# Pensioner's Tax Trap at 73 > A pensioner couple faces $50k tax bill at 73 due to 13 years of untouched 401(k)s. - Title: Pensioner's Tax Trap at 73 · 24/7 Wall St. | Shortify - Summary: A pensioner couple faces $50k tax bill at 73 due to 13 years of untouched 401(k)s. A couple retiring at 60 with $700,000 in 401(k)s will pay $50,000 in… - Keywords: pension, 401k, required withdrawals, tax bracket, social security, medicare surcharge, rmd, Pensioner's, Tax, Trap, 24/7 Wall St. - Source: 24/7 Wall St. — https://247wallst.com/personal-finance/2026/10/10/a-couple-who-retires-at-60-with-700000-in-two-401ks-and-lives-on-his-pension-for-13-years-will-meet-about-50000-of-required-withdrawals-at-73-on-top-of-the-pension - Author: David Beren - Published: 2026-10-10T18:27:39+00:00 - Read time: 1 min - Topics: pension, 401k, required withdrawals, tax bracket, social security, medicare surcharge, rmd ## Pension Fills Tax Brackets A pensioner's income fills tax brackets before required withdrawals start at 73. > A pension that pays every bill sounds like a retirement dream, but it quietly fills the tax brackets that conversion advice counts on being empty ## Tax Calculation at 73 The couple's $700,000 401(k)s grow to $1.32 million by 73, triggering $49,810 in required withdrawals. > Assume a 5% annual return and no withdrawals. With that return, the $700,000 grows to about $1.32 million by age 73 ## Taxable Income Breakdown The pension uses up the bottom tax brackets, leaving $33,000 of room at 12% bracket for annual tax. > Couples filing jointly see the 10% bracket end at $24,800 and the 12% bracket end at $100,800. That means the pension has already used up the bottom bracket and most of the next one ## Medicare Surcharge Risk Medicare IRMAA surcharge kicks in at $218,000 income, adding extra premiums for pension households. > Medicare’s income-related monthly adjustment amount, or IRMAA, is an extra charge. It adds to Part B and Part D premiums once joint modified adjusted gross income exceeds $218,000 in 2026 ## Pension Strategy Options Pension households can use qualified charitable distributions, early withdrawals, or strategic conversions to manage tax impacts. > Qualified charitable distributions. From age 70½, IRA owners can send up to $111,000 to charity in 2026. The gift counts toward the RMD and is excluded from income ## Tax Impact at 73 The couple faces $50,000 in required withdrawals at 73, plus pension income, pushing them into 22% tax bracket. > Using today’s figures, the extra standard deduction of $1,650 per married spouse 65 or older leaves about $148,310 of taxable income. That puts the top of the RMD in the 22% bracket ## Survivor Tax Implications A widow faces 24% tax bracket after Medicare surcharge, with reduced pension payments. > Her 24% bracket starts at $105,700, and her IRMAA line is $109,000. Her pension may shrink, but the RMDs on the combined balance stay just as large ## Annual Tax Planning Pension households must recalculate tax impact each fall to manage required withdrawals and Medicare surcharges. > Each fall, add up your income sources. Subtract the standard deduction, then see how much room you have under your chosen bracket and the IRMAA line that will apply two years out ## Tax Strategy for Pensioners Pension households should coordinate 401(k) withdrawals, delay Social Security claims, and use Medicare surcharge thresholds. > Coordinate both accounts. Each spouse’s RMD depends on their own age and balance, so decide whose account to draw down first. Rethink the Social Security claiming date. Delaying keeps benefits out of your 60s brackets ## Key takeaway A couple retiring at 60 with $700,000 in 401(k)s will pay $50,000 in required withdrawals at 73, plus pension income.