A Retiree Turning 62 in 2027 Has 11 Conversion Years Before RMDs. One Turning 70 Has Three. The Same $400,000 Comes Out at 12% in the First Case and Mostly at 22% in the Second
Two couples hold the same $400,000 IRA and face the same tax brackets, yet one pays tens of thousands more in federal tax on the conversion. The only thing separating them is how many years they have left before RMDs…
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Two hypothetical married couples who each hold $400,000 in a traditional IRA plan to move all of it into a Roth IRA before required minimum distributions (RMDs) begin. For one couple, the retiree turns 62 in 2027, while the other retiree turns 70 that same year. They have the same balance and face the same tax brackets, but their tax bills on the conversion end up far apart. The gap comes down to how many calendar years each has to spread the income across.
Each converted dollar counts as gross income in the year of the conversion under 26 U.S.C. § 408A(d)(3)(A)(i). Roth IRAs have no lifetime withdrawal requirement because the minimum distribution rules that apply to traditional IRAs don’t apply to Roth IRAs while the owner is alive. With fewer years available, each year’s conversion gets bigger and sits on top of whatever other income the household already has.
How SECURE 2.0 Sets Each Retiree’s Deadline
Under current IRS rules, a person who reaches 72 after 2022 and 73 before January 1, 2033 has an RMD age of 73. A person who reaches 74 after December 31, 2032 has an RMD age of 75. The 70-year-old turns 73 in 2030, which leaves 2027 through 2029 as conversion years, while the 62-year-old falls under the age-75 rule.
Counting from 62 through 72 gives the 11 years in the headline. Because this retiree’s legal deadline is later, the conversion window actually runs through age 74, so 11 is the low end of the range (we sized up those quiet years between leaving work and starting RMDs in a free Roth guide).
Running the Same $400,000 Through Current Brackets
The comparison uses the 2026 federal brackets for married couples filing jointly. In 2026, the standard deduction for joint filers is $32,200. The 12% rate applies to taxable income over $24,800, and the 22% rate starts above $100,800. To keep the math simple, we assume the balance has no investment growth and exclude the separate senior deduction added by OBBB.
We assume the 62-year-old couple has $60,000 in other income from a pension or part-time work, bringing taxable income to $27,800 before any conversion. Converting about $36,364 a year increases taxable income to roughly $64,164. That stays entirely within the 12% bracket.
At 70, Social Security has usually started. In 2027, the Social Security Administration estimates the average benefit for an aged couple both receiving benefits at $3,355 a month after a 3.6% cost-of-living adjustment. This couple is assumed to have $80,000 of other taxable income, which leaves $53,000 of room in the 12% bracket. Converting about $133,333 a year uses up that room, and the rest is taxed at 22%.
| Measure | Turning 62 | Turning 70 |
|---|---|---|
| Annual conversion | $36,364 | $133,333 |
| Taxed at 22% each year | $0 | $80,333 |
| Federal tax per year | $4,364 | $24,033 |
| Total tax on $400,000 | $48,000 | $72,100 |
For the older couple, about 60% of each year’s conversion is taxed at 22%. Over the full conversion, they pay roughly $24,100 more in federal tax on the same balance.
Medicare Surcharges Sit Close to the Larger Conversions
Each year of the condensed conversion brings the 70-year-old couple’s income to about $213,333. That is roughly $4,667 below the 2026 joint-filer threshold of $218,000.
Above that line, each spouse’s Part B premium rises from $202.90 to $284.10 a month. A bit more other income, or some investment growth on the IRA, would push this couple over the threshold. The younger couple’s income of about $96,364 leaves a wide margin.
Where Retirement Account Money Sits by Age
The Federal Reserve’s Distributional Financial Accounts show households headed by someone aged 55 to 69 held 49.5% of defined contribution and annuity assets in the second quarter of 2026. Households headed by someone aged 70 and older held 9.4%. These are totals for the whole household sector, so they say nothing about any one household’s balance.
What Could Shift the Math Next
The comparison rests on assumptions that change over time. Social Security benefits rise with each cost-of-living adjustment, increasing the income base for anyone already collecting. Bracket thresholds adjust for inflation each year. Future tax rates, a spouse’s death that moves the survivor to single-filer brackets, and heirs’ tax rates also affect whether a conversion pays off.
A recent MarketWatch piece noted that people worried about missing out on Roth conversions may be giving up less than they think. The next inflation adjustment to brackets and benefits will reset the income base each household converts on top of.
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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.
