A Woman Who Retires at 62 With $470,000 in a 401(k) and Lives on the Sale of Her House for 11 Years Will Have About $800,000 at 73, and a $30,000 RMD, Her First Taxable Income in a Decade

Consider a retirement plan in which a woman stops working at 62 with $470,000 in her 401(k). She sells her house, lives on the proceeds, and leaves the retirement account alone for 11 years. If the account averages about 5% a year, it reaches roughly $800,000 by age 73. At that point, the IRS requires her to start taking withdrawals.

Her first required minimum distribution (RMD) is about $30,189, and it is the first meaningful taxable income she has reported in a decade. This article runs the numbers on what that delay buys her, what it costs, and how she could use the quiet years along the way.

How $470,000 Grows to $800,000 With No New Contributions

A return of roughly 5% a year is a moderate assumption for a balanced portfolio of stocks and bonds. All of the growth comes from leaving the money invested and untouched. Because the house sale covers living expenses, she never has to sell shares to pay rent, buy groceries, or replace a roof. In a down market, that matters: she can wait out the decline rather than locking in a loss at the worst possible time.

House Sale Size Determines Whether the Plan Works

In reality, the whole strategy rises or falls on how large the sale proceeds are. The Bureau of Labor Statistics reports that average household spending reached $81,905 in 2025, its latest Consumer Expenditure Survey figure. At that pace, 11 years costs well over $900,000 before accounting for inflation. A single retiree typically spends far less than the average household, which includes working families with children, but the figure illustrates the scale of equity needed.

Home prices make that more achievable than it once was. The Case-Shiller national index stood at 337.3 in July 2026, with January 2000 set at 100 as the baseline, and the July reading was the highest in the past year. That said, national index levels don’t translate directly to any one home’s sale price.

There is also a catch buried in the “no taxable income” framing. Money parked in CDs earns interest, and interest is taxable. The national average 12-month CD paid 1.73% in September 2026. At that rate, interest on a modest CD balance would stay comfortably below the $16,100 standard deduction for single filers in 2026. She has some income, but she owes no federal tax.

What a $30,000 RMD Actually Costs

The IRS Uniform Lifetime Table divisor at age 73 is 26.5. Dividing $800,000 by that figure produces the first RMD. She then claims the standard deduction plus the $2,050 extra deduction for single filers age 65 and older in 2026, which leaves about $12,039 of taxable income.

Under 2026 federal tax brackets, the first $12,400 of taxable income falls in the 10% band. Her taxable income sits just below that threshold, so the federal bill works out to roughly $1,204. It’s a small number today, but it grows. The Uniform Lifetime divisor shrinks every year, so each RMD takes a larger share of whatever balance remains.

Social Security is the larger complication. If she claims benefits at 70, the RMD piles on top of them. At higher combined income levels, up to 85% of Social Security benefits can become taxable (how a large pre-tax balance turns into a first-year tax bill, and how to reduce it years in advance, is covered in a free guide here).

One more wrinkle: the extra $6,000 senior deduction introduced by the One Big Beautiful Bill Act runs only from 2025 through 2028 and phases out above $75,000 in modified adjusted gross income for single filers. By the time she reaches 73, that bonus will have expired, so her deduction picture at that point will be smaller than it looks today.

Age 73 Applies to Fewer New Retirees Than It Seems

SECURE 2.0 requires RMDs to begin at 73 for people born between 1951 and 1958. For anyone born in 1960 or later, the starting age is 75, and a woman turning 62 today falls squarely in that group. Two more years of compounding at the same rate would bring the balance to about $881,160. At age 75, the Uniform Lifetime divisor is 24.6, so her first RMD would be roughly $35,820, a noticeably larger check to the IRS.

Using the Years With No Income

The years when she has little or no taxable income are the cheapest she will ever have to move money out of the 401(k). Under 2026 tax brackets, single filers pay 12% on taxable income between $12,401 and $50,400. Add the $16,100 standard deduction, and roughly $66,500 a year in withdrawals or Roth conversions would be taxed at no more than 12%. Roth 401(k) balances have had no required withdrawals since 2024, which makes conversions during low-income years even more valuable.

Three actions are worth considering during those quiet years:

1. Convert part of the balance each year. Filling the 10% or 12% bracket shrinks the balance that future RMDs are calculated on.
2. Plan Social Security and RMDs together. The age at which benefits are claimed determines how much of the payment gets taxed once withdrawals begin.
3. Confirm the birth year. It determines whether the first RMD arrives at 73 or 75, and how large that initial bill will be.

The strategy is coherent on paper. Leaving the 401(k) alone for 11 years turns a mid-sized balance into a large one. The cost materializes later, when a decade of low tax brackets that could have been used for Roth conversions are gone and the RMD arrives on top of Social Security.

Editor’s note: This update reflects the BLS 2025 Consumer Expenditure Survey figure of $81,905 in average annual household spending (revised from the 2024 figure of $78,535), updates the federal income tax bracket thresholds to the 2026 schedule (10% band now covers taxable income up to $12,400 and 12% extends to $50,400), corrects the SECURE 2.0 birth-year range for the age-73 RMD start to 1951 through 1958 (from the previously stated 1951 through 1959), and adds context on the One Big Beautiful Bill Act’s $6,000 senior deduction phase-out at $75,000 of modified adjusted gross income for single filers.

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