The Eight Years Between Retiring at 62 and Claiming Social Security at 70 Are the Lowest Tax Bracket Most Retirees Will Ever See. A Couple Spending $60,000 Can Convert About $70,000 a Year to a Roth at 12% and Never Pay 22% on It Again
Most retirees who delay Social Security until 70 spend their early 60s congratulating themselves on the strategy, unaware they are leaving behind the cheapest tax brackets they will ever see and setting up a far more expensive bill in their…
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Most new retirees quit at 62, live off savings, and wait until 70 for the largest Social Security check, filing returns with almost no taxable income. It feels efficient. It also sets up a much bigger tax bill in their 70s.
Delaying Social Security locks in the largest lifetime benefit, and money left in a traditional IRA keeps growing tax-deferred. But the tax code charges by the layer, and the layers during those eight gap years are the cheapest most retirees will ever see.
Retirees Leave Their Cheapest Tax Brackets Empty
For married couples who file a joint return for tax year 2026, the rate is 10% on taxable income up to $24,800 and 12% on income up to $100,800. Add the 2026 standard deduction of $32,200, and a couple can report $133,000 of gross income without a dollar taxed above 12%.
Section 408A lets you convert any amount from your traditional individual retirement account to a Roth. The converted money counts as ordinary income in the year you receive it. After that, qualified withdrawals come out tax-free, and Roth owners aren’t required to take distributions at any age while alive.
How a $60,000-a-Year Couple Converts $70,000 at 12%
Assumptions: married taxpayers, both 63, filing a joint return for 2026. They cover $60,000 of spending with IRA withdrawals and earn $3,000 in interest and dividends. No pension, no Social Security claimed. Only federal taxes apply.
| Line | Amount |
|---|---|
| IRA withdrawals for spending | $60,000 |
| Interest and dividends | $3,000 |
| Roth conversion | $70,000 |
| Total income | $133,000 |
| 2026 standard deduction | ($32,200) |
| Taxable income | $100,800 |
| Total federal tax | $11,600 |
| Tax on the conversion piece | $8,400 |
Over eight years, they move $560,000 into a Roth. Compared with paying 22% on the same dollars later, they save $56,000. Brackets adjust for inflation yearly, so recheck the ceiling each January.
Waiting Until 70 Can Cost Far More Than 22%
At 70, larger Social Security checks start. Required minimum distributions kick in at age 75 for anyone born in 1960 or later. Both land on the same tax return.
Section 86 then applies. Once half of benefits plus other income tops $44,000 for joint filers, up to 85% of benefits become taxable. In that zone, each extra $1 from the IRA can make another 85 cents of Social Security taxable. For a couple in the 22% bracket, that’s an effective marginal rate of 40.7%. Every dollar converted in your 60s avoids that later.
Three Traps That Can Shrink Your Conversion Window
- ACA health coverage. Retiring at 62 means buying insurance until Medicare at 65. Enhanced ACA credits ended after 2025, bringing back the subsidy drop at 400% of federal poverty level. Conversion income counts toward that test, so converting before 65 can cost your premium subsidy.
- Medicare’s two-year lookback. Medicare premiums are based on income from two years earlier. In 2026, joint filers at or below $218,000 pay the standard Part B premium of $202.90 a month. One dollar over raises each spouse’s premium to $284.10. The $133,000 couple stays well under it.
- Pay tax outside the IRA. Any tax withheld from the conversion never reaches the Roth. Also open a Roth early; earnings come out tax-free only after five years.
Who Should Leave the Traditional IRA Alone
The standard plan still works for couples with small IRAs whose future required withdrawals would land in the 12% bracket anyway. It also works when heirs will be in lower tax brackets than you, or when you plan to move from a high-tax state to one with no income tax. State tax rules vary, so wait until after the move to convert. If you’re charitably inclined, qualified charitable distributions can later send IRA money to charity tax-free.
Everyone else is sitting on eight years of cheap tax room that runs out at 70. We sized up that same low-bracket stretch, and how to use it, in a free Roth window guide. This is the kind of multiyear projection worth running with a fiduciary advisor or CPA before the first conversion.
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Vilma Rios is a tax professional and tax content contributor with more than 15 years of experience in tax and accounting. She specializes in federal tax research, tax education, and translating complex tax rules into clear, practical information for individuals, families, and small-business owners.
Vilma is a Content Tax Contributor II with the National Association of Tax Professionals (NATP), where she contributes to tax education and professional content. She has also presented tax information through webinars, including Spanish-language tax education, and has appeared on Telemundo 47 discussing tax topics and helping viewers understand important tax-filing requirements.
Her experience also includes tax and accounting work, tax research, IRS-related matters, and public tax education. While in college, Vilma volunteered in an IRS-sponsored tax assistance program and was recognized for her community service by local and state officials.
Known as “Your Tax Geek,” Vilma is passionate about making taxes easier to understand and helping people navigate an increasingly complex tax system.
