SECURE 2.0 RMD Age 75 at 63: Does Converting $100,000/Year From a $2.4M IRA Beat Waiting? The Math at $600K, $1.2M, and $2.4M

You are 63 with a traditional IRA and a spouse who is counting on the same account. Your neighbor, who is 10 years older, has been taking required minimum distributions (RMDs) since 73. You have heard that SECURE 2.0 pushed your start age to 75. Does that mean you can ignore the account for 12 more years?

Not necessarily. A later RMD age gives you a longer window to fill low tax brackets on purpose. It also gives the account more time to grow into a bigger tax bill. Whether the delay helps or hurts depends on your balance, your Social Security timing, and your filing status.

This post walks through one worked example at three balance levels. All numbers are illustrations I built, not results from a dataset. Your numbers will differ.

What SECURE 2.0 Actually Changed (and What It Didn't)

Here are the rules that matter for this decision:

RMD age 73 applies if you were born from 1951 through 1959.
RMD age 75 applies if you were born in 1960 or later.
The missed-RMD penalty is 25% of the shortfall. It drops to 10% if you correct it promptly.
Roth 401(k) accounts no longer have lifetime RMDs, starting in 2024. Roth IRAs never did.
Inherited IRAs are still governed by the 10-year rule. Some heirs must also take annual distributions during those years.

The 2026 catch-up rules also changed:

Workers 50 and older can make extra 401(k) catch-up contributions. The 2026 catch-up is $8,000, on top of the $24,500 base limit.
Workers aged 60 to 63 get a higher "super catch-up" of $11,250.
If your prior-year Social Security wages from the employer sponsoring the plan were above about $150,000, your catch-up contributions must go in as Roth. That takes away a pre-tax deduction some high earners have relied on.

Check current IRS figures before you act on any of these limits. They are indexed and change.

The Worked Example: Three IRAs, One Couple, Age 75

Here are the assumptions. Adjust them for your own situation.

Married filing jointly, both born in 1963, so RMDs start at 75.
You are 63 now, and the IRA belongs to one spouse.
Real (after-inflation) return of 2.5%. I use real dollars so I can apply today's tax brackets without guessing at future indexing.
Combined Social Security of $3,400/month ($40,800/year), claimed at 70. I treat all of it as taxable, which is close to right at these income levels.
Standard deduction of about $35,500 for a 65+ couple, using 2026 figures. I ignore the temporary senior deduction, which is scheduled to end after 2028.
The 2026 MFJ brackets are roughly 10% to $24,800, 12% to $100,800, and 22% to $211,400.
The Uniform Lifetime Table divisor at 75 is 24.6.

At 2.5% real, $1 today becomes about $1.345 by age 75. Here is what each IRA looks like if you never convert:

IRA at 63	Balance at 75 (real)	First RMD (÷24.6)	Taxable income with SS	Federal tax	Top bracket
$600,000	$807,000	$32,800	$38,100	~$4,100	12%
$1,200,000	$1,614,000	$65,600	$70,900	~$8,000	12%
$2,400,000	$3,228,000	$131,200	$136,500	~$19,500	22%

At $600K and $1.2M, waiting is not a disaster. The RMD sits in the 12% bracket, and the tax bill is modest. The pressure builds at $2.4M, where the first RMD alone pushes you into the 22% bracket. It also keeps growing as the divisor shrinks. The divisor is 24.6 at 75 and about 16.0 at 85, so the same balance requires a much bigger withdrawal.

The table shows year one. A survivor filing single after a spouse dies faces single-filer brackets on the same account, and those brackets are narrower. The $2.4M case is where that "widow's penalty" gets expensive.

This is the kind of analysis Lontevis runs for you, so you don't have to build the spreadsheet yourself.

The Conversion Alternative at $2.4M

Now suppose the $2.4M household converts $100,000 a year from ages 63 through 69. That is seven years, before Social Security starts at 70. Taxes are paid from a taxable account, not from the IRA.

The cost. With no other income, the standard deduction is about $32,200 before 65. Taxable income is $67,800:

10% on the first $24,800 = $2,480
12% on the next $43,000 = $5,160
Total ≈ $7,640 per year, or about $53,500 over seven years, an average rate near 7.6%

The effect on the IRA. Each conversion also shrinks the balance that keeps growing. In real dollars, the IRA is about $2.08M at 70 and about $2.35M at 75. That is far below the $3.23M it would reach with no conversions.

The result at 75:

	No conversion	Convert $100K/yr, ages 63 to 69
Balance at 75	$3,228,000	~$2,352,000
First RMD	$131,200	~$95,600
Taxable income with SS	$136,500	~$100,900
Federal tax	~$19,500	~$11,600
Top bracket	22%	12% (barely)

That is about $7,800 less in tax in the first RMD year, and the gap tends to widen as the divisor shrinks. The conversions also created roughly $875,000 in Roth money by 75. It has no RMDs, and heirs can withdraw it tax-free under the 10-year rule.

