After 30 Years of Managing Their Own Money, Some Retirees Are Done. The Four Ways to Hand Off $2.4 Million, and the Price of Each
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On $2.4 million, a full-service advisor charging 1% to 1.25% of assets a year costs $24,000 to $30,000 every year. A low-cost advisory service at about 0.30% costs $7,200. The useful question is which of those dollars pay for work that shows up on the tax return.
Consider a married couple with $2.4 million, mostly in a traditional IRA, a few years before required minimum distributions begin. They built the portfolio themselves, and their method worked. What changed is the problem. Saving followed one rule, while taking follows several tax rules that interact, and some of those choices are permanent.
Withdrawal Years Stack Tax Rules That Interact
For an IRA owner born in 1959, RMDs begin at age 73, and the first one is due by April 1, 2033. The IRS Uniform Lifetime Table factor at 73 is 26.5. A missed RMD causes an excise tax of 25% of the shortfall, which drops to 10% if corrected within the legal window.
Every withdrawal or Roth conversion also counts toward Medicare’s income-related monthly adjustment amount (IRMAA). In 2026, joint filers with modified adjusted gross income above $218,000 pay $81.20 a month more per person for Part B and $14.50 more for Part D. For a couple, that first tier costs $2,296.80 a year. Premiums are set from the tax return filed two years earlier.
Roth conversions are final. Federal law bars recharacterizing a conversion back to a traditional IRA (26 U.S.C. § 408A(d)(6)(B)(iii)), so a conversion that lands one dollar over an IRMAA threshold stays on the record.
Four Handoffs Priced on $2.4 Million
Table Assumptions: tax year 2026; married filing jointly; $2.4 million balance held flat with no growth; advisory fee charged on the full balance; federal figures only, since state income tax varies.
| Option | Annual cost | RMD math | Roth conversion sizing | IRMAA tiers | Withdrawal order | Survivor can run it |
|---|---|---|---|---|---|---|
| Target-date or balanced fund | Varies by provider | Household | Household | Household | Household | Investing only |
| Robo-advisor | Varies by provider | Varies by platform | Household on most platforms | Household on most platforms | Varies by platform | Investing only |
| Low-cost advisory | $2,400,000 × 0.30% = $7,200 | Assigned | Check service scope | Check service scope | Assigned | With a contact person |
| Full-service advisor | $2,400,000 × 1% = $24,000; × 1.25% = $30,000 | Assigned | Assigned | Assigned | Assigned | With a named advisor |
- Target-date or balanced fund. Costs vary by provider and come out of fund returns. You pay for automatic allocation and rebalancing. All the tax work stays on your plate: RMD amounts, conversion sizing, IRMAA tiers and which account to draw from.
- Robo-advisor. Costs vary by provider. You pay for automated rebalancing and portfolio maintenance. You give up household-specific assessment, such as sizing a conversion against your own IRMAA threshold.
- Low-cost advisory service. The fee is $7,200 a year. You pay for a person who can run the RMD and withdrawal math. The service agreement sets how much conversion and Medicare planning is included.
- Full-service advisor. The fee runs $24,000 to $30,000 a year. You pay for coordinated tax, withdrawal and estate planning through one relationship. The fee also grows as the balance rises.
Firing an Advisor Is Reversible; a Conversion Is Permanent
You can undo any of the four transfers. A fund can be sold, a robo account closed, an advisory agreement ended. Tax decisions made in the meantime stay made: a completed conversion, or reported income that sets Medicare premiums two years later.
That makes the timing of a transfers a tax decision too. Assigned before the conversion years, and someone else sizes the conversions. Assigned after, and those numbers are already set.
Survivor Files Single Against Half the Thresholds
In 2026, the standard deduction falls from $32,200 for joint filers to $16,100 for a single filer. The first IRMAA threshold drops from $218,000 to $109,000. The 24% bracket starts above $211,400 for joint filers and above $105,700 for single filers.
The IRA distributions keep coming while the brackets contract. With a fund or robo-advisor, the surviving spouse runs that math alone. With an advisory relationship, the survivor has a contact who already knows the accounts, as long as both spouses have met that person.
Where the Fee Appears in Writing
For a potential advisor, the fee schedule is in the Form ADV Part 2A brochure, which describes how fees are calculated, including whether the percentage steps down above certain balances. For an existing account, look at the advisory fee line on the account statement, add it up as a dollar figure for the year, and compare it with $7,200, $24,000 or $30,000. If retirement taxes are where the real money leaks out, we mapped nine of the IRS rules that quietly drain accounts in a free guide here: The Retiree’s Tax Trap Map.
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Jake has been been working in financial media for almost 15 years. He focuses on all things personal finance for 24/7 Wall St. with high hopes to educate and entertain. Most recently, Jake spent 12 years working various roles at The Motley Fool. He started copy editing fool.com content, worked on premium and marketing campaigns, and helped launch The Ascent, a personal finance brand.
His work has been featured on platforms like MSN, Yahoo Finance, USA Today, and more. He's written about credit cards, social security, ETFs, savings accounts, and just about anything else you can imagine when thinking about money. Jake love to cook, play golf, and tell people he's never had a cavity. (It's true!)
