A couple retiring at 62 with $1.4 million paid near-zero federal taxes for 8 years by sequencing taxable, IRA, and Roth accounts strategically.
Converting between $60,000 and $70,000 annually to Roth while staying inside the 12% bracket kept their tax bill in the single-digit thousands and maximized tax-free growth.
Delaying Social Security to 70 added 8% per year to their lifetime benefit while the Roth conversions avoided Medicare IRMAA surcharges above $218,000 MAGI.
A Bogleheads thread last spring described a couple who retired at 62 in 2018 with roughly $1.4 million split across a taxable brokerage, a traditional 401(k), and a small Roth. Eight years later, they had paid almost no federal income tax, converted a large share of the 401(k) to Roth, and were about to file for Social Security at 70 with a maxed-out benefit. The trick was a deliberate sequencing strategy built around the gap years between retirement and required minimum distributions.
Monkey Business Images / Shutterstock.com
Why the 62-to-70 Window Is the Most Valuable Tax Real Estate You Will Ever Own
Once Social Security and RMDs both switch on, ordinary income becomes largely involuntary. Before they do, a retired couple controls almost every dollar that hits their 1040. That control is what makes the eight years between early retirement and age 70 the single most important tax-planning window in a saver’s life (we sized up that quiet window, and how to use it, in a free Roth guide here: The Roth Window).
For a married couple filing jointly, the 12% bracket runs from $23,851 to $96,950 of taxable income in 2025, with the 22% bracket kicking in at $96,951. Stack the standard deduction on top and a couple can recognize roughly $120,000 of gross income before touching the 22% rate. That headroom is the raw material for the strategy.
Learn 7 Secret Wealth Tips High Net Worth Investors Use
How do you continue to grow a seven-figure portfolio in retirement? The last thing you want is to run out of money, you want your money to generate lasting income while you enjoy your life.
Their $1.4 million was split roughly $600,000 in a taxable brokerage with a low cost basis, $700,000 in a traditional 401(k) rolled to an IRA, and $100,000 in a Roth. Each year from 62 to 70 they did three things in sequence.
Spent from the taxable account first. Long-term capital gains sit in a separate rate schedule. A married couple with taxable income under roughly $96,000 pays 0% on qualified dividends and long-term gains. Selling appreciated shares to fund $60,000 of living expenses generated almost no federal tax because the realized gain fell inside the 0% bracket.
Ran a Roth conversion ladder to the top of the 12% bracket. With no wages and no Social Security, they converted roughly $60,000 to $70,000 a year from the traditional IRA to the Roth, keeping total taxable income just under the $96,950 top of the 12% bracket. Federal tax on the conversion ran in the single-digit thousands, and every converted dollar grew tax-free thereafter.
Delayed Social Security to 70. Each year of delay past full retirement age adds 8% to the benefit for life, and the delayed benefit compounds with the annual COLA. The 2027 COLA is currently tracking toward 3.3%, which lifts the eventual check even before they claim.
Roth conversions are the piece most retirees botch, because Medicare uses a two-year lookback on modified adjusted gross income. In 2026, a joint filer with MAGI at or below $218,000 pays the standard Part B premium of $202.90 a month, while crossing that first threshold pushes the total to $284.10. Higher tiers escalate quickly, reaching $689.90 a month per person at $750,000 of joint MAGI. By capping conversions inside the 12% bracket, the couple stayed multiple tiers below the first IRMAA cliff when they finally enrolled in Medicare at 65.
What the Cash Buffer Looked Like
The plan only works if you do not have to sell stocks in a bad year to eat. They held roughly two years of spending in short-duration Treasuries and CDs. That is easier to build today than it was a decade ago: the 10-year Treasury yield is around 5%, and even the FDIC national average 12-month CD sits at 1.73%, with top online banks paying several times that.
Three Moves to Copy Before Year-End
Model your bracket, not your balance. Pull your projected 2026 taxable income and calculate how many dollars of Roth conversion fit under the $96,950 top of the 12% bracket for joint filers. That number is your annual conversion target.
Separate your gains from your conversions. Do capital-gain harvesting in years you skip the conversion, and vice versa. Stacking both in the same year can push you into the 22% bracket and the 15% capital-gains bracket simultaneously.
Watch the IRMAA lookback starting at 63. Any MAGI in the year you turn 63 sets your Medicare premium at 65. If your projected joint MAGI is within $10,000 of $218,000, shrink the conversion. The premium jump costs more than the conversion saves.
Learn 7 Secret Wealth Tips High Net Worth Investors Use
How do you continue to grow a seven-figure portfolio in retirement? The last thing you want is to run out of money, you want your money to generate lasting income while you enjoy your life.