A rough break-even. The $53,500 you paid at 63 to 69 is recovered in about seven years of RMD-age savings, so around age 82. That ignores what the tax money would have earned in your taxable account. It also ignores the survivor scenario, where the savings are usually larger. And it ignores your heirs' tax situation.

A precise answer means comparing the after-tax value of each path, year by year. I did not run that full comparison here, and neither should you by hand. For more on this exact tradeoff, see Roth Conversion at 63 vs Waiting for RMDs at 73: How a $1.5M IRA Creates a $140,000 Avoidable Tax Bill and Roth Conversion at 64 With a $1.4M IRA: How Filling the 22% Bracket Before RMDs Saves $58,000.

When Conversion Doesn't Win

The $2.4M case is the strongest for converting. At $600K it can go the other way:

The RMD stays in the 12% bracket for years, so converting mostly swaps a 12% future rate for a 12% current rate.
If your taxable-income window is small, a conversion can push Social Security into higher taxation.
Higher reported income can also affect Medicare premiums. IRMAA looks back two years, so a big conversion at 63 can raise your premiums at 65.
If you expect to give the money to charity, qualified charitable distributions (QCDs) can send up to about $111,000 a year (the 2026 figure) directly from an IRA to charity at 70½ or older. That satisfies the RMD without adding to taxable income. See SECURE 2.0 RMD Age 73 + New QCD Rules.

For a $1.2M IRA, the answer is often "convert some, not all." A smaller annual amount that stays in the 12% bracket may capture most of the benefit with less risk.

Why the Bond Market Matters to This Decision

Two recent stories touch this plan indirectly. NerdWallet's "Why the Bond Market's Struggles Are Driving Up Mortgage Rates" reports that inflation, an AI borrowing boom, and rising government debt have pushed bond yields to their highest levels in 20 years. CNBC's "Rising Treasury yields could push car loan rates higher" describes bond yields spiking on expectations of persistent inflation and further Fed rate hikes.

For a retiree, that has two effects:

Your bridge years are cheaper to fund. If you convert from 63 to 69, you need cash outside the IRA to pay the taxes and cover living costs. Higher yields on CDs and Treasuries mean a bridge fund earns more while it waits. That helps the math.
Bond funds inside your IRA may be down. If you hold bond funds that lost value as yields rose, a conversion can move shares "in kind" at a lower price. That means more future growth lands in the Roth account. This is not a reason to convert by itself, and it does not make the tax bill smaller. Taxes are owed on the value converted.

If you are also weighing how to sell assets during a bond sell-off, see RMD at 73 on a $1.4M IRA: Should You Sell Bonds or Stocks During the 2026 Bond Market Sell-Off?

The Coverage Gap That Can Wreck a Conversion Plan

CNBC's piece "Many homeowners have a big insurance coverage gap and don't even know it" reports that many consumers are underinsured and unaware of it. That matters for retirement tax planning because of how you would pay for an uncovered loss.

Say a storm causes $60,000 in damage that insurance doesn't cover. If you pay by pulling $60,000 from a traditional IRA in a conversion year, your taxable income jumps. That can push you from the 12% bracket into 22% on part of it. It can also raise your Medicare premiums two years later. A cash reserve outside the IRA avoids that. Review your coverage before you finalize a multi-year conversion schedule, and keep a reserve that isn't tied to a taxable withdrawal.

Inherited IRAs: A Separate Clock

If you expect to inherit a traditional IRA, the 10-year rule can create a tax spike. The heir must empty the account by the end of the 10th year after the owner's death. If the owner had already started RMDs, the heir usually must also take annual distributions in years one through nine. Missing those triggers the same penalty structure as a missed RMD.

Here is a simple illustration. A $400,000 inherited IRA emptied evenly over 10 years is $40,000 a year, layered on top of your own income. If you are also converting or taking your own RMDs, the combined income can move you up a bracket. Timing your own conversions around an expected inheritance can matter as much as the conversion itself. See Inherited IRA 10-Year Rule + SECURE 2.0 RMD at 73 for a worked case.

What Determines Your Answer

Every input below can flip the result:

Your variable	Pushes toward converting	Pushes toward waiting
IRA balance	Large enough that RMDs reach 22%+	Small enough that RMDs stay in 12%
Filing status later	Likely to become single	Married for the foreseeable future
Social Security timing	Delay to 70, leaving low-income years	Claiming early, filling the low brackets already
Heirs' tax bracket	Higher than yours	Lower than yours
Health and life expectancy	Long family longevity	Shorter expected horizon
Cash outside the IRA	Enough to pay conversion taxes	Would have to pay taxes from the