Meet a single retiree at 75 with roughly $1.3 million saved. He has about $1.15 million in a traditional IRA and $150,000 in a Roth and taxable brokerage. He also gets $30,000-a-year from Social Security. When the first required minimum distribution notice arrives, the tax preparer explains why 85% of the Social Security payment is now being taxed alongside it.
This surprise has a name: the tax torpedo. The retiree did the right things for decades. Now the same tax-deferred account that built the wealth is forcing income out on a schedule the IRS controls.
Where the $58,000 RMD Number Comes From
Required minimum distributions use the IRS Uniform Lifetime Table. At age 75, the divisor is 24.6. Divide the prior-year-end traditional IRA balance by 24.6 and you get the RMD for the year.
To land on a roughly $58,000 RMD, the traditional IRA balance would need to sit near $1.4 million. That is consistent with a portfolio that ran up during the prior year and now shows a slightly lower current balance after living expenses.
The IRS calculates a “provisional income” figure to decide how much Social Security to tax. For a single filer:
- Take other taxable income (the $58,000 RMD)
- Add tax-exempt interest (assume none here)
- Add half of Social Security benefits: half of $30,000 is $15,000
That produces provisional income of about $73,000. For single filers, the first breakpoint is $25,000 and the second is $34,000. Once provisional income clears $34,000, up to 85% of benefits become taxable. At $73,000, this retiree is well past that ceiling, so $25,500 of the $30,000 benefit lands in taxable income.
Stack that on top of the RMD and subtract the $16,100 single standard deduction for 2026, and taxable income lands near $67,000. The top slice sits inside the 22% bracket that runs from $50,400 to $105,700.
Every Extra Dollar Is Punished Twice
In the phase-in zone between the two breakpoints, each additional dollar of IRA withdrawal can drag up to 85 cents of Social Security into taxable income. This retiree is already past the phase-in and pinned at the 85% ceiling. The real damage would come from a lumpy withdrawal (a car, a roof, a medical bill) that pushes income into a higher bracket or triggers an IRMAA surcharge on Medicare Part B.
IRMAA starts biting once modified adjusted gross income clears $109,000 for a single filer in 2026, adding about $81 a month on top of the roughly $203 standard Part B premium. That threshold is closer than it looks once RMDs, taxable Social Security, and any brokerage income stack up.
Two Levers to Address the Tax Bill
- Qualified Charitable Distributions. A retiree over 70½ can send up to $108,000 in 2026 directly from an IRA to a qualified charity. The transfer counts toward the RMD but never touches adjusted gross income. If this retiree gives $10,000 a year to church, community, or alma mater, routing that gift as a QCD instead of a check from the brokerage shaves $10,000 off the RMD’s taxable footprint.
- Spend from the Roth and brokerage first. The $150,000 in Roth and taxable accounts is the flexibility bucket. Any discretionary spending should come from those accounts rather than an IRA withdrawal on top of the RMD. Every extra IRA dollar gets taxed at 22% and drifts toward IRMAA territory. Roth dollars come out clean.
Pre-RMD Roth conversions in the late 60s and early 70s are the textbook fix for this problem, but that window has closed for a 75-year-old. (Our Roth window playbook walks through the sequencing decisions for anyone still inside it.)
What to Do Now
If you’re in a similar situation, pull the December 31 statement for the traditional IRA and divide by 24.6. That is the RMD. Run the provisional-income arithmetic above with the actual figure from the SSA-1099. If provisional income sits above $34,000, 85% of benefits are taxable.
A common mistake is treating the RMD as extra money, spending it, and then pulling more from the IRA later in the year. That doubles the damage. Take the RMD, route any charitable giving through it, and let the Roth and brokerage carry the rest of the year’s spending if possible.
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