The Center for Retirement Research at Boston College reported that roughly one in four retirees still claim Social Security at 62.
Many typically leave traditional Individual Retirement Accounts (IRAs) untouched until age 73 (75 for those born in 1960 or later) –– the age at which the IRS mandates annual withdrawals, called required minimum distributions (RMDs) –– reflecting a cautious default sequence.
That’s where the blind spot lies. Waiting can create a tax burden that follows the household throughout retirement.
Once required withdrawals begin, several sources of taxable income can pile up in the same years, increasing the amount of retirement income that gets taxed.
The years between the last paycheck and the first required withdrawal can therefore be especially valuable. Yet many retirees miss the opportunity to use those years to manage their taxes, and that window gets smaller with each passing year.
How an untouched IRA pushes Social Security into taxable territory
Tax-deferred growth inside a traditional IRA compounds for a decade or longer after retirement, producing a balance at 73 larger than most households anticipate.
Every dollar the IRS forces out as a required minimum distribution counts as ordinary income, directly raising adjusted gross income (AGI).
That higher AGI changes how much of a retiree’s Social Security becomes taxable, Mercer Advisors senior wealth adviser Jack McCloskey explained.
Ed Slott, certified public accountant, founder of Ed Slott and Company, and Professor of Practice at the American College of Financial Services, told Morningstar that voluntary distributions during low-income years lower the lifetime tax bill.
I always say the way to always pay the lowest tax over your lifetime is my ‘always’ rule. Always pay taxes at the lowest rates, even if it means paying taxes when they’re not required, like taking more than the RMD
Up to 85% of Social Security benefits become taxable for joint filers whose combined income crosses $44,000, the IRS stated.
The same inflated AGI also pushes households into higher marginal brackets, adding a second cost layer to each oversized IRA distribution.
The One Big Beautiful Bill Act’s $6,000 senior bonus deduction lowers tax owed on benefits through 2028 but leaves the underlying provisional-income thresholds untouched, according to the IRS.
Why the compounding trap also raises Medicare premiums
Medicare’s income-related monthly adjustment amount (IRMAA) adds a cliff-style surcharge tied to modified adjusted gross income (MAGI) from two years earlier.
Joint filers who cross $218,000 in MAGI see their Part B premium rise from $202.90 to $284.10 per person monthly, the Centers for Medicare and Medicaid Services (CMS) confirmed in its November 14, 2025, fact sheet on 2026 Medicare Parts A and B premiums.
Higher tiers push that monthly figure to $689.90, and Part D surcharges climb from $14.50 to $91.00 on top of the base cost.
One dollar above a threshold triggers the full penalty for a calendar year because IRMAA operates on hard cliffs. A large distribution taken in 2024 only appears as higher Medicare bills in 2026, long after the retiree can adjust the underlying income.
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RMD percentages increase with age under IRS distribution tables, so the surcharge pressure builds, the IRS showed.
Each annual cost-of-living adjustment to Social Security pushes more income past the surcharge cliffs, creating a cycle that accelerates deeper into retirement.
First-tier IRMAA surcharges on Part B and Part D combined add roughly $2,300 per year for a couple where both spouses are on Medicare, based on the CMS 2026 fact sheet.
IRMAA surcharges can compound retirement costs as income crosses Medicare thresholds, increasing premiums and creating larger bills later in retirement.Xavier Lorenzo / Getty Images
Reversing the sequence fills the 12% bracket and locks in a larger benefit
The 2026 standard deduction for married joint filers is $32,200, and the 12% bracket runs to $100,800 of taxable income, the IRS noted. Spending from the IRA during the bridge years fills that bracket at the lowest available rate, shrinking the balance before RMDs begin.
McCloskey also said that Roth conversions during the same period achieve a similar result by moving pretax dollars into a tax-free account at the current lower rate.
Either approach reduces the IRA balance the IRS uses to calculate required distributions at 73.
Delaying Social Security while spending down the IRA captures a gain, because benefits grow 8% for each year past full retirement age, according to the SSA.
Every future cost-of-living adjustment (COLA) is applied to that larger base, so even a modest annual increase delivers more dollars in absolute terms.
The higher earner’s claiming age also sets the survivor benefit, protecting whichever spouse lives longer and faces narrower brackets alone.
Economist Sita Slavov of George Mason University and the TIAA Institute found that widows faced a smaller financial shock when husbands delayed claiming.
That finding matters because surviving spouses file as single, where the 22% bracket begins at just $50,400, the IRS stated.
How retirees approaching the bridge years can measure the gap
Retirees nearing the period between their final paycheck and their first mandatory distribution can create a timeline showing when Social Security, IRA withdrawals, pensions, and other income sources begin.
This can reveal low-income years suitable for Roth conversions or early IRA withdrawals, McCloskey wrote in the Mercer Advisors article.
The gap between projected income and the bracket ceiling indicates how much room there is for IRA withdrawals or Roth conversions each year, Slott told Morningstar, and unused low-bracket space resets at the end of the calendar year.
Slott noted that once required distributions begin, the window for controlling the tax rate on those dollars has closed, since RMDs cannot be reduced by voluntary planning after the fact.
Related: Schwab warns of a retirement risk easy to overlook