Retire at 62 With $380,000 in an IRA and No Paycheck for 11 Years, and Converting $30,000 a Year Costs About $1,400 in Tax. Convert Nothing and the IRS Sets the Rate at 73

A retiree who leaves work at 62 with $380,000 in a traditional IRA can contribute $30,000 per year to a Roth IRA and pay about $1,400 in federal tax. A Roth conversion lets you pay income tax on pre-tax money now so later withdrawals are tax-free.

Using the 2026 IRS tables, the exact bill is $1,420. For a retiree with no other income, the tax bill on a conversion is usually small. We’ve often covered pensioners whose tax brackets are already full. In this case, the brackets are empty, and the standard conversion advice works just as it’s written.

Why the Tax Bill Stays Small

A conversion counts as ordinary income and gets stacked on top of everything else on the return. With nothing else there, the first piece is offset by the fixed amount taxpayers take off before tax. That’s the flat amount a single-filer taxpayer deducts before any tax applies, and for a single taxpayer in 2026, the IRS says it’s $16,100.

The next layer is taxed at 10% on taxable income up to $12,400. After that, the rate is 12%. Only the last portion of the conversion reaches that second rate. These figures assume single filing status, no other income, and federal tax only. A married couple’s $32,200 deduction would cover the entire conversion.

What Waiting Until 73 Looks Like

Assuming a 5% annual return and no withdrawals, the IRA grows to about $650,000 by age 73. IRS Publication 554 says owners must start taking RMDs by April 1 of the year after they reach that age. Under the IRS Uniform Lifetime Table, the factor at 73 is 26.5.

The converted path uses the same 5% return, with $30,000 moved at the start of each year for 11 years. It also assumes the 2026 brackets stay in place.

The larger RMD stacks on top of Social Security, so part of it can push income past the 12% bracket into the 22% bracket. The Roth never requires withdrawals during the owner’s lifetime, according to IRS Publication 17. The results depend on the assumptions. Lower returns or lower future tax rates make converting less valuable.

Who Fits This Profile

This retiree has no pension, isn’t collecting Social Security yet, has no rental income, and makes little taxable interest or dividends. Each of those income sources, when it exists, takes up bracket room and changes the math. Our pension coverage walks through that version.

Social Security Timing Shapes the Window

For anyone born in 1960 or later, taking at 62 for good cuts the benefit by 30%, according to SSA figures. Waiting past full retirement age makes delayed retirement credits of about 8% per year until age 70.

Taking early adds benefit income to the return and leaves less room for conversions. Benefits start to become taxable once half of them plus other income tops $25,000 for those filing individually. That threshold isn’t adjusted for inflation. Waiting keeps the conversion window open and raises the final check, so you have to make the two decisions together.

Limits That Can Bind Before the Brackets Do

Medicare adds an income-related surcharge, known as IRMAA, once a single filer’s modified adjusted gross income passes $109,000. The surcharge is based on income from two years prior and is charged separately to each participant. That means a conversion at 63 sets the premium at 65.

Marketplace health coverage is another limit for early retirees. Enhanced premium tax credits expired on Jan. 1, 2026. Income above 400% of the federal poverty level now cuts off premium help entirely. Conversion income counts toward that test, so a large conversion can cost a subsidy worth more than the tax it saves.

Paying the Tax From Outside the Account

The extra 10% tax on early distributions stops at age 59½. At 62, it doesn’t apply, but any tax kept back from the conversion still reduces the amount that reaches the Roth. Using cash from outside the IRA to cover the tax keeps the full conversion amount in the Roth. Our separate coverage explains the penalty trap for younger converters.

How Much to Convert Each Year

Each autumn, start by adding up the year’s other income and subtracting the flat amount taxpayers take off before tax. Next, find the room left under the chosen limit, whether that’s a tax bracket, an IRMAA tier, or a subsidy threshold, and convert enough to fill it. Converting more makes sense in down years, because the same tax buys a larger share of the account. That stretch from the last paycheck to the start of mandatory withdrawals offers the lowest tax rate many retirees will see again, which is why we sized up the window in detail in a free Roth guide.

First, figure out what the brackets look like this year. For a single taxpayer with no other income in 2026, gross income up to $66,500 stays within the 12% bracket.

Contact [email protected] for any questions or corrections.