A $3 Million IRA at 75 Forces a $122,000 Withdrawal Whether You Need It or Not. With Social Security on Top, a Couple Sits in the 24% Bracket for Life, and Here’s the Ten-Year Plan Advisors Start Running at 65
A $3 million IRA sounds like retirement security, but the IRS turns it into a six-figure tax bill you never asked for. There is a ten-year window before that moment arrives, and most couples in their mid-60s have no idea…
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At 75, the IRS stops asking. Consider a married couple with $3 million in a traditional IRA. This year they must withdraw about $122,000 and pay ordinary income tax on all of it, whether they need the cash or not.
Add Social Security and a modest pension, and the couple’s last dollars land in the 24% bracket. The required withdrawal grows every year as the IRS divisor shrinks, so they’re likely to stay there for life. The fix starts a decade earlier, in the ten years between 65 and that first forced withdrawal.
Where the $122,000 Withdrawal Comes From
Required minimum distributions come from Section 401(a)(9) of the tax code. Under SECURE 2.0, anyone who turns 74 after December 31, 2032, has an applicable age of 75. That covers today’s 65-year-olds.
The formula divides the IRA’s prior December 31 balance by a factor from the IRS Uniform Lifetime Table (Table III). At 75 that divisor is 24.6. Divide $3,000,000 by 24.6 and you get $121,951. If you take less, the IRS charges an excise tax of 25% on the shortfall.
How Social Security Pushes the Couple Into the 24% Bracket
Here’s the example couple: both 75, filing jointly under 2026 rules, with $121,951 in RMDs, $84,000 in combined Social Security ($4,000 and $3,000 a month) and a $60,000 pension.
- Social Security: Their provisional income is far above the $44,000 joint threshold, so the maximum 85% of benefits is taxable. That’s $71,400.
- Adjusted gross income: $253,351.
- Deductions: The $32,200 2026 standard deduction, plus $1,650 for each spouse 65 or older. The new $6,000 senior deduction shrinks by 6% of MAGI above $150,000, so at this income it’s gone.
- Taxable income: $217,851.
For 2026, the joint 24% bracket starts at $211,400. Brackets work like fill lines, so only the top $6,451 is taxed at 24%. Federal tax comes to about $37,480.
Medicare Surcharges Arrive Two Years Later
Medicare sets IRMAA surcharges using income from two years earlier, so 2026 income determines the 2028 premium. Under the 2026 tiers, joint MAGI between $218,000 and $274,000 increases Part B from $202.90 to $284.10 a month per person, plus $14.50 for Part D. For the couple, that’s $2,296.80 a year.
The pressure keeps building. Assuming 6% annual growth, the RMD hits about $158,808 at 80 and $203,028 at 85. When one spouse dies, the survivor files as single. For single filers, the 24% bracket starts at $105,700 and 32% starts above $201,775.
Ten-Year Roth Conversion Plan That Starts at 65
If you were born in 1960 or later, ages 65 through 74 give you a ten-year window. Paychecks have usually stopped and RMDs haven’t started, which is the quiet period our free Roth conversion guide sizes up in detail. Take the same couple: an IRA of $1,675,184 at 65 grows to $3 million by 75 at 6% a year.
Each year, the plan converts just enough to keep MAGI at the $218,000 IRMAA line. Before Social Security starts at 70, there’s room for $158,000 a year. After it starts, the room falls to $86,600. Over ten years they convert $1,223,000, and every dollar is taxed at 22% or less.
| At age 75 (2026 rules) | No plan | Ten-year plan |
|---|---|---|
| Traditional IRA | $3,000,000 | $1,219,118 |
| Roth IRA | $0 | $1,780,882 |
| RMD | $121,951 | $49,558 |
| AGI | $253,351 | $180,958 |
| Taxable income | $217,851 | $137,173 |
| Federal tax | $37,480 | $19,602 |
| IRMAA | Tier 1 | None |
That’s $17,878 less federal tax in year one, and the gap widens as the RMDs grow. The plan pays tax up front on more than $1.2 million. The benefit comes from a lower rate, no surcharges, tax-free Roth growth and a survivor who isn’t squeezed by single-filer brackets. The plan assumes the conversion tax is paid from taxable savings rather than from the IRA.
Three Moves to Make Before Your First RMD
- Watch the first-year delay. You can push the first RMD to April 1 of the following year. Then you take two RMDs in one tax year.
- Give through your IRA. Qualified charitable distributions, allowed starting at age 70½, count toward your RMD and stay out of AGI.
- Recheck the IRMAA line every year. Brackets and tiers reset annually. If you stopped working, file Form SSA-44 to ask Medicare to use your lower current income.
State income tax changes, and some states exempt part of retirement income. Conversion sizing is the kind of math worth running each fall with a fiduciary tax advisor or CPA.
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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.
