He Converted $240,000 in the Nine Years Between His Last Paycheck and His First RMD. His Brother Converted $0.
Most retirees treat the years between their last paycheck and their first required distribution as a waiting game. Two brothers with nearly identical IRA balances played it very differently, and the gap that opened between them traces back to a…
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Retire at 64, start required minimum distributions at 73, and the nine years in between are the quietest tax years most Americans will ever have. No paycheck. No RMD. Often no Social Security yet. Just a taxable income that can be shaped almost to the dollar by how much a retiree chooses to pull from a traditional IRA and convert to a Roth. Two brothers with similar balances hit that window at the same time. One converted $240,000 over the nine years. The other converted nothing. The difference between them comes down to one decision, made every December, for nine Decembers in a row.
Why the Gap Between 64 and 73 Is the Cheapest Tax Window of a Lifetime
The math starts with where the federal brackets actually sit. Back in 2025, a married couple filing jointly paid 12% on taxable income up to $96,950, and a single filer paid that same 12% rate through $48,475. Now layer in the 2026 standard deduction, which comes in at $32,200 for joint filers and $16,100 for singles. A retired couple with only modest interest income can push well into six figures of Roth conversions through the 10% and 12% brackets before hitting any higher rate. But wait until 73, when RMDs and Social Security start piling on top of each other, and that same dollar often ends up getting taxed at 22% or 24%.
Brother A treated the window as a nine-year budget. Spreading $240,000 evenly is roughly $26,667 in conversion per year, which, for a joint filer with limited other income, sits comfortably inside the 12% bracket. He paid the tax from a taxable brokerage account, kept the full converted amount inside the Roth, and let it grow. Brother B waited. His traditional IRA kept compounding untouched, and the eventual RMD will come out at whatever bracket he lands in with Social Security already turned on.
What the Average 60-Something Actually Has to Work With
Fidelity’s Q3 2025 analysis pegs the average 401(k) balance at $246,500 for ages 60 to 64 and $251,400 for ages 65 to 69. Baby Boomers, as a group, average $267,900 in a 401(k) and $257,002 in an IRA. Those balances are large enough that leaving them alone until 73 tends to produce an uncomfortable first RMD, which is exactly the problem Brother A was solving. Every dollar he moves to the Roth is a dollar that will never trigger an RMD and never lift his Medicare premium tier.
The savings picture also explains why so few people do what Brother A did. The national personal savings rate fell to 2.8% in 2026Q2 from 6.2% in 2024Q1. Conversions require cash on hand to cover the tax bill, and households running that thin on savings often decide the check is easier to defer than to write.
How Rates and COLAs Shape the Decision Right Now
The interest-rate backdrop matters because a conversion is essentially prepaying tax on future growth. The 10-year Treasury yield sat at 4.71% on August 18, 2026, in the 98th percentile of the past year. I Bonds issued through October 2026 carry a combined rate of 4.26%, with a 0.9% fixed component. Cash set aside for conversion taxes actually earns something meaningful for the first time in years. Meanwhile, the 2027 Social Security COLA is tracking at 3.1%, which quietly widens future taxable income for anyone already collecting.
Certified financial planner Wes Moss laid out the trap clearly on his podcast. He pointed out that retirees can easily find themselves in the 15% bracket today, only to land in the 20% bracket later on. The reason is straightforward. Once you add up a pension, Social Security, and required minimum distributions, those income layers stack right on top of each other. His advice is to spread conversions out in chunks over time, rather than doing one large lump sum, so you do not push yourself into a higher bracket with the conversion itself.
What Brother B’s $0 Actually Costs
The comparison boils down to nine years of 12%-bracket conversions versus one very large first RMD taxed at whatever bracket the balance produces at 73, on top of Social Security. Brother A locked in a known rate. Brother B accepted an unknown one. The data does not promise that Brother A came out ahead in every scenario, since future tax law and market returns are not fixed. What it does show is that the window between the last paycheck and the first RMD is the one stretch of retirement where the taxpayer chooses the bracket (we sized up that window and how to use it in a free Roth conversion guide). Nine Decembers is all it lasts.
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David Beren has been a Flywheel Publishing contributor since 2022. Writing for 24/7 Wall St. since 2023, David loves to write about topics of all shapes and sizes. As a technology expert, David focuses heavily on consumer electronics brands, automobiles, and general technology. He has previously written for LifeWire, formerly About.com. As a part-time freelance writer, David’s “day job” has been working on and leading social media for multiple Fortune 100 brands. David loves the flexibility of this field and its ability to reach customers exactly where they like to spend their time. Additionally, David previously published his own blog, TmoNews.com, which reached 3 million readers in its first year. In addition to freelance and social media work, David loves to spend time with his family and children and relive the glory days of video game consoles by playing any retro game console he can get his hands on.
