Retirees Born in 1960 or Later Can Delay 401(k) RMDs Until 75, Opening Two Extra Years for Roth Conversions

Quick Read

• SECURE 2.0 delays the RMD starting age to 75 for people born in 1960 or later, giving them two additional years for tax-savvy Roth conversions.

• Moving $60,000 a year at ages 73 and 74 shifts $120,000 into a Roth and trims the first RMD at 75 by about $5,300.

• Large RMDs can make as much as 85% of Social Security taxable and can also trigger Medicare IRMAA surcharges worth roughly $2,300 a year for couples.

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

Take the example of a 66-year-old with $900,000 in a traditional 401(k). He may assume the IRS will force withdrawals at 73, but if he was born in 1960, he has until 75. That creates two extra years to shift money into a Roth before required distributions start.

Your Birth Year Quietly Changes the RMD Deadline

The rule comes from SECURE 2.0, the law enacted in 2022 that increased the age for required minimum distributions. People born from 1951 through 1959 generally start at 73, while those born in 1960 or later begin at 75.

In this example, the saver turns 74 in 2034, so required withdrawals would begin the following year. Someone born in 1959, by contrast, would have to begin withdrawals at 73.

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That timing difference matters because RMD dollars cannot be converted. In a year when an RMD is due, the withdrawal must come first and is taxed as ordinary income. Only after that can a conversion be made. For people born in 1960 or later, ages 73 and 74 offer a window without mandatory withdrawals taking up conversion room. Those years before RMDs begin can be among the lowest-tax periods of retirement.

Two Extra Years Can Move $120,000 Into a Roth

Here’s a simple model. Assume withdrawals and conversions from ages 66 through 72 are roughly offset by investment growth, leaving the account at about $900,000 on January 1 of the year the saver turns 73. For illustration, assume a steady 6% annual return.

The saver converts $60,000 at the start of ages 73 and 74, for a total of $120,000.

How Much Smaller the First RMD Becomes

At 75, the IRS divides the prior year-end balance by 24.6 under the Uniform Lifetime Table. Those two conversions reduce the first required withdrawal by about $5,300.

That reduction keeps compounding. Roth money does not re-enter the RMD calculation, because Roth IRAs do not have lifetime required distributions under 26 U.S.C. § 408A(c)(4).

Why Paying Tax Now Can Help Avoid a Bigger Tax Bill Later

At a 22% tax rate, each conversion costs $13,200, or $26,400 over both years. Paying that tax from a taxable account allows the full conversion amount to land in the Roth. The smaller first RMD reduces that year’s tax by about $1,170 at the same rate, although the full result also depends on future withdrawals, investment gains and the taxes paid upfront.

The bigger benefit is avoiding the tax cascade. RMD income is added on top of Social Security, which can make as much as 85% of benefits taxable. Medicare surcharges, known as IRMAA, add another layer and are based on income from two years earlier.

Under Medicare rules for 2026, a married couple filing jointly pays the standard Part B premium of about $203 a month if income from two years earlier is $218,000 or less. Above that level, each spouse pays an additional $81 a month for Part B, plus a Part D surcharge.

Together, those surcharges add up to about $2,300 a year for a couple. Roth conversions can trigger them as well, since 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 hitting the top of the 22% bracket at $211,400 of taxable income. That income level is the real ceiling to watch.

Steps to Consider Before Age 73

1. Check your birth year against the RMD rules. If you were born in 1960 or later, treat ages 73 and 74 as possible conversion years and use the 24.6 divisor to estimate the first RMD at 75.

2. Keep conversions below the relevant Medicare surcharge threshold. Under 2026 rules, that is $218,000 for joint filers and $109,000 for single filers. Keep in mind the two-year lookback. The $60,000 conversion is only an example; a low-income year may allow more, while a year with a large capital gain may allow less.

3. Pay the conversion tax with cash from outside the 401(k). If taxes have to come from the converted amount, reduce the conversion size, because withholding lowers what ultimately reaches the Roth.

Those two extra years are a real opportunity, but they also come with real tax costs. The retirees who benefit most will likely adjust their conversion amount each year based on that year’s income and the IRMAA threshold.