Two married couples can have the same $400,000 traditional IRA and still face very different federal tax bills when they convert it to a Roth IRA. The difference is not the balance or the brackets; it is the number of years they have left before required minimum distributions begin.
In this example, both couples want to move a $400,000 traditional IRA into a Roth IRA before RMDs start. One retiree is turning 62 in 2027, while the other is turning 70 that same year. Even though they start with the same amount and face the same tax structure, the tax cost of the conversion ends up much higher for the older couple because the income has to be compressed into fewer years.
Each dollar converted is treated as gross income in the year it is moved under 26 U.S.C. § 408A(d)(3)(A)(i). Roth IRAs do not carry lifetime withdrawal requirements in the same way traditional IRAs do, so the owner can avoid RMDs while alive. When fewer conversion years are available, the annual conversion amount rises and is layered on top of any other income the household already has.
How SECURE 2.0 Affects the RMD Timeline
Under current IRS rules, people who reach age 72 after 2022 and age 73 before January 1, 2033 have an RMD age of 73. Those who reach 74 after December 31, 2032 have an RMD age of 75. In this comparison, the 70-year-old reaches 73 in 2030, which leaves 2027 through 2029 for conversions, while the 62-year-old is governed by the later age-75 rule.
That is where the 11-year figure comes from. Counting from age 62 through 72 gives 11 years, and because this retiree’s deadline is later, the conversion window actually extends through age 74. In other words, 11 years is the low end of the available range.
Applying the Same $400,000 to Today’s Brackets
The math below uses the 2026 federal brackets for married couples filing jointly. The standard deduction for joint filers is $32,200, the 12% rate applies above $24,800 of taxable income, and the 22% bracket begins above $100,800. To keep the example simple, the IRA is assumed not to grow, and the separate senior deduction added by OBBB is left out.
The younger couple is assumed to have $60,000 in other income from a pension or part-time work, which creates $27,800 of taxable income before any conversion. Spreading the Roth conversion over the available years means converting about $36,364 annually, pushing taxable income to roughly $64,164. That amount stays entirely within the 12% bracket.
For the older couple, Social Security is likely already in the mix. In a typical year, 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. With $80,000 of other taxable income, this couple has about $53,000 of room left in the 12% bracket. A yearly conversion of about $133,333 fills that space, and the remainder 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, roughly 60% of each annual conversion falls into the 22% bracket. Over the full amount, they end up paying about $24,100 more in federal tax on the same $400,000 balance.
Larger Conversions Can Also Approach Medicare Thresholds
Because the conversion window is shorter, the 70-year-old couple’s yearly income would be about $213,333. That is only about $4,667 below the 2026 joint-filer threshold of $218,000.
Once income rises above that level, each spouse’s Part B premium increases from $202.90 to $284.10 a month. A little more taxable income, or investment growth inside the IRA, could push the couple over the limit. By contrast, the younger couple’s income of about $96,364 leaves much more room.
How Retirement Assets Are Distributed by Age
Federal Reserve Distributional Financial Accounts data show that 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 figures reflect the household sector as a whole and do not describe any single family’s finances.
What Could Change the Outcome
The comparison depends on assumptions that can shift over time. Social Security benefits rise with cost-of-living adjustments, which changes the income base for people already collecting. Tax brackets are also indexed for inflation each year. Future tax rates, the death of a spouse that moves the survivor into single-filer brackets, and the tax situation of heirs can all affect whether a Roth conversion makes sense.
A recent MarketWatch article also suggested that people who fear missing Roth conversion opportunities may be giving up less than they think. With every new inflation adjustment to benefits and brackets, the income base for each household changes as well.
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