Comprehensive Checklist
Pre-Retiree's Tax Planning Checklist for Arizona Residents
A practical, item-by-item checklist for Arizona pre-retirees age 55–72 — covering the decisions that should be made before retirement, not reacted to afterward. Built for the household with $1.5M+ in investable assets where coordination across Roth conversions, Social Security, IRMAA, RMDs, and Arizona-specific rules is doing most of the work.
No commitment. No sales agenda. 30 minutes.
5–10 Years Before Retirement (Ages 55–62)
The decisions you make here largely determine what your tax picture in retirement will look like.
Project the size of your pre-tax balance at age 73
Use a realistic compounding rate (5–6% net of any contributions) to estimate where each traditional IRA, 401(k), and 403(b) will be when RMDs begin. The balance, not the bracket, is what determines whether RMDs become a tax problem.Run a multi-year Roth conversion analysis — not a one-year one
A single-year conversion analysis is the most common form of bad advice. The right amount depends on your bracket, IRMAA tier exposure, Arizona's flat 2.5%, projected RMDs, and the surviving-spouse outcome. Modeling this once a year for the next 10 years is the work.Decide whether to keep maxing pre-tax 401(k) or shift to Roth 401(k)
Most pre-retirees in their late 50s should at least consider directing new contributions to Roth 401(k). The deduction today is small relative to the lifetime tax cost of those dollars going through the RMD pipeline at higher brackets later.Consolidate stranded 401(k) accounts at former employers
Multiple employer plans complicate RMD compliance (each plan's RMD must come from that plan) and rarely offer better fund choices than a low-cost IRA. Roll former-employer plans into a single IRA before 73 unless there's a specific reason not to.Review beneficiary designations on every account
Beneficiaries override your will. The 10-year rule under SECURE has changed how non-spouse heirs experience an inherited IRA — large pre-tax balances passed to working-age children can compress 20+ years of tax into 10 highest-earning years. Plan around that explicitly.Rebuild your taxable account ratio if it's too low
A taxable brokerage account is the most flexible source of liquidity in early retirement — and the one with the most favorable cost basis treatment via step-up at death. Couples whose entire net worth sits in pre-tax accounts have fewer levers to pull during the conversion window.
3–5 Years Before Retirement (Ages 60–67)
Decisions made here have the largest dollar impact across your retirement.
Lock in your Social Security claiming framework
Decide jointly with your spouse whether each of you will claim at full retirement age, age 70, or somewhere in between — and document the reasoning. Delaying to 70 raises the eventual benefit by 32% relative to FRA and keeps early-retirement income low for Roth conversions. Claiming early often does the opposite.Build a withdrawal sequencing plan that survives the next 25 years
The conventional 'taxable → pre-tax → Roth' sequence is wrong for many retirees with significant pre-tax balances. The right answer often blends pre-tax distributions and Roth conversions in early retirement, preserving Roth assets for later years when bracket flexibility is more valuable.Map your Medicare on-ramp and the IRMAA exposure two years out
Medicare premiums in 2028 are determined by your 2026 tax return. Plan large income events — Roth conversions, lump-sum distributions, real estate sales — with that two-year lookback in mind. Once you're in IRMAA, getting out is harder than staying out.Quantify your QCD opportunity once you reach 70½
If charitable giving is part of your life, the QCD limit ($108,000 in 2025, indexed annually) becomes a major tax-efficiency lever once you reach age 70½. A QCD reduces RMDs and AGI simultaneously — which itemized charitable deductions don't.Pressure-test your retirement income against a market drop
Sequence-of-returns risk in the first five years of retirement does more long-term damage than any other single factor. Stress-test the plan against a 25% portfolio drop in year one and a 4-year rebuild — not as a worst case, but as a base case for whether the income plan still works.
The Year Before Retirement
Practical year-of items that prevent expensive mistakes in the transition.
