A pension covered every bill for eleven years while two traditional IRAs quietly compounded, and then the IRS sent its first letter. What arrived at 73 caught this couple off guard, and the real cost had nothing to do with\u2026<\/p>\n
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Let\u2019s start by considering a couple retiring at 62. His pension covers the mortgage, the groceries, the property tax, and the trip to see the grandkids twice a year. Two traditional IRAs, hers and his, hold a combined $650,000 on the day they stop working, and they never take a distribution. Now imagine that eleven quiet years have passed, and then the first required minimum distribution<\/a> letter arrives, followed by a second, and the number attached to those letters is larger than either of them planned for.<\/p>\n This pattern is fairly common. Pension income covers essentials. The IRAs sit as \u201cjust in case\u201d money. Leaving them untouched often costs more than it saves.<\/p>\n What The First Distribution Actually Looks Like<\/p>\n Required distributions from a traditional IRA now begin at age 73 under SECURE 2.0<\/a> for anyone born between 1951 and 1959. The amount is calculated by dividing the prior year-end balance by a life expectancy factor from the IRS Uniform Lifetime Table. At 73, that factor is 26.5.<\/p>\n Assume the $650,000 grew at roughly 5% a year for eleven years. The combined balance at 73 sits near $1.11 million, producing a first-year required distribution close to $42,000. At 7% growth, the balance reaches about $1.37 million, with a distribution near $51,700. At 3%, roughly $900,000 with a distribution around $34,000. The growth rate assumption drives the entire number.<\/p>\n Two IRAs, Two Separate Rules<\/p>\n Each spouse\u2019s account is subject to its own required distribution, calculated on that spouse\u2019s balance and age. A person with several IRAs may total required amounts across their own accounts and withdraw from whichever they prefer. A spouse cannot do this for the other spouse. His distribution cannot come from her IRA, and hers cannot come from his.<\/p>\n Missing the deadline triggers a 25% excise tax on the shortfall, reduced to 10% if the amount is withdrawn and reported within a correction window. Couples who assume they can consolidate the withdrawal into the larger account may discover the penalty on the account they skipped.<\/p>\n One important exception applies here. If a spouse is the sole beneficiary and is more than ten years younger than the owner, the Joint Life and Last Survivor Expectancy Table applies instead of the Uniform Lifetime Table. This produces a smaller required distribution for the rest of the owner\u2019s life and changes the arithmetic materially for couples with an age gap.<\/p>\n Cost Was In The Eleven Quiet Years<\/p>\n For eleven years, this couple filed jointly on pension income alone. The 2026 12% bracket for married couples filing jointly runs to $100,800, with the standard deduction at $32,200. Every year they lived under that ceiling, the room between their taxable income and the top of the 12% bracket was room they could have used to convert IRA dollars to Roth dollars<\/a> at a known, low rate. That room does not carry forward. It expires each December.<\/p>\n Partial conversions during those years would have reduced the balance hitting the distribution table at 73. Instead, the full balance arrives intact, on top of the pension, pushing top dollars into the 22% bracket, which starts at $100,800. This is the setup we walked through in a free guide on defusing the first-year tax bomb<\/a> before required withdrawals begin.<\/p>\n What Stacked Income Triggers<\/p>\n Distributions plus the pension also change how Social Security is taxed and can push you over Medicare income-related monthly adjustment amounts<\/a>. For 2026, a joint return with MAGI above $218,000 pushes each spouse\u2019s Part B premium from $202.90 to $284.10, with a matching Part D surcharge. The thresholds are strict; crossing a bracket by a dollar effectively doubles the cost for a couple.<\/p>\n Survivor Problem That Follows<\/p>\n The heaviest risk appears later. When one spouse dies, the survivor keeps the larger Social Security benefit. The pension may continue at a reduced percentage or stop entirely. The deceased spouse\u2019s IRA rolls to the survivor, consolidating the balance. Household income drops while the account grows relative to it. The survivor files under single brackets, where the 22% rate starts at $50,400, and single IRMAA thresholds, where the first surcharge tier begins at $109,000. The same required distribution now falls on less income at higher rates. The same required distribution then falls on less household income at higher marginal rates.<\/p>\n What Remains After 73<\/p>\n Once distributions have begun, a qualified charitable distribution<\/a> can satisfy the requirement without the amount appearing in adjusted gross income. It is available beginning at age 70\u00bd, with an annual per-person limit indexed for inflation, and it must go directly from the IRA to a qualifying charity. For a couple that already gives, routing the gift through the IRA rather than writing a check protects MAGI and can keep the household under the next IRMAA cliff.<\/p>\n Withholding federal tax directly from the distribution is also simpler than quarterly estimates and is treated as paid evenly through the year. With a 10-year Treasury yield<\/a> near 4.94% and the national average one-year CD at 1.71%, the reinvestment decision on what is left after tax also matters, though it is a smaller lever than the bracket and IRMAA work.<\/p>\n The deadline recurs every December. For this couple, the eleven quiet years were the expensive ones. The distribution itself is the smaller part of the story.<\/p>\n