A $1.3 Million 401(k) Left Alone at 62 Becomes a $2.4 Million RMD Problem at 73, Unless the Owner Makes One Move First
Leaving a seven-figure 401(k) untouched between retirement and age 73 sets up a tax collision most retirees never see coming until the IRS hands them a forced withdrawal they never asked for.
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A 62-year-old retires with $1.3 million in a traditional 401(k), plans to live on savings, and wants to delay Social Security until 70.
If the account is left alone and grows about 5.7% a year, it reaches roughly $2.4 million by 73. Then the IRS sets how much comes out each year. A bigger balance means a bigger forced withdrawal and a bigger tax bill alongside Social Security.
Dave from Detroit raised this exact question on a March 2026 episode of the Clark Howard podcast. He asked why the standard advice is to convert to a Roth before RMDs rather than “just spend down the traditional IRA and not draw on Social Security until 70.” Both strategies do the same job. Each one reduces the pre-tax balance during the cheapest tax years you are likely to see.
How the IRS Sets Your Withdrawal at 73
A required minimum distribution (RMD) is the amount the IRS makes you take out of pre-tax accounts every year once you reach 73. To get it, divide the prior year-end balance by a factor from the Uniform Lifetime Table. At 73 that divisor is 26.5.
On $2.4 million, the first RMD comes to about $90,600, and you don’t get a vote on that number.
The divisor also gets smaller every year, falling to 25.5 at 74 and 24.6 at 75, so the required share keeps rising whether you need the cash or not.
When the RMD Lands on Top of Social Security
Take a married couple collecting an sample $50,000 a year in combined Social Security. Once provisional income passes $44,000 for joint filers, up to 85% of benefits face taxation. The RMD tops that line easily, driving the maximum share of benefits into taxable income.
Subtract the 2026 joint standard deduction of $32,200 and taxable income comes to about $100,900. That is just past the $100,800 point where the 22% bracket starts. The RMD grows every year after that, so more income lands in the higher bracket.
When one spouse dies, the survivor switches to single filing but keeps the same RMD. With a $30,000 survivor benefit, income reaches about $116,000, above the $109,000 threshold for Medicare surcharges.
At that tier, Part B rises from $203 to $284 a month, and Part D adds $14.50. Medicare bases these charges on your tax return from two years earlier, so the surcharge comes well after the income that caused it.
One Move: Draw the Account Down Between 62 and 70
What works is taking money out of the traditional 401(k) on purpose during the gap years, after the paychecks stop and before Social Security and RMDs begin. Spend part of it and convert the rest to a Roth. Roth accounts carry no lifetime RMDs.
Aim to fill the 12% bracket. For joint filers in 2026, it covers taxable income up to $100,800.
With the standard deduction, a couple can report about $133,000 of income for roughly $11,600 in federal tax, an effective rate near 9%.
If the couple withdraws $133,000 annually through the gap years and the account grows at the same rate, the balance at 73 reaches about $859,000 instead of $2.4 million.
The first RMD falls to about $32,400, with only $17,400 of the $50,000 in benefits taxable, keeping the surviving spouse below Medicare surcharge thresholds.
Watch one safeguard. After 65, conversion income counts toward Medicare surcharges, but $133,000 is far under the $218,000 joint threshold.
Three Steps to Take Before Your Next Birthday
- Figure out your 2026 conversion room. Estimate this year’s taxable income. The gap between that and $100,800 for joint filers or $50,400 for single filers is the amount you can convert at 12%. Conversions must close by December 31.
- Run the RMD trigger test. Project your balance at 73 and divide by 26.5. If that RMD plus half your expected Social Security tops $44,000 for a couple, up to 85% of benefits will be taxable annually. That combination signals you should start converting now.
- Protect the Medicare lookback. From 63 on, keep each year’s income under $218,000 for joint filers or $109,000 for single filers, since your return at 63 sets premiums at 65.
Our view is that a 62-year-old with seven figures in a traditional 401(k) should treat every year without a conversion before Social Security starts as a year of cheap tax rates lost for good (we sized up that low-bracket stretch between the final pay period and the first RMD in a free Roth window guide). Start converting at 62.
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Jake has been been working in financial media for almost 15 years. He focuses on all things personal finance for 24/7 Wall St. with high hopes to educate and entertain. Most recently, Jake spent 12 years working various roles at The Motley Fool. He started copy editing fool.com content, worked on premium and marketing campaigns, and helped launch The Ascent, a personal finance brand.
His work has been featured on platforms like MSN, Yahoo Finance, USA Today, and more. He's written about credit cards, social security, ETFs, savings accounts, and just about anything else you can imagine when thinking about money. Jake love to cook, play golf, and tell people he's never had a cavity. (It's true!)
