From 24/7 Wall St. · David Beren · · 1m
Roth IRA Conversion Tax Gap by Age
Retirees turning 62 vs 70 face stark tax differences on $400k IRA conversions.
In brief
Retirees turning 62 vs 70 face stark tax differences on $400k IRA conversions. A retiree turning 62 in 2027 pays $48,000 federal tax on $400k IRA conversion versus $72,100 for one turning 70. Originally reported by 24/7 Wall St..
Roth IRA Conversion Window
A retiree turning 62 in 2027 has 11 conversion years before RMDs start.
RMD Age Rules
People turning 72 after 2022 have RMD age 73 until January 1, 2033.
Tax Bracket Comparison
The 62-year-old couple pays 12% tax on $400,000 conversion versus 22% for the 70-year-old.
Annual Conversion Amounts
The 62-year-old converts $36,364 annually while the 70-year-old converts $133,333.
Tax Impact
The 70-year-old pays $24,100 more federal tax on $400,000 conversion than the 62-year-old.
Social Security Impact
The 70-year-old couple’s income hits $213,333 annually, near 2026 tax brackets.
Medicare Premiums
The 70-year-old couple’s Part B premiums rise from $202.90 to $284.10 monthly.
Federal Reserve Data
Households aged 55-69 hold 49.5% of retirement assets versus 9.4% for 70+.
The big picture
A retiree turning 62 in 2027 pays $48,000 federal tax on $400k IRA conversion versus $72,100 for one turning 70.
