RMDs, Roth conversions, and IRMAA: managing the retirement tax brackets

Most retirees with large pre-tax accounts face the same pattern: low taxable income in the first years of retirement, then a jump once required minimum distributions start. Planning across that transition can save a significant amount of tax.

When RMDs start

• If you were born from 1951 through 1959, RMDs begin at age 73. The age for 1959 births follows IRS proposed regulations.
• Anyone born in 1960 or later begins at age 75.
• Roth IRAs have no lifetime RMDs, and since 2024 neither do Roth 401(k)s.

The penalty for a missed RMD is 25% of the shortfall, reduced to 10% if corrected within the correction window.

The gap-year Roth conversion

Between retirement and RMD age, your taxable income may be unusually low. Converting part of your pre-tax IRA to a Roth IRA in those years:

• Fills up the 12%, 22%, or 24% brackets that would otherwise go unused.
• Shrinks future RMDs, which can keep you out of higher brackets later.
• Leaves heirs Roth money. Non-spouse heirs must generally empty inherited IRAs within 10 years, and if you die after your RMDs have started, they must also take annual RMDs from an inherited traditional IRA along the way. An inherited Roth IRA has no annual RMDs, which makes tax-free Roth assets especially valuable to heirs.

In Connecticut

For 2026, Connecticut fully exempts Social Security, pensions, and traditional IRA withdrawals when federal AGI is under $100,000 joint or $75,000 single. A conversion or RMD that crosses that line starts pulling those benefits into state tax, so Connecticut's cost on the converted dollars can exceed its 6.99% top rate. Above $150,000 joint and $100,000 single, the exemptions are gone, and extra conversion dollars no longer pull other retirement income into tax. If you're leaving the state, federal law bars Connecticut from taxing retirement income you receive after you've changed domicile and stopped being a Connecticut resident. Our Connecticut retirement guide works through an example.

Key numbers: RMD age 73 or 75 · IRMAA based on income from two years earlier · missed-RMD excise tax 25%, or 10% if timely corrected.

Medicare IRMAA and the two-year lookback

Medicare Part B and D premiums rise in steps once modified AGI passes certain thresholds, and Medicare uses your tax return from two years earlier. A large conversion at 63 therefore raises premiums at 65. At the first IRMAA tier for 2026, crossing the threshold by $1 adds about $975 a year per person in Part B surcharges, or about $1,150 with Part D. Size conversions to land just under a threshold.

If your income dropped because you retired, file Form SSA-44 to ask Social Security to use your current income instead.

A worked example

A married couple retires at 64 with $2.2M in pre-tax IRAs and $40,000 a year of pension and interest income. Assuming about 2% annual growth, projected RMDs at 75 would be roughly $110,000 a year, on top of Social Security. They convert about $120,000 a year from 64 to 74, staying within the 22% and 24% brackets and under their target IRMAA tier. Projected lifetime federal tax drops meaningfully, and their RMDs at 75 are about half as large. Before Medicare starts, the conversions also raise the income used for any ACA marketplace premium tax credit, so that cost belongs in the projection as well.

Withdrawal order

The traditional rule of drawing on taxable accounts first, then pre-tax, then Roth, isn't always best. A blend often works better: pre-tax withdrawals to fill low brackets, taxable accounts at 0% or 15% capital gains rates, and qualified Roth money to cover lumpy expenses without pushing up MAGI.

Common mistakes

1. Converting so much in one year that you jump two brackets and an IRMAA tier.
2. Paying the conversion tax from the IRA itself, which shrinks the benefit.
3. Forgetting state tax on conversions if you plan to move to a no-income-tax state.
4. Missing the first RMD's timing and doubling up in one year.

How Summer Associates helps

Summer Associates runs a 10- to 20-year bracket projection, recommends an annual conversion amount, and revisits it each fall with actual year-to-date income.

This guide is general education based on federal and Connecticut law as of 2026-11-15. State rules differ and facts matter. Before acting, get advice for your situation from Summer Associates or another qualified advisor.