A 68-Year-Old With $850,000 in a Traditional IRA Is Sitting on a Six-Figure Tax Bill.
Here’s How Retirees Shrink It
Quick Read – A 68-year-old has a five-year window before RMDs begin at 73, which is the prime opportunity to shrink a six-figure IRA tax bill. – Partial Roth conversions topping off the 22% bracket can move roughly $90,000 annually out of a traditional IRA at lower tax rates. – QCDs let retirees 70½ and older send IRA funds directly to charity, cutting AGI and reducing Social Security taxes and Medicare surcharges simultaneously. – Two retirees, same $1 million, same 4% rule, buy one finished with $1.4 million, the other hit $0 in 12 years. Our free reader guide explains the flaw that separated them, and the income-first method built to avoid it. An $850,000 traditional IRA looks like a comfortable retirement stash.
Every dollar inside it is still owed to the IRS at ordinary income rates. For a 68-year-old single filer, that pretax balance sits behind a tax bill that can easily cross into six figures depending on how and when the money comes out. The 2026 federal brackets set the rules.