A Couple Who Retires at 62 With $650,000 Between Two IRAs Can Convert $40,000 a Year for 11 Years. The Average Couple With the Same Balance Converts $0 and Meets $42,000 of RMDs at 73
Most couples with $650,000 in traditional IRAs do nothing between retirement and age 73, then face a required withdrawal they never planned for and cannot avoid. The couples who act early follow a very different path.
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A married couple retiring at 62 with $650,000 in traditional IRAs faces a tax decision most retirees make by default: whether to convert money into a Roth IRA while their taxable income is low. The default is to do nothing. That choice has a cost that shows up years later as RMDs. This article compares two couples with the same balance. One converts $40,000 a year from 62 through 72. The other converts nothing.
This couple has more saved than most. Transamerica’s survey puts median household retirement savings for Baby Boomers at $270,000. A balance of $650,000 is large enough that RMDs will be substantial, but too small for the couple to miss what they’ll owe. That middle ground is where conversion planning can make a meaningful difference.
How $650,000 Turns Into a $42,000 Withdrawal
Assume the IRAs grow 5% a year, which is a moderate assumption when the 10-year Treasury yield stood at 5.3% on October 5, 2026. If the couple never uses the money, $650,000 grows to about $1.11 million by age 73. At that age, the IRS Uniform Lifetime Table divisor is 26.5, so the first RMD comes to about $42,000.
That withdrawal is required whether the couple needs the money or not. It is taxed as ordinary income and added to Social Security. The 2027 cost-of-living adjustment is tracking toward 3.6%, according to recent estimates. The divisor shrinks every year, so the required share of the account grows with age.
It’s also important to remember that RMDs start at 73 for people born from 1951 to 1959, and at 75 for those born in 1960 or later, giving them a longer conversion window.
What Converting $40,000 a Year Costs and Buys
For 2026, married couples filing jointly get a standard deduction of $32,200. The 22% bracket begins above $100,800 of taxable income. A couple can have up to $133,000 of gross income without paying more than 12% on any dollar. A couple living on cash savings and holding off on Social Security has most of that room unused.
Converting $40,000 costs at most $4,800 in federal tax per year. Over 11 years, $440,000 moves into Roth accounts for no more than $52,800 in total tax, assuming the couple pays from other accounts.
By age 73, the converting couple’s traditional IRAs hold about $543,000, and the first RMD drops to about $20,500, roughly half what the other couple must take. The Roth accounts hold about $568,000. Original owners never take RMDs from that money, and qualified withdrawals are tax-free.
Where the Zero-Conversion Couple Pays More
For the couple that never converted, any income above the $100,800 line is taxed at 22%. A $42,000 RMD would cost $9,240 in a single year, and withdrawals keep growing. However, the bigger risk comes when one spouse dies. The survivor files as a single taxpayer, and the 22% bracket for singles starts above just $50,400. The IRA and its RMDs stay about the same size, but the survivor has roughly half as much income room before reaching the higher rate.
Clark Howard noted on his podcast that retirees with big IRAs find those IRAs produce RMDs that push them into higher brackets. He added that “typically the right way to do Roth conversions is in chunks spread out over time”, since a single large conversion increases income and the tax bracket.
When Converting Makes Less Sense
These numbers assume the couple can cover living costs without drawing on the IRAs. If they need IRA money to live on in their 60s, those withdrawals use up the same low-bracket room. Converting also raises reported income, which can shrink health insurance subsidies before Medicare and increase Medicare premiums later. If the couple’s taxable income in retirement would stay in the 10% or 12% bracket anyway, converting at 12% saves little.
How to Use the Years Between 62 and RMD Age
The years between retirement and RMD age are when a couple’s tax rate is usually lowest, the same window we sized up in detail in a free Roth guide here.
- Estimate taxable income for each year from retirement to RMD age. Treat the $100,800 joint taxable income line as the ceiling for conversions.
- Do the largest conversions before taking Social Security, while benefits don’t yet use up bracket room.
- Pay the conversion tax from other funds so the full amount keeps growing in the Roth.
If they convert nothing at 62, the couple still pays tax on the same money. They pay it starting at age 73, through larger required withdrawals taxed at 22% or more, especially after one spouse dies.
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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.
