A 62-Year-Old Couple’s $700,000 Roth Conversion Plan Wipes Out a $160,000 Tax Bill Before RMDs Hit

A Bogleheads thread this summer walked through a setup that many pre-retirees will recognize: married, both 62, one spouse just retired, roughly $2.1 million sitting in traditional 401(k)s, and Social Security deferred until 70. The question was whether to begin a Roth conversion ladder now or wait. The math favors acting now. The window between retirement and age 73 is the only stretch where this couple controls their own tax bracket, and it is closing one year at a time.

Once required minimum distributions begin, that control disappears. The IRS dictates how much comes out of the account, Social Security income stacks on top, and Medicare premiums adjust based on income from two years earlier. A $700,000 conversion spread across seven years, taxed at roughly $160,000 total, is the cheapest federal tax bill this couple will ever see on that money.

Why the 62-to-72 Window Is the Cheapest Tax Bracket They Will Ever See

With no wages and Social Security deferred, taxable income starts close to zero. That quiet stretch between the final paycheck and the first RMD is the whole premise behind the free Roth Window guide. The 2026 standard deduction for married filing jointly is $32,200, which means the first $32,200 of any conversion is federally tax-free.

The 2026 married-filing-jointly brackets run 10% up to $24,800, 12% up to $100,800, 22% up to $211,400, and 24% up to $403,550. A $100,000 conversion in a year with no other income keeps taxable income comfortably inside the 12% bracket. Pushing the conversion higher starts filling the 22% bracket instead.

The couple’s plan converts $100,000 per year from age 62 through age 68, while both spouses remain pre-Medicare, then trims conversion amounts in later years. Seven annual conversions sum to the $700,000 headline. Blended federal tax, layered partly at 12% and partly at 22% once modest other income appears, works out to roughly $160,000 across the full ladder.

Defusing the RMD Tax Bomb

Left untouched, $2.1 million grows. At a 6% annual return, the balance at age 73 exceeds $3.7 million. The first-year RMD lands near $140,000. Add two Social Security checks that began at 70, and taxable income easily clears $220,000, pulling 85% of Social Security benefits into taxable territory and pushing the marginal rate into the 24% bracket.

Then Medicare adds another layer. In 2026, joint filers with modified AGI above $218,000 pay an $81.20 Part B surcharge per person per month and a $14.50 Part D surcharge, on top of the $202.90 base Part B premium. Cross $274,000 and the Part B surcharge jumps to $202.90 per person and Part D to $37.50. For a couple, crossing that first IRMAA tier adds roughly $2,297 a year in combined premiums, with the two-year lookback meaning income at 71 sets premiums at 73.

The conversion ladder shrinks the traditional balance before any RMDs are calculated. A $1.4 million balance at 73 produces an RMD closer to $53,000 rather than $140,000. Combined income drops back below the first IRMAA threshold, Social Security taxation stays capped, and the marginal bracket resets to 12% for most of retirement.

When the Trade Does Not Pay Off

Paying tax now to avoid tax later only works if the future rate is at least as high. The ladder underperforms if the couple’s retirement bracket ends up lower than expected (unlikely with $2.1 million and deferred Social Security), if one spouse dies early and the survivor files single at compressed rates that make conversions more valuable, or if Congress cuts rates. The One Big Beautiful Bill, signed in July 2025, made the current TCJA brackets permanent, so the 2017-era rate cliff that once threatened retirees is off the table.

Watch the Medicare line carefully. Age 63 is the first year that matters, because 2026 joint IRMAA kicks in above $218,000 MAGI and premiums reflect income from two years prior. Keeping each conversion year’s MAGI under that figure preserves the base $202.90 Part B premium.

Three Moves to Run This Week

1. Model the RMD you are avoiding. Project your traditional balance to age 73 at 6% growth, divide by 26.5 (the Uniform Lifetime factor at 73), and compare that number to the top of your current 22% bracket. If projected RMD plus Social Security exceeds $211,400, a ladder is worth modeling.
2. Size each conversion to fill a target bracket. Fill the 12% bracket first. Extend into the 22% bracket only if the projected RMD would land in the 24% bracket or higher. Recheck the $218,000 IRMAA line before finalizing each conversion in December.
3. Pay the conversion tax from a taxable account. Using IRA dollars to cover withholding shrinks the Roth balance and undermines the compounding advantage. With the 10-year Treasury now at approximately 5%, short-term Treasuries or a money market fund are reasonable places to park the tax reserve while the ladder runs.

Editor’s note: This update confirms the 2026 IRMAA Tier 1 annual cost for a couple at $2,297, sourced from CMS published figures, and reflects that the 10-year Treasury yield has risen to approximately 5% as of September 2026.

Contact [email protected] for any questions or corrections.