From 24/7 Wall St. · David Beren · · 1m 30s
Retirement Savings Strategy for Couples
Retired couples with $560,000 can convert $35,000 yearly for 13 years at 12% tax rate.
In brief
Retired couples with $560,000 can convert $35,000 yearly for 13 years at 12% tax rate. A couple retiring at 60 with $560,000 in retirement accounts can convert $35,000 annually for 13 years at 12% tax rate, while the average couple with the same balance faces $40,000 in required minimum distributions by age 73…
Retirement Savings Balance
A married couple stops working at 60 with $560,000 split between a 401(k) and a traditional IRA.
Typical Savings Comparison
Transamerica’s median household retirement savings for baby boomers is $270,000, so this couple is ahead.
Tax Advantage Window
For married couples filing jointly in 2025, the IRS applies 12% tax rate to taxable income from $23,851 to $96,950.
Roth Conversion Benefit
Each $35,000 conversion triggers a federal tax bill of $4,200 at 12% tax rate.
RMD Impact by Age 73
An untouched $560,000 grows to about $1.1 million by age 73, triggering $39,850 in required minimum distributions.
Social Security Interaction
The RMD adds to Social Security income, potentially pushing more dollars into higher tax brackets.
Roth IRA Advantage
The converting couple reaches 73 with about $620,000 in a Roth IRA and $436,000 still in pretax accounts.
Conversion Steps
Map taxable income year by year, project retirement income, and coordinate with Social Security claims.
Long-Term Outcome
The converting couple avoids $40,000 in required minimum distributions by age 73 through strategic tax planning.
The takeaway
A couple retiring at 60 with $560,000 in retirement accounts can convert $35,000 annually for 13 years at 12% tax rate, while the average couple with the same balance faces $40,000 in required minimum distributions by age 73.
