The years between retiring and RMDs

In short

A friend of mine retired at sixty, and he told me he felt like a man standing at the edge of a quiet field with no fence. You are probably in the same spot, or close to it. The years after your paycheck stops but before the government makes you take money out are a rare stretch. In these years, you get to choose how much taxable income shows up on your return. You can pull money from a taxable account, a traditional IRA, or a Roth IRA, and each choice changes your tax bill. Some people use a lower income year to move traditional IRA money into a Roth IRA and pay tax on it at that lower rate. Required minimum distributions, called RMDs, start at age 73 for 2024 (source, checked 9/27/2026). Learning your options now costs you nothing. It just takes a little time.

The whole of it

What it is

I once sat on a porch with a retired schoolteacher who told me she had never paid so little tax as in her first year off work. She was proud and a little puzzled. Her salary was gone, her Social Security had not started, and her return looked nearly empty. That pleasant gap is what this guide is about.

The years between retiring and RMDs are the time when you have stopped earning a wage but the law has not yet forced you to withdraw from your tax deferred accounts. Tax deferred means you got a tax break when you put the money in, and you owe tax when it comes out. An RMD is the smallest amount the law requires you to withdraw each year once you reach a set age. Before that age, you decide what comes out and when.

You have earned this freedom. Many people spend forty years saving with little say over their taxes. In this window, you finally hold the pen.

How it works

You have probably noticed that a tax return is built from pieces of income stacked on top of each other. Wages, interest, withdrawals from a traditional IRA, and part of your Social Security can all land on the same return. Each dollar gets taxed at a rate based on where it sits in the stack. The federal system uses brackets, which are ranges of income taxed at rising rates. Only the dollars inside a bracket are taxed at that bracket's rate. The rest are taxed lower.

Now think about what changes when you stop working. Your wages drop to zero, so the bottom of the stack is empty. You can fill that space on purpose. You might withdraw from a traditional IRA, or convert some of it to a Roth IRA. A Roth conversion means moving money from a traditional IRA into a Roth IRA and paying tax on the amount moved that year. After that, qualified Roth withdrawals are not taxed.

Why would anyone pay tax now? Because RMDs can push income into higher brackets later. Once RMDs begin, the amount is set by a formula from IRS tables and your balance. You lose the choice. Filling the low brackets early can shrink the balance that RMDs will later be based on. Whether that trade makes sense depends on your own numbers, and it can go either way.

There is a second piece to watch. Some of your Social Security can become taxable when your other income rises. The IRS explains how in Publication 915. Also, your income can affect what you pay for Medicare Part B and Part D through the income related monthly adjustment amount. The Social Security Administration explains that on its Medicare premiums page. So a larger conversion is not free of side effects.

The numbers, and where to find yours

You want a few figures in hand before you make any move. Some change every year, so this guide does not print them as fact. The standard deduction for a single filer is the current figure, which the official source publishes each year. That is the amount of income the law lets you ignore before tax starts. The top of the 12 percent bracket for a single filer is the current figure, which the official source publishes each year, and the top of the 22 percent bracket is the current figure, which the official source publishes each year. The age when RMDs begin is 73 for 2024 (source, checked 9/27/2026). The original owner of a Roth IRA has no RMDs during life.

You can find your own numbers in a few places. Your taxable income appears on your most recent Form 1040. The IRS publishes the current brackets and the standard deduction on its website. Publication 590 B covers IRA distributions and the RMD rules. The uniform lifetime table used to compute RMDs sits in that same publication. Your IRA balance as of December 31 of last year is on your year end statement.

Write down three things. First, your expected income for the year outside of any IRA money. Second, the top of the bracket you would like to stay within. Third, the gap between them. That gap is your room.

A worked example

Let me tell you about a woman named Ruth. She retired at sixty two after a career in a school office. She is single. She has a traditional IRA of 400,000 dollars and a small pension that pays 14,000 dollars a year. She does not start Social Security until seventy. For this story, we will use round figures of our own. We will pretend the standard deduction is 15,000 dollars and the top of the 12 percent bracket is 48,000 dollars of taxable income. Those two numbers are made up for the story. Check the real ones for the year you are in.

Ruth starts with her pension of 14,000 dollars. She subtracts the standard deduction of 15,000 dollars. That gives 14,000 minus 15,000, which is less than zero, so her taxable income counts as 0 dollars. She has room to fill.

Ruth wants to stay within the 12 percent bracket. The top of that bracket, in our story, is 48,000 dollars of taxable income. Her room is 48,000 minus 0, which is 48,000 dollars. But there is more. Her deduction is 1,000 dollars larger than her pension, because 15,000 minus 14,000 is 1,000. That extra 1,000 dollars of deduction shelters the first 1,000 dollars she adds. So the most she could add and still land at the top of the 12 percent bracket is 48,000 plus 1,000, which is 49,000 dollars.

Suppose Ruth converts 40,000 dollars. Her income is 14,000 plus 40,000, which is 54,000 dollars. She subtracts the 15,000 dollar deduction. Her taxable income is 54,000 minus 15,000, which is 39,000 dollars. That is under the 48,000 dollar top of the 12 percent bracket. Her tax on that sum comes from the 10 percent and 12 percent rates, and none of it reaches the 22 percent bracket. She pays tax now, at those lower rates. Her traditional IRA falls from 400,000 to 360,000 dollars, because 400,000 minus 40,000 is 360,000. Her Roth IRA grows by 40,000 dollars. Later RMDs would be figured on a smaller balance.

Ruth checks one more thing. She looks at Publication 915 to see whether any Social Security would be taxed. She has not started benefits, so there is none this year. She writes a note to herself to check again when she starts.

Where it goes wrong

I have watched good people trip on this, and it is never because they were careless. It is because the rules have edges that are hard to see. Here are the common ones.

Converting too much in one year is one. A large conversion can push you into a higher bracket than you meant to reach. It can also raise your Medicare premiums two years later, since Medicare looks back at an earlier tax return. The Social Security Administration explains that lookback. That is a real cost, so count it.

Paying the tax bill from the IRA itself is another. If you take the tax out of the money you are converting, less lands in the Roth IRA. It also adds to your taxable income. Paying the tax from a regular savings account leaves more inside the Roth IRA. If you are under age 59 and a half, taking money out to pay the tax can also bring a penalty.

Forgetting state tax is a third. Some states tax IRA money and some do not. Your state tax office can tell you.

Skipping the five year rule is a fourth. Each Roth conversion has its own five year clock. If you are under 59 and a half, taking out converted money before that clock runs out can bring a penalty. The IRS explains this in Publication 590 B.

Last, remember that every household is different. Your health, your other income, and your family all matter. A tax professional you trust can check your numbers before you file.

Questions to answer before you leave this page

Do you know what your taxable income will be this year without any IRA withdrawals, and have you written down the top of the bracket you are curious about? How much room sits between those two numbers, and what would a Roth conversion of that size do to your tax bill? Have you checked whether your extra income could make more of your Social Security taxable, or raise your Medicare premiums two years from now? Would you pay the tax bill from savings outside the IRA, and do you have enough set aside to do that? When does your first RMD begin, and what will it look like if you do nothing at all? Who could sit down with you, a tax professional or a trusted friend, to check your numbers before you file?