Quick Read – A retired couple with $2.6 million can cut lifetime federal taxes by $94,000 by drawing from their IRA early instead of the brokerage first. – Between ages 65 and 72, married retirees can withdraw roughly $133,000 annually from a traditional IRA and never exceed a…
% federal tax rate. – Crossing $218,000 in modified AGI triggers $81.20 per person per month in extra Medicare Part B premiums, potentially erasing aggressive Roth conversion savings. – The conventional retirement playbook says spend taxable money first, let tax-deferred accounts grow, and touch the Roth last. For a 65-year-old couple sitting on $2.6 million across a traditional IRA, a Roth, and a taxable brokerage, that order sounds tidy
It also quietly hands the IRS an extra $94,000 over the rest of their lives. The reason is mechanical. Drain the brokerage first, and you spend your 60s in a near-zero tax bracket, then walk straight into a wall at 73 when required minimum distributions start, Social Security is already flowing, and every additional dollar gets taxed at 22% or 24%.
The fix is unglamorous: pull from the IRA earlier than feels natural, and protect the brokerage for the step-up in basis at death. The couple, in five lines – Both are age 65, married filing jointly, and fully retired – $1.4 million traditional IRA, $400,000 Roth IRA, $800,000 taxable brokerage – Spending $130,000 a year after tax – Social Security claimed at 70: $60,000 combined – Eight-year window (65 to 72) before RMDs and Social Security collide Why the 12% bracket is the whole game In 2026, a married couple filing jointly can typically withdraw roughly $130,000–$135,000 from a traditional IRA and remain within the 12% federal bracket, assuming no other meaningful income. That window represents one of the last periods of unusually low tax efficiency in retirement planning.