A 62-year-old just retired with $1.6 million in a traditional 401(k), no pension, and plans to delay Social Security until 70. The Reddit user who asked “Roth conversions at age 62?” on r/RothIRA spotted what this reader needs to see: the largest tax bill of his life is hiding eleven years out, and the window to defuse it is already open.
That window sits between retirement today and the first required minimum distribution at age 73. Used deliberately, it can shave roughly $145,000 off lifetime federal taxes on the account. Ignored, the same $1.6 million compounds into a tax problem that quietly eats into retirement income year after year.
Why the Bill Balloons at 73
Left untouched at a 6% compound return, $1.6 million grows to roughly $3 million by age 73. Divided by the IRS Uniform Lifetime Table factor of 26.5, that produces a first-year RMD near $115,000, and the number rises every year after. Stack a delayed Social Security benefit around $50,000 and portfolio dividends on top, and a joint filer lands squarely inside the 24% federal bracket, which begins at $211,400 of taxable income for married couples in 2026.
Up to 85% of Social Security becomes taxable once combined income clears the relevant threshold. Cross the second IRMAA tier and Medicare Part B and D surcharges add several thousand dollars per couple annually, with a two-year lookback that ties today’s income decisions to premiums two years out. The effective marginal rate on the last dollar of a large RMD often lands near 40%.
The Gap-Year Conversion Math
The person retiring at 62 with no wages has something a 73-year-old buried under RMDs will never get back: a nearly empty tax return. The 2026 standard deduction for joint filers is $32,200. The 12% bracket runs from $24,800 up to $100,800, and the 22% bracket extends from $100,800 to $211,400, with the 24% bracket reaching up to $403,550. A couple can convert up to roughly $243,600 of traditional 401(k) money each year and still keep the marginal rate capped at 24%.
Convert $180,000 per year from age 62 through age 69, and roughly $1.44 million moves into a Roth over eight years. The blended federal cost sits near 19%, because early conversions fill the 12% and 22% bands before topping into 24%. Total federal tax paid across the full conversion campaign: roughly $274,000.
Leave the same $1.44 million inside the traditional account and it comes out later as RMDs, layered on top of Social Security, at a blended effective rate closer to 29% once IRMAA and Social Security taxation are counted. Total federal tax on that path: roughly $418,000. The delta is about $145,000, and it widens further if state income tax applies.
The macro backdrop reinforces the case. The Fed funds rate sits at 3.50% to 3.75%, the 10-year Treasury yields 4.69%, and inflation expectations remain stubbornly elevated. Persistent real rates and sticky inflation both argue that today’s bracket structure is unlikely to grow more generous over the next decade.
Play with your own numbers before touching the account. The comparison above assumes tax rates that are defensible today, not guaranteed tomorrow.
The IRMAA Trap Most People Miss
Medicare uses a two-year lookback on modified adjusted gross income. A conversion executed in the year you turn 63 shows up on the Part B premium bill at 65. For 2026, the first IRMAA surcharge for joint filers kicks in when MAGI exceeds $218,000. A large conversion in the low-income years before Medicare eligibility can push a couple across multiple IRMAA tiers once combined with other income, adding roughly $2,400 to $5,000 in surcharges per person in the first affected year. The standard 2026 Part B premium is $202.90 per month, and surcharges layer on top of that for each enrolled spouse. Size conversions so the last dollar stays below the next IRMAA threshold, not just below the top of the 24% bracket.
What to Do This Quarter
- Project the age-73 RMD. Divide the estimated balance at 73 (today’s balance grown at your assumed return) by 26.5. If the number exceeds your target retirement spending, you have a forced-income problem worth solving now with conversions.
- Cap the annual conversion at the top of the 24% bracket. For 2026 joint filers, keep taxable income at or below $211,400. Convert early in January so you can true up in December once dividends and capital gains are known.
- Pay the conversion tax from a taxable account, never from the converted dollars themselves. Paying withholding out of the conversion wastes the tax-free growth runway that makes the strategy work.
- Front-load conversions before Social Security starts at 70. Once benefits begin, every dollar converted also pulls 50 to 85 cents of Social Security into taxable income, raising the effective conversion cost.
That $145,000 is a bill this reader will either pay to the IRS starting at 73 or keep inside the Roth for his heirs. The choice stays open for roughly eight more years.
Editor’s note: This update corrects the 2026 bracket description (the 12% bracket for married joint filers runs from $24,800 to $100,800, and the 22% bracket from $100,800 to $211,400), updates the 10-year Treasury yield to 4.69% and the Fed funds rate to the current 3.50% to 3.75% range, and adds the 2026 IRMAA first-tier threshold of $218,000 for joint filers along with the standard 2026 Part B premium of $202.90 per month.
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