Project the year-of-retirement income carefully
The year you stop working is often a high-income year — final wages, accrued bonus, vested equity, RSU lapse, severance. Don't compound it with a large Roth conversion in the same calendar year.Decide on a health-insurance bridge to Medicare
If you retire before 65, the cost and structure of bridge coverage (COBRA vs. ACA marketplace) interacts with how aggressive your Roth conversions can be. ACA premium tax credits phase out as MAGI rises — a large conversion can cost you more in lost subsidies than it saves in future RMDs.Confirm employer-stock NUA eligibility before rolling over
If you have meaningfully appreciated employer stock inside a 401(k), the Net Unrealized Appreciation election is a one-time opportunity that disappears once the plan rolls to an IRA. Worth a deliberate review.Set up a tax projection cadence for retirement
Quarterly review meetings during the conversion window pay for themselves many times over. The math doesn't change — but your bracket headroom, your IRMAA tier exposure, and the ratio of pre-tax to Roth do, every year.
Years 1–10 in Retirement
The conversion window opens here. This is where most of the lifetime tax savings actually get captured.
Use the lowest-bracket years for the largest conversions
In years before Social Security claiming and before RMDs begin, you may have $0 of W-2 income and a controllable amount of investment income. These are the cheapest dollars to convert, and they don't repeat once Social Security and RMDs start.Manage IRMAA cliffs deliberately, not after the fact
The most common Roth conversion mistake is filling the federal bracket without watching the IRMAA cliff. A conversion that costs $25,000 in federal tax can cost an additional $4,000–$9,000 per year in IRMAA premium surcharges two years later.Begin QCDs at 70½ if you give to charity
Even modest QCDs ($5K–$25K/year) materially reduce AGI, MAGI, and the taxable portion of Social Security. They're the single most efficient charitable strategy for retirees who don't itemize.Re-run the surviving-spouse projection annually
What looks balanced at 65 may not be balanced at 80. Update the survivor outcome each year with current balances, current laws, and current claiming dates. This is one of the most consequential and most ignored items on the checklist.Coordinate Arizona property tax planning if you're moving
If you're considering a move into a new Arizona county or downsizing, property tax limits (the 1% primary residence cap) and the senior valuation freeze can produce meaningful savings — but only if you plan around them.
Arizona-Specific Items
State-level items that don't show up on a federal checklist.
Verify your Arizona residency for tax purposes
If you're a snowbird splitting time between Arizona and another state, residency status determines who taxes what — and Arizona's 2.5% rate is meaningfully better than many alternatives. Documentation matters: voter registration, driver's license, primary residence, time-spent records.Use the Arizona military/government pension exclusion if eligible
Arizona excludes up to $2,500 of qualifying military, federal, or Arizona state/local government pension income. Small but real for households with multiple pension sources.Review Arizona's community property treatment for retirement assets
Arizona is a community property state. The basis treatment of jointly held taxable accounts at the death of the first spouse is more favorable than in non-community-property states (a full step-up rather than a partial one). Title decisions matter.Plan around the Arizona Senior Property Tax Valuation Protection
If at least one homeowner is 65 or older, has lived in Arizona for two+ years, and meets the income threshold, the assessed valuation of the primary residence can be frozen for three years (renewable). For long-term Arizona residents, this is worth filing for.
Frequently Asked Questions
When should I start tax planning before retirement?
At least five years before your planned retirement date. The most valuable tax planning happens in the years between when wage income stops and when RMDs begin — usually ages 60 to 73. Starting at 55 gives you time to coordinate Roth conversion strategy, Social Security claiming, and withdrawal sequencing rather than reacting to them year by year.
What's the single most overlooked item on this checklist?
Modeling the surviving-spouse outcome. Federal brackets, IRMAA tiers, and the standard deduction all compress when the survivor switches from joint to single filing. Roth conversions during the joint-filing years are the most effective hedge — and most pre-retirees never run that projection.
Is Arizona a tax-friendly state for retirement?
Yes. Arizona has a flat 2.5% state income tax (one of the lowest in any state that taxes income), does not tax Social Security, and excludes a small amount of military and government pension income. Roth IRA qualified withdrawals are not taxed. Traditional IRA and 401(k) distributions are taxed at the flat 2.5%.
Related Resources
Want this run against your actual numbers?
The checklist is the framework. Your specific balances, brackets, Social Security claiming dates, and IRMAA exposure determine the strategy. Singh PWM is a flat-fee CFP® and Enrolled Agent practice serving Arizona pre-retirees and retirees on a fiduciary basis.
No commitment. No sales agenda. 30 minutes.