A Couple Who Retires at 63 With $560,000 Between Two IRAs and Converts $45,000 a Year Through the Pension Years Will Meet About $13,000 of RMDs at 73. The Average Couple With the Same Balance Converts $0 and Meets $34,000

Imagine a world where two couples retire at 63 with identical savings of $560,000 split between two traditional IRAs. One couple uses the decade before required minimum distributions (RMDs) to move $45,000 a year into Roth IRAs. The other couple leaves the accounts alone, which is the default path for most families.

So what happens when both couples turn 73? Using IRS distribution rules and a steady annual growth assumption, we can show how one couple ends up with an RMD of about $13,000 while the other faces about $34,000.

How Two Identical IRAs Split Apart Over 10 Years

The conversation starts with IRS rules that require traditional IRA owners to start withdrawals at age 73, and those withdrawals are taxed as ordinary income. The first RMD equals the prior year-end balance divided by a life-expectancy factor. For a 73-year-old, that factor is 26.5.

The couple that never converts watches its $560,000 grow to about $912,000 by age 72. Dividing by 26.5 gives a first-year RMD of roughly $34,400. The couple must take that money out whether or not they need it to live on. The converting couple moves $45,000 at the end of each year from 63 through 72, for $450,000 of principal in total. Their traditional balance at that point is about $346,000, which produces a first RMD of roughly $13,100. That is about $21,400 less taxable income they must take in the first year alone.

The converted dollars still exist as $566,000 now sits in Roth accounts, and the original Roth IRA owner doesn’t have to take distributions regardless of age. The 5% growth rate is a modeling choice, a bit below the 10-year Treasury yield of 5.2% on October 13. If returns run higher, both balances get bigger and so does the gap between the two RMDs.

Why the Years Between 63 and 73 Carry the Most Weight

Every conversion comes with a tax bill. Under 26 U.S.C. § 408A(d)(3)(A)(i), the amount converted counts as gross income, but the 10% early-distribution penalty does not apply. Couples convert in their 60s because their taxable income is often lowest then, with their paychecks stopped and Social Security and RMDs not yet stacked up.

For 2026, married couples filing jointly get a standard deduction of $32,200, which covers a large share of a $45,000 conversion for a family with little other income.

In 2025, the 12% rate applied to joint taxable income up to $96,950. That leaves room to convert on top of a modest pension or savings withdrawals without moving into the 22% bracket. Those quiet years are often a couple’s lowest-tax window. The stretch between the last paycheck and the first RMD is the whole subject of our free Roth guide here: The Roth Window.

What a $34,000 RMD Does to Retirement Income at 73

According to the Social Security Administration, the average couple where both spouses collect benefits receives $3,355 a month after the 3.6% COLA. That’s $40,260 a year. The couple that never converted adds roughly $34,000 of forced income on top of that. Extra income can make more of their Social Security taxable and raise income-linked Medicare premiums.

The pressure grows over time. At 74, the factor falls to 25.5, so the share of the account that must come out each year keeps rising. The converting couple’s smaller traditional balance keeps forced withdrawals low, and their Roth money is available tax-free when they want it.

Assumptions Behind the Numbers

The model uses a few simplifications. Both spouses are the same age, returns stay at 5% every year, and conversion taxes are paid from savings outside the IRAs, but if the tax is withheld from the converted amount instead, less money reaches the Roth and the benefit shrinks. Conversions also show up in the income Medicare looks back on two years later, so converting at 63 can affect premiums at 65. A couple who expects to pay a lower tax rate at 73 than at 63 may come out behind by converting.

Steps for Couples Approaching 63 Before the Window Closes

1. Calculating the RMD at 73. Project a combined traditional IRA balance forward to age 72 and divide by 26.5 for an estimate. That number shows how much taxable income you’ll need.
2. Matching each conversion to a bracket. Some couples convert each year enough to use up the standard deduction and the 12% bracket. They recalculate every year as income changes.
3. Paying the conversion tax from outside savings. Paying from a taxable account continues the full converted amount growing tax-free in the Roth.

By 73, both couples have about the same total savings in this model. The converting couple paid part of their tax earlier, during low-income years. That leaves them with an RMD near $13,000 instead of $34,000 and more control over when their taxable income shows up.

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