetime Table. On a $1.4 million traditional 401(k), that is about $52,800 in forced ordinary income in year one, before a single Social Security or pension dollar hits the return.
Layer on Social Security. The provisional income formula makes up to 85% of benefits taxable once combined income clears roughly $44,000 for a married couple. A $52,800 RMD plus $50,000 in joint Social Security clears that line easily, and the newly taxable benefits stack on top of the RMD to push the household deeper into the 22% or 24% bracket.
Then comes IRMAA. Medicare Part B and Part D surcharges run on a two-year lookback, and a couple whose modified adjusted gross income clears the first tier (around $212,000 for joint filers in recent guidance) pays an added premium per spouse, per month. Cross a higher tier and the surcharge can run $300 to $400+ per person monthly. A reader who casually executes a $200,000 Roth conversion at 71 may not realize they just bought an IRMAA bill that lands at 73.
Why Your 60s Are the Window
The 2026 brackets give a retired couple breathing room a 73-year-old never sees again. The 22% bracket runs to $211,400 for married couples filing jointly, and the standard deduction is $32,200. A couple with no earned income and Social Security delayed to 70 can convert roughly $130,000 a year from traditional to Roth and stay entirely inside the 22% bracket.
Over six years, that is around $780,000 lifted out of the future RMD base. By age 73, the remaining traditional balance produces a much smaller forced distribution, the Roth balance grows tax-free with no RMD during the owner’s lifetime, and the IRMAA dial stays down.
The macro backdrop favors acting now. The 10-year Treasury sits near 4.6% and the Fed funds upper bound is near 3.8%, both signaling that the current bracket structure under the One Big Beautiful Bill is the law for the foreseeable future. Paying 22% today on a known conversion amount beats paying an effective 32% to 40% later on stacked RMDs, taxable Social Security, and IRMAA premiums.
Workers still earning above $150,000 in W-2 wages have a built-in conversion already running. Under SECURE 2.0, every catch-up dollar ($8,000 for ages 50 to 59 or $11,250 for ages 60 to 63) now must go to the Roth side of the 401(k). High earners should max it.
Three Moves to Make This Year
- Run a Roth conversion ladder with your CPA in November, when you know your year-end numbers. Target the top of the 22% bracket ($211,400 in taxable income for joint filers), and convert in December once the math is locked.
- Mind the IRMAA two-year lookback. A conversion completed in 2026 hits Medicare premiums in 2028. If either spouse turns 65 in 2027 or 2028, throttle conversions accordingly or accept the surcharge as a known cost.
- If you are still working and earned over $150,000 in 2025, confirm your 401(k) offers a Roth bucket and route every catch-up dollar there. No Roth option in the plan means no catch-up contributions allowed.
Run this playbook in your 60s and you arrive at 73 with a smaller RMD, a lower Medicare bill, and most of your Social Security check intact. Wait, and the cascade is already in motion when the first 1099-R hits the mailbox.
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