Income for single-filers
Income for married couples filing jointly
Marginal Income Tax Rate

$640,601 or more
$768,701 or more
37%

$256,226 to $640,600
$512,451 to $768,700
35%

$201,776 to $256,225
$403,551 to $512,450
32%

$105,701 to $201,775
$211,401 to $403,550
24%

$50,401 to $105,700
$100,801 to $211,400
22%

$12,401 to $50,400
$24,801 to $100,800
12%

$12,400 or less
$24,800 or less
10%

Tax Brackets Can Be Used To Help Guide Your Withdrawal Strategy

Patrick Huey, a CFP and owner of Victory Independent Planning, suggests that knowing where you fall within the tax brackets can help you make smarter decisions about which accounts you want to tap in retirement—and in what order—to minimize taxes.

“The truth is, most retirement income—Social Security, pensions, and RMDs from IRAs and 401(k)s—remains taxable, and the order and timing of withdrawals can have a huge effect on your tax bill,” said Huey.

For example, distributions from accounts like 401(k)s and traditional IRAs, are included in your taxable income and are taxed at ordinary income tax rates. If you’re not paying attention to where you fall within the tax bracket, the additional income from retirement account distributions can accidentally push yourself into a higher tax bracket.

Why This Matters to You

Income from certain retirement accounts, like 401(k)s and traditional IRAs, are taxable, so understanding what your income tax bracket is can help you decide which accounts to tap and how much to withdraw. You’ll want to know how much income you’ll have from these accounts, plus others, in 2026 so you know which bracket you fall into and what your tax bill will be come 2027.

Bill Shafransky, a Senior Wealth Advisor at MONECO Advisors, recommends that people who are on the cusp of higher tax brackets consider pulling money from other sources, such as savings accounts or even taxable brokerage accounts.

This is because selling assets in a taxable brokerage account could result in a long-term capital gain. Since long-term capital gains tax rates are lower than ordinary income tax rates, you could save money by paying capital gains tax instead of ordinary income tax.

“So if we can keep people underneath that next bracket, that’s massively powerful for them, not just in the short-term, but also the long term as well,” Shafransky said.

Another consideration that retirees should keep in mind are RMDs. Starting at age 73, people generally must take withdrawals from 401(k)s and traditional IRAs.

“RMDs are a common bracket-buster—forcing you to take taxable income from your IRAs or 401(k)s even if you don’t need it, often bumping people into higher brackets…,” Huey said.

Roth Conversions For the Win?

Because RMDs can result in hefty tax bills later in retirement, Valega is a fan of Roth conversions, as Roth accounts are not subject to RMDs.

During a Roth conversion, you move money from a pre-tax account, like a traditional 401(k), into a Roth account. When you do a conversion, that money is included in your taxable income, which means you have to pay income tax on the converted amount.

“My high net worth clients [assets of $5 million or more] often find their projected RMDs at age 75 to be multiple hundreds of thousands. If we don’t need all that income, we definitely want to take a look at possible Roth conversion strategies before RMD age,” said Valega. “That way, when we do take the income or our kids inherit IRAs, the withdrawals [generally] will not be taxed.”

To figure out the right time to do a Roth conversion, Shafransky recommends doing it during a year when you’re in a lower tax bracket.

“Knowing if there’s a little bit of a lull in the first couple years or first decade of retirement … that would then argue for us to do some Roth conversions,” said Shafransky. “Let’s pay taxes at that very low rate, which would then bring down the projected future taxes later on in retirement.”

Ultimately, Shafransky suggests that retirees seek professional advice if they’re not sure what the right strategy is.

“But if you can really digest and understand how the numbers work—or work with somebody who does—that can not only save you significant money over time, but also potentially [save your] children and heirs [money],” Shafransky said.