10 Year-End Money Moves for Retirees in Their 60s in 2026

For a married couple both 65 or older, the new senior deduction changes where the natural conversion stopping points sit. Their standard deduction is $35,500 ($32,200 plus $1,650 each), and the senior deduction adds up to $12,000 more while MAGI stays at or below $150,000. That puts the top of the 12% bracket at about $148,300 of gross income, just under the phase-out. Above $150,000, each spouse's $6,000 shrinks by 6% of the excess, so the couple loses $12 of deduction for every $100 of added income until it is gone at $250,000. In the 22% bracket that adds roughly 2.6 points, so a conversion dollar between $150,000 and $218,000 costs about 27% once Arizona's 2.5% is included. Filling the 22% bracket completely takes gross income to roughly $247,000, which crosses the first IRMAA tier and sits just under the $250,000 net investment income tax line.

IRMAA is a cliff, and that shapes the size of every conversion from 63 on. Using 2026 married thresholds, the first tier starts above $218,000 of MAGI and adds about $1,148 per person per year; the second starts above $274,000 and adds about $2,885 per person. The 2028 thresholds that will actually apply to 2026 income will be indexed somewhat higher, so using this year's numbers builds in a small cushion. The efficient stopping points are a few thousand dollars under a threshold, or near the top of a tier once you have decided a tier is worth paying. Crossing $218,000 by $5,000 costs a couple the same $2,300 as crossing it by $55,000. Converting in November or December, after dividends and fund distributions are mostly known, makes that precision realistic.

Capital gains harvesting and Roth conversions compete for the same space. Long-term gains are taxed at 0% federally only while total taxable income stays at or below $98,900 for married couples in 2026, and ordinary income, including conversion income, fills the brackets first. In the overlap zone, every conversion dollar pushes a dollar of gain from 0% to 15%, so the true cost of that conversion dollar is 12% plus 15%, or 27%, not 12%. The practical result is that most years should favor one or the other. A couple with large unrealized gains and modest IRAs may be better off harvesting gains at 0% and converting little. A couple with a large IRA and a looming RMD problem usually converts through the 0% range and uses losses, not gains, to manage the taxable account.

Social Security timing sets how wide the conversion window stays. Before benefits start, a retired couple may have little taxable income beyond dividends and interest, leaving most of the 12% and 22% brackets open. Once benefits start, up to 85% of them become taxable. A couple collecting $70,000 a year could add nearly $60,000 of taxable income, which is conversion room that disappears. Delaying the higher earner's benefit to 70 keeps the window wider and raises the survivor benefit, at the cost of drawing more from the portfolio in the meantime. That is why the claiming decision and the conversion plan should be made together. Arizona does not tax Social Security, but the federal inclusion is what shrinks the room.

Charitable giving can offset a large conversion year if it is timed for it. Starting in 2026, itemizers can deduct charitable gifts only above 0.5% of AGI, and non-itemizers get a separate deduction of up to $2,000 for joint filers on cash gifts to public charities. For a couple who gives $10,000 a year, a practical approach is to bunch several years of gifts into a donor-advised fund, funded with appreciated shares, in the same year as a larger conversion. The gift clears the standard deduction, the deduction offsets part of the conversion income, and the shares' gains are never taxed. Once either spouse reaches 70 1/2, qualified charitable distributions from the IRA usually become the better tool, because they reduce AGI directly and help with IRMAA and the senior deduction.

October is for coverage and information. Read your Medicare plan's Annual Notice of Change and make any switch by December 7. If you plan to start Social Security in early 2027, apply now, up to four months ahead. Pull year-to-date income from every account so the projection starts from actual numbers, and note which mutual funds in the taxable account are likely to pay large year-end distributions.

November is for the projection and the decisions that depend on it. Once fund distribution estimates are out, run the 2026 projection, pick the conversion size, and decide whether this is a gain harvesting year or a loss harvesting year, since the two compete for the same bracket room. Decide on any donor-advised fund contribution now, because transferring shares takes time. If you or a younger spouse need ACA coverage for 2027, compare plans after November 1 and enroll by December 15 for a January 1 start.

December is for execution, and the real deadline is the custodian's, not the IRS's. Many custodians set cutoffs for conversions and distribution requests in early to mid-December, so aim to submit by roughly December 10. Refill the cash reserve, do rebalancing trades inside the IRA, and if you are short on estimated payments, withhold extra tax from a December IRA distribution, which counts as paid evenly through the year. Otherwise, the fourth-quarter estimate is due January 15, 2027.

Consider a married couple, both 66, retired, with $1.9 million in IRAs, $600,000 in a taxable account, and $25,000 of annual dividends and interest. One spouse claimed Social Security at 66 at $36,000 a year; the other plans to wait until 70. Converting roughly $90,000 lands near the top of the 12% bracket with the full senior deduction. Converting roughly $160,000 keeps MAGI under the $218,000 IRMAA threshold. The extra $70,000 costs about 27% all-in, so the choice depends on whether they expect RMDs at 75, plus two Social Security checks, to push them into the 24% bracket later, or to leave a surviving spouse facing single brackets. In an illustrative projection where the IRA grows to $2.5 million by 75, the larger conversion usually wins.

• Filling the 22% bracket without checking IRMAA, when the top of that bracket for a couple 65 or older sits near $247,000 of MAGI, well past the first tier at $218,000.
• Harvesting gains at 0% and converting in the same year without realizing each conversion dollar pushes a dollar of gain into the 15% rate.
• Ignoring the senior deduction phase-out, which quietly adds about 2.6 points to a couple's marginal rate between $150,000 and $250,000 of MAGI.
• Submitting a conversion request on December 29 and finding the custodian's processing cutoff passed a week earlier.
• Filing Form SSA-44 to appeal IRMAA caused by a Roth conversion or a home or stock sale, neither of which is a qualifying life-changing event.
• Letting a Medicare plan auto-renew without reading the Annual Notice of Change, then discovering in January that a key drug moved to a higher tier or out of the formulary.
• Selling stocks after a down year to fund spending when the cash reserve existed precisely to cover that year.