At 65, the rules change completely. The ACA subsidy cliff is gone. Medicare is available. Required minimum distributions (RMDs) haven't started. Social Security can still be delayed. For most retirees, this is the single best opportunity to reshape their lifetime tax bill.
This article covers retirement income planning from age 65 and beyond. For the mechanical steps of setting up your retirement paycheck, see How to Create Your Retirement Paycheck. For the pre-Medicare early retirement phase, including ACA management, penalty rules, and early Roth conversion strategy, see Retirement Planning Before Medicare (Under 65).
Three Milestones That Define This Phase
Age 65: Medicare begins - ACA subsidy constraints disappear. You can now pursue Roth conversions as aggressively as your tax bracket room allows. IRMAA becomes the new income guardrail.
Age 62-70: Social Security begins - Social Security can start at 62, but delaying to 70 gives you the highest possible monthly benefit. Each year you delay also keeps Social Security income off your Modified Adjusted Gross Income (MAGI), preserving room for Roth conversions. Once you start Social Security, that income is permanent and it fills tax brackets that could have previously been used more strategically.
Age 73 (75 if born after 1960): RMDs begin - RMDs force mandatory IRA withdrawals based on your account balance and life expectancy. Every dollar converted to Roth before this point is one less dollar subject to mandatory withdrawals and one less dollar taxed at higher rates.
IRMAA: The New Income Guardrail
With ACA gone, IRMAA (Income-Related Monthly Adjustment Amount) is now the primary reason to manage income carefully. Medicare uses your income from two years prior to set your Part B and Part D premium surcharges, so income in 2026 sets your 2028 Medicare premiums.
IRMAA brackets (2026, based on 2024 income):
| Married Filing Jointly | Single | Monthly Surcharge | Annual Extra Cost (per person) |
|---|---|---|---|
| $218,000 or less | $109,000 or less | None | None |
| $218,001 - $274,000 | $109,001 - $137,000 | +$95.70 | $1,148/yr |
| $274,001 - $342,000 | $137,001 - $171,000 | +$240.40 | $2,885/yr |
| $342,001 - $410,000 | $171,001 - $205,000 | +$385.00 | $4,620/yr |
| $410,001 - $749,999 | $205,001 - $499,999 | +$529.60 | $6,355/yr |
| $750,000 or more | $500,000 or more | +$578.00 | $6,936/yr |
A Roth conversion that crosses into the next IRMAA tier doesn't just raise your tax bill, it adds a real, measurable cost to your Medicare premiums two years later. Factor this into your year-end planning.
You can appeal IRMAA after a life event. If your income drops significantly due to retirement, divorce, or the death of a spouse, you can appeal IRMAA using Form SSA-44. Medicare will reassess your surcharge based on more recent income.
Social Security Timing
Every year you delay beyond age 62 increases your monthly benefit by approximately 6-8% per year. At 70, your benefit is roughly 75% higher than at 62. But the tax planning argument for delaying is just as powerful as the income argument.
Taking Social Security early adds permanent ordinary income to your MAGI every year for the rest of your life. That income fills tax brackets, reduces your room for Roth conversions, and can push you above IRMAA thresholds permanently. Every year you delay is another year of lower income - more room to convert IRA money to Roth at lower rates.
If you haven't started Social Security yet, consider delaying as long as possible - ideally to 70.
| Claiming Age | Benefit Level | What It Means |
|---|---|---|
| Age 62 | ~70% of base benefit | Permanent reduction. Locks in lower income for life. Consider if health is poor or funds are critically low. |
| Age 67 | 100% of base benefit (full retirement age) | Full benefit. Reasonable if health concerns exist. Still leaves some Roth conversion room. |
| Age 70 | ~124% of base benefit | Maximum payment. Longest Roth conversion window. Best for healthy individuals. Permanently raises inflation-adjusted income. Maximizes survivor benefit. |
The Withdrawal Order After 65
| Account | How to Use It |
|---|---|
| Taxable brokerage (use first) | Sell funds to create your spending bucket while taking advantage of long-term capital gains that are taxed more favorably than ordinary income rates. Use this account to pay taxes on Roth conversions to keep more inside Roth growing tax-free. |
| Tax-deferred (Traditional IRA/401k) (fill lower brackets) | Consider drawing from IRA/401(k) accounts intentionally to fill up at least your standard deduction, but also consider the 10% and 12% brackets. If your spending doesn’t require that much, consider Roth conversions. RMDs will eventually force you to draw from these accounts making this your primary spending account after age 73 (or 75 if born after 1960) |
| Tax-free (Roth IRA/401k and HSA) (use strategically) | Use HSA withdrawals for medical expenses, including Medicare premiums. Roth funds can fill spending gaps without raising your MAGI or triggering IRMAA surcharges. |
For the step-by-step mechanics of calculating your spending need, rebalancing, and setting up your auto-transfer, see How to Create Your Retirement Paycheck.
Roth Conversions
This can be the most important annual action of the 65-75 phase. Done consistently, it can move hundreds of thousands of dollars from IRA to Roth at low tax rates, permanently reducing the RMDs you'll eventually be forced to take, and the taxes your heirs will owe.
The Roth conversion process, step by step:
- Tally all income for the year (including capital gains, dividends, interest, any IRA withdrawals already taken).
- Identify the top of the 22% bracket or first IRMAA tier (whichever is lower) and subtract your current MAGI (modified adjusted gross income) to find your safe conversion room
- Log into your IRA and initiate the conversion to Roth for that amount
- Pay the tax bill from your taxable brokerage account (if possible) - not from the IRA itself. Every dollar kept inside the Roth compounds tax-free for decades.
The 12% sweet spot: The 12% bracket holds up to $100,800 of income (married) plus the standard deduction and senior deductions - a combined ceiling around $148,300 in total income. For most retirees, filling this bracket every year with Roth conversions is a top consideration.
The IRMAA Tier 1 sweet spot: If future RMDs project to push you into much higher brackets, it can make sense to go past the 12% bracket and into the 22% bracket up to the IRMAA Tier 1 line at $218,000 (married). Every dollar converted at 22% now is a dollar that won't be taxed at 24-37% later through forced RMDs.
Example Scenario:
A retired couple, age 67. IRA balance: $1,200,000. Roth: $180,000. Taxable brokerage: $650,000
| Current year income | Amount |
|---|---|
| Capital gains from rebalancing | $50,000 |
| Qualified dividends | + $15,000 |
| Interest Income | + $1,000 |
| IRA withdrawals for spending | + $20,000 |
| Current MAGI before conversion | $86,000 |
Conversion calculation:
- IRMAA Tier 1 ceiling: $218,000 (married)
- Current MAGI: $86,000
- Safe conversion room: $132,000
Convert $132,000 from the IRA to Roth. Tax bill ~$28,000 (estimated 21% blended rate), paid from taxable brokerage account.
Result: IRA reduced to $1,068,000. Roth increased to $312,000. Taxable brokerage reduced by $28,000 to $622,000. Net effect: $132,000 permanently moved to Roth, never subject to RMDs and never taxed again.
“Good Problem To Have”: When the IRA is Too Big to Convert Efficiently
Some people have such a large IRA balance that RMDs, Social Security, and other income sources are projected to push them into the highest tax brackets. Those rare cases could benefit from Roth conversions past the sweet spots mentioned above, but before defaulting to huge Roth conversions, consider the financial and lifestyle impact of these alternatives:
- Spend more: Large RMDs that exceed normal spending might just indicate significant underspending during retirement
- Gift more during your lifetime: Instead of focusing entirely on leaving heirs a large tax-free Roth legacy, consider gifting more during your lifetime when you can see the impact and they can put it to use earlier when it might matter more.
- Give to charity through QCDs: After age 70.5, Qualified Charitable Distributions allow you to transfer money directly from your IRA to a qualifying charity. The withdrawal counts toward your RMD, but is completely excluded from taxable income..
The Key Numbers for Post-Medicare Planning (2026)
| Threshold | Single | Married |
|---|---|---|
| 12% bracket top (taxable income) | $50,400 | $100,800 |
| 22% bracket top (taxable income) | $105,700 | $211,400 |
| 65+ Senior Deduction phase-out starts* (MAGI) | $75,000 | $150,000 |
| IRMAA tier 1 starts (based on 2024 MAGI) | $109,000 | $218,000 |
| IRMAA tier 2 starts (based on 2024 MAGI) | $137,000 | $274,000 |
*New Senior Deduction: Starting in 2025, taxpayers age 65 and older receive an additional deduction on top of the standard deduction: $6,000 per person (so $12,000 for a married couple where both spouses are 65+). This effectively raises the income threshold at which you start paying taxes, creating more room for IRA withdrawals and Roth conversions at lower rates than younger retirees have access to.
The Bottom Line for Post-Medicare Retirees
Medicare is active. ACA constraints are gone. RMDs haven't started yet. Social Security can still be delayed to 70 for maximum benefit and maximum conversion room. This is the phase where deliberate, consistent Roth conversions can permanently reshape your tax situation for the rest of your life. Every dollar moved to Roth now is a dollar that will never appear on a tax return again, will never force an RMD, and will pass to your heirs completely tax-free.
A little planning each year, before year-end, when you still have time to act, compounds into a dramatically lower lifetime tax bill, both for you and your potential heirs.
These retirement planning strategies can adjust year by year with tax law changes. Blind spots are common, so this can be a good time for a check-in with a Nectarine advisor to get a second set of eyes on your plan.
Retirement Planning Blog Series:
A quick note: this article is meant to educate, not to substitute for personalized advice. The tax figures, income thresholds, and strategies discussed here reflect 2026 estimates and change every year - and how they apply to your specific situation depends on factors I can't account for in a general guide. Before acting on anything in this series, it's worth talking through your specific numbers with a qualified financial or tax advisor.