Retirement Tax Planning: A Guide for Ages 55 to 75

Retirement tax planning looks at your tax brackets, Roth conversions, required minimum distributions, Social Security taxation, Medicare premiums and withdrawal order together, across several years instead of one. It may help you see how each choice affects the others. Each piece also has limits, which I explain below.

This guide is educational. It is not tax advice for your situation, and it does not recommend any particular strategy. The figures below come from the government sources listed at the end and are current as of November 12, 2026. Tax rules change, so please confirm the details with a tax professional before you act.

Why do taxes look different in retirement?

While you work, most of your income arrives as a paycheck with tax withheld. In retirement, your income may come from several places at once: Social Security, pension income, withdrawals from pre-tax accounts, withdrawals from Roth accounts, and investment income in a taxable account. Each source can be taxed differently, and you often have some choice over how much you take from each one.

That choice is where planning comes in. It also means a decision in one area can spill into another. A larger withdrawal this year, for example, may change how much of your Social Security is taxed and may affect your Medicare premiums two years from now. The pieces below are the ones I see most often for people between roughly 55 and 75.

Why look at brackets across several years instead of one?

The federal income tax is progressive. Each rate applies only to the slice of taxable income that falls in that bracket, and your standard deduction comes off first. For tax year 2026, the standard deduction is $16,100 for a single filer and $32,200 for married couples filing jointly, with an additional $2,050 (unmarried) or $1,650 (married, per spouse) for people who are 65 or older. Those amounts are in IRS Revenue Procedure 2025-32.

The same revenue procedure sets the 2026 rates on taxable income. The lower brackets look like this:

Higher rates of 32%, 35% and 37% apply above those ranges. The reason to think in years, not one year, is that income in retirement is often uneven. A year with a large withdrawal, a sale of property or a Roth conversion may land in a higher bracket than the years around it. Some people look at whether they could even out income across several years. The limit is that this depends on assumptions about future income, future tax law and your own health and spending, and none of those are certain. Your state may also tax income differently than the federal government does.

What are Roth conversions, and what are their limits?

A Roth conversion moves money from a pre-tax account, such as a traditional IRA, to a Roth account. The converted amount is generally added to your taxable income for the year. In return, qualified withdrawals from the Roth account later may be tax-free.

Those possible benefits come with limits:

• You generally owe income tax on the converted amount now, and it sits on top of your other income.
• Since 2018, a conversion cannot be recharacterized (undone) afterward, according to the IRS.
• The added income may affect other items measured against income, including Social Security taxation and Medicare premiums, which I cover below.
• Whether it works out depends on your bracket now compared with later, which no one can know in advance.

If your employer plan allows it, there is a related move inside the plan itself. I explain the differences in my article on the Roth in-plan conversion. For a closer look at how conversions and Medicare premiums interact, see my article on Roth conversions and Medicare premiums (IRMAA).

How do required minimum distributions fit in?

Required minimum distributions, or RMDs, are withdrawals the IRS generally requires from traditional IRAs and most employer plans once you reach a set age. The IRS says that age is currently 73. Under SECURE 2.0, a Congressional Research Service summary notes the age rises to 75 for people born in 1960 or later. Roth IRAs do not require withdrawals during the owner's lifetime, and, since 2024, neither do designated Roth accounts in employer plans.

A few points that matter for planning:

• Your RMD is generally the prior year-end balance divided by a factor from an IRS life-expectancy table, and it is taxed as ordinary income.
• After your first year, RMDs are generally due by December 31 each year. That makes the end of the year a natural time to check that yours has been taken.
• The IRS says the excise tax for missing an RMD is 25% of the amount not withdrawn, or 10% if corrected within two years.

The limit to keep in mind is that RMDs raise your income whether or not you need the money. Some people plan earlier years with that in mind, which is one reason conversions and RMDs are often discussed together.

How is Social Security taxed?

Social Security is not taxed for everyone. To see if any of your benefit may be taxable, the IRS has you add half of your Social Security benefits to your other income, including tax-exempt interest, and compare that total with a base amount. For 2025 returns, the base amounts are $25,000 for single filers and $32,000 for married couples filing jointly. Above the first base amount, up to 50% of your benefits may be included in taxable income. Above $34,000 (single) or $44,000 (joint), up to 85% may be included.

"Up to 85%" does not mean an 85% tax rate. It means up to 85% of your benefit may be added to your taxable income, and then taxed at your regular rates. The limit worth knowing is that extra income, such as a conversion or a larger IRA withdrawal, may make more of your benefit taxable in the same year. That can make the real cost of added income higher than the bracket alone suggests.

How does Medicare IRMAA fit in, and what is the two-year lookback?

Medicare Part B and Part D premiums go up when your income is above certain levels. The surcharge is called IRMAA, the Income-Related Monthly Adjustment Amount. It uses your modified adjusted gross income from two years earlier. For 2026 premiums, that means your 2024 return.

According to the Centers for Medicare & Medicaid Services, the 2026 standard Part B premium is $202.90 per month. The surcharge starts when 2024 income is above $109,000 for an individual return or above $218,000 for a joint return. In the first tier above that, the total Part B premium is $284.10 per month. The tiers work like cliffs, so crossing a threshold by a small amount may move you into the next tier for that year.

Two limits matter here. First, income you report this year may not affect your premiums until two years from now, so the cost is easy to overlook. Second, if your income has dropped because of a qualifying life-changing event, such as retirement, you may be able to ask Social Security to use more recent income. A one-time choice such as a Roth conversion is not on that list. I walk through the tiers and the review process in my Roth conversion and IRMAA article.

What is the order of withdrawals in retirement?

When you hold money in different kinds of accounts, you may have some freedom over which one you draw from first. Retirement accounts often fall into three groups:

• Taxable accounts, where you may owe tax on interest, dividends and gains.
• Tax-deferred accounts, such as traditional IRAs and 401(k)s, where withdrawals are generally taxed as ordinary income.
• Tax-free accounts, such as Roth IRAs, where qualified withdrawals are generally not taxed.

Some people draw from taxable accounts first and leave tax-deferred accounts to grow. Others blend withdrawals from several account types in the same year to manage their bracket. Each approach has trade-offs. Drawing from one type first may leave a larger pre-tax balance, and a larger balance means larger required distributions later. There is no order that is right for everyone, because the answer depends on your income needs, your bracket, your RMDs, your Medicare premiums and your goals. This is a subject I plan to cover in more depth in a separate article.

What does late-year timing mean for retirement tax planning?

Several of these items run on a calendar-year basis, so late in the year is when they tend to come up. If you are subject to an RMD, it is generally due by December 31. A Roth conversion is generally counted as income for the year in which it is completed, so the date matters. And because Medicare uses income from two years back, income you realize this year may show up in your 2028 premiums.

The limit is that waiting until December leaves little room to adjust, and some transactions take days to process. If you want to look at any of this before year-end, it helps to start early and to bring your CPA into the conversation.

How do I work alongside my CPA?

I am an advice-only planner and I bill by the hour. I do not prepare or file tax returns, I do not manage investments, I do not sell insurance and I do not draft legal documents. My income tax planning work looks ahead at several years of income, Roth conversion scenarios, RMDs, Social Security and Medicare premiums. Your CPA remains the person who prepares your return and confirms how the rules apply to you.

Here is what I would bring to your CPA, and what I would ask in return:

• What is my projected taxable income this year, and which bracket would additional income fall into?
• How would an added withdrawal or conversion affect the taxable portion of my Social Security?
• How might this year's income affect my Medicare premiums two years from now?
• Are my RMDs and any estimated tax payments on track for year-end?
• Do any state income tax rules change the picture for my situation?

Common questions about retirement tax planning

How much income can a retiree have before owing federal income tax?

There is no single number. For 2026, the standard deduction is $16,100 for a single filer and $32,200 for married couples filing jointly, plus $2,050 or $1,650 per spouse for people 65 or older. Taxable income at or below your deductions generally results in no regular federal income tax, but Social Security taxation, state taxes and other rules may still apply. Your CPA can run your numbers.

Is there one way to lower taxes in retirement?

No single approach fits everyone. The tools covered in this guide, including multi-year bracket planning, Roth conversions and the order of withdrawals, may reduce taxes in some years and raise them in others. Each has limits, and the results depend on your income, your accounts and future tax law. That is why I look at several years together instead of one.

Do Roth conversions make sense for everyone?

No. A conversion adds to your taxable income now in exchange for possible tax-free withdrawals later, and it may raise your Medicare premiums and the taxable part of your Social Security. Some people find the trade-off worthwhile, and others decide not to convert. It depends on your bracket now and later, how you would pay the tax, and your goals.

When do I have to start taking required minimum distributions?

The IRS currently says age 73, and a Congressional Research Service summary says the age rises to 75 for people born in 1960 or later. Your first RMD is generally due by April 1 of the year after you reach that age, and later ones by December 31 each year. Check with your plan or your CPA for your own dates.

Do you prepare my tax return?

No. I do not prepare or file tax returns. I work with your CPA on planning, and your CPA prepares your return.

Who to talk with

Because these decisions touch each other, it helps to review them as a whole. For my clients, that starts with an Initial Engagement, which I describe in how the Initial Engagement works. I bill $395 per hour, with no asset-based fee, as shown on my page about hourly financial planning fees. I answer common questions about hourly planning on the FAQs page.

If you want to talk through whether any of this applies to you, you can schedule a free 30-minute introductory call. There is no cost for anything before you sign an agreement.

Sources

All sources were checked on November 12, 2026.

• Internal Revenue Service, Revenue Procedure 2025-32 (2026 tax rate tables, standard deduction and additional amounts for age 65 or older)
• Internal Revenue Service, Retirement topics: Required minimum distributions (RMD age, deadlines, excise tax, Roth exceptions)
• Congressional Research Service, Required Minimum Distribution (RMD) Rules for Original Owners of Retirement Accounts (August 29, 2024; RMD age changes under SECURE 2.0)
• Internal Revenue Service, Publication 915 (2025), Social Security and Equivalent Railroad Retirement Benefits (base amounts and the 50% and 85% inclusion levels)
• Social Security Administration, Request to withhold taxes (combined income thresholds for taxation of benefits)
• Centers for Medicare & Medicaid Services, 2026 Medicare Parts A & B Premiums and Deductibles (published November 14, 2025; standard Part B premium and IRMAA tiers)
• Social Security Administration, Form SSA-44, Medicare Income-Related Monthly Adjustment Amount - Life-Changing Event (qualifying events)
• Internal Revenue Service, Retirement plans FAQs regarding IRAs (Roth conversions cannot be recharacterized)

This article is for general education and is not personalized investment, tax, or legal advice. Tax rules, thresholds, and premiums change from year to year, and what applies to you depends on your individual circumstances. Please consult a tax professional.