Tax Bracket Strategy From 60 to 73: A Decade-by-Decade Plan

Start with what changed. The One Big Beautiful Bill Act, signed July 4, 2025, made the current brackets permanent, so the old argument to convert before rates rise in 2026 no longer applies. The reasons to manage brackets now are structural: pre-tax balances that keep growing into large RMDs, Medicare IRMAA surcharges, the taxation of Social Security, and the surviving spouse who files single with roughly half the bracket room. For 2026, the married filing jointly 12% bracket ends at $100,800 of taxable income, the 22% bracket at $211,400 and the 24% bracket at $403,550. RMDs begin at 73 if you were born from 1951 through 1959, and at 75 if born in 1960 or later, which gives younger readers two extra years in this window.

Stage 1, ages 60 to 62: the ACA and capital gains stage. If you have retired and buy coverage on the marketplace, the binding limit is usually not a tax bracket but the ACA subsidy cliff. The enhanced premium tax credits expired after 2025 and had not been restored as of October 2026, so a two-person household with MAGI above about $84,600 for 2026 coverage (400% of the federal poverty level) loses the credit entirely. Below that line, Roth conversions come out of your subsidy as well as your tax bill. This stage is often better used for capital gain harvesting: married couples pay 0% federal tax on long-term gains up to about $98,900 of taxable income in 2026. If you are still working, the job usually fills the brackets and the planning is about maximizing pre-tax or Roth contributions, not conversions.

Stage 2, ages 63 and 64: the IRMAA lookback begins. Medicare premiums at 65 are based on your MAGI from two years earlier, so income at 63 sets your premiums at 65. The first IRMAA tier for 2026 starts at $218,000 of MAGI for joint filers and $109,000 for single filers, and Roth conversions and capital gains both count. Going one dollar over a tier triggers the full surcharge for that tier for the year. If you are still on the ACA, the subsidy cliff may bind before IRMAA does.

Stage 3, age 65 until Social Security starts: the main conversion window. Once you are on Medicare and before Social Security begins, your taxable income is often the lowest it will ever be. For 2026, a married couple both 65 or older gets the $32,200 standard deduction, $1,650 more for each spouse, and the temporary $6,000 senior deduction for each spouse through 2028, which phases out above $150,000 of MAGI. That is up to $47,500 of deductions, so roughly $148,300 of ordinary income stays within the 12% bracket. Filling the 22% bracket reaches about $246,900 of gross income, which is above the $218,000 IRMAA line, so for most couples in this stage IRMAA is the real ceiling. Converting into the senior deduction phaseout range costs an extra 6 cents of deduction per dollar, which raises the effective rate in that band.

Stage 4, Social Security on through 72 (or 74): the narrowing window. Once benefits start, up to 85% of them become taxable as other income rises, and the thresholds ($32,000 and $44,000 of provisional income for joint filers) are not indexed. In the range where each extra dollar of income also makes 85 cents of Social Security taxable, a 22% bracket conversion carries an effective rate near 40.7%. Conversions still make sense for many households, but they cost more, and the right amount is usually smaller. At 70½, qualified charitable distributions of up to $111,000 per person (2026) open up, and they reduce AGI directly. Then RMDs arrive, and the decade's planning shows up in how large they are.

For a household with $1.5M to $5M, most of which is pre-tax, the order of work is usually: decide when each spouse claims Social Security, decide how you will cover health insurance before 65, then set a yearly bracket and IRMAA target for each age. Claiming Social Security later stretches Stage 3, which is the cheapest stage for conversions. Claiming early shortens it. That is why the claiming decision and the conversion plan should be made together.

Pick the ceiling for each year, not one number for the decade. At 61 on the ACA, the ceiling might be the $84,600 subsidy line. At 66 with Social Security deferred, it might be just under the 2026 IRMAA tier of $218,000. At 71 with both benefits on, it might be the top of the 12% bracket. Writing down that ceiling each January, and checking it in the fourth quarter after you know your income, is what turns bracket management from a theory into something you actually do.

Arizona keeps the state side simple. Arizona taxes Roth conversions, IRA withdrawals and pensions at its 2.5% flat rate and does not tax Social Security, so the state cost of a conversion is predictable, and Social Security does not raise your Arizona tax as it does federally. The tradeoff to weigh each year is the same: pay a known rate now, or leave the pre-tax balance to grow into RMDs that you, a surviving spouse or your heirs will pay at rates you do not control.

• Planning around the old 2026 tax sunset, when OBBBA made the current brackets permanent and the case for conversions now rests on RMDs, IRMAA and the surviving spouse.
• Doing large Roth conversions at 61 or 62 while on an ACA plan and losing the entire premium tax credit at the 400% cliff.
• Forgetting that income at 63 sets Medicare premiums at 65, so the IRMAA lookback starts two years before Medicare does.
• Filling the 22% bracket at 66 without noticing that the 2026 IRMAA tier of $218,000 is lower than the top of the bracket for a 65+ couple.
• Claiming Social Security early and then trying to convert in the range where each dollar also makes Social Security taxable.
• Using one conversion amount every year instead of resetting the ceiling as health coverage, Social Security and RMDs change.
• Assuming RMDs start at 73 for everyone, when anyone born in 1960 or later starts at 75.