Retirees Born After 1959 Don’t Face a 401(k) RMD Until 75. On a $900,000 Balance, That’s Two More Years of $60,000 Roth Conversions

Kiplinger recently featured a reader asking, “Did I Miss My Chance to Do a Roth Conversion? I’m 75 With a Sizeable IRA.” It’s a question worth asking early, especially for retirees with large traditional 401(k) balances who want to move money into a Roth before required withdrawals begin.

Consider a 66-year-old with $900,000 in a traditional 401(k). He assumes the IRS will start requiring withdrawals at 73, but because he was born in 1960, he has until 75. That’s two additional years to move money into a Roth before required distributions start.

Your Birth Year Quietly Moves the RMD Deadline

The law behind that distinction is SECURE 2.0, passed in 2022. It raised the starting age for required minimum distributions (RMDs). People born from 1951 through 1959 generally start at 73, while those born in 1960 or later begin at 75.

Our saver turns 74 in 2034, so required withdrawals begin the next year. Someone born in 1959 has to start withdrawals at 73.

The gap matters because you can’t convert RMD dollars. In a year when an RMD is due, you take it first and pay ordinary income tax on it. Only then can you convert. People born in 1960 or later get ages 73 and 74 without mandatory withdrawals eating into their room for Roth conversions. Those silent years before required withdrawals begin can offer some of the lowest tax rates of retirement (we sized up that window in a Roth guide here: The Roth Window).

Two Extra Years Can Put $120,000 in a Roth

Here’s a simple model. Assume withdrawals and conversions from 66 through 72 roughly match investment growth, so the account still has about $900,000 on January 1 of the year the saver turns 73. As an example, assume a steady 6% annual return.

The saver converts $60,000 each January at 73 and 74, for $120,000 in total.

How Much Smaller Your First RMD Gets

At 75, the IRS divides your prior year-end balance by 24.6 using the Uniform Lifetime Table. The two conversions lower the first required withdrawal by about $5,300.

That gap keeps going. The Roth money never comes back into the RMD calculation, because Roth IRAs have no lifetime required distributions under 26 U.S.C. § 408A(c)(4).

Paying Tax Now to Defuse the Tax Cascade Later

At a 22% rate, each conversion costs $13,200, or $26,400 over both years. Pay it from a taxable account so the full conversion lands in the Roth. The smaller first RMD reduces that year’s tax by about $1,170 at the same rate. But the full comparison also depends on future withdrawals, investment growth and the taxes paid upfront.

The real payoff is avoiding the tax cascade. RMD income stacks on top of Social Security, which can make up to 85% of your benefits taxable. Medicare surcharges, called IRMAA, add another level, and they’re based on your income from two years earlier.

Under 2026 Medicare rules, a married couple filing jointly pays the standard Part B premium of about $203 a month if their income from two years earlier was $218,000 or less. Go over that line and each spouse pays another $81 a month for Part B, plus a Part D surcharge.

Together, those surcharges add about $2,300 a year for a couple. Roth conversions can trigger them too, because Medicare generally looks at income from two years earlier. The IRMAA test uses income before the standard deduction, so joint filers can reach the Medicare surcharge threshold before reaching the top of the 22% tax bracket at $211,400 of taxable income. That income line is your real ceiling.

Moves to Make Before You Turn 73

1. Check your birth year against the RMD rules. If you were born in 1960 or later, consider 73 and 74 as conversion years and use the 24.6 divisor to project your first RMD at 75.
2. Keep conversions below the applicable Medicare surcharge threshold. Under 2026 rules, that’s $218,000 for joint filers and $109,000 for singles. Remember the two-year lookback. The $60,000 conversion is just an illustration. A year with low income might support more, and a year with a large capital gain might support less.
3. Pay the conversion tax with cash from outside the 401(k). If the tax has to come out of the converted money, cut the conversion amount, since that withholding shrinks what ends up in the Roth.

The two extra years are a real opportunity, and they come with real tax bills. The retirees who benefit most will pick a new conversion amount each year based on that year’s income and the IRMAA line.

Contact [email protected] for any questions or corrections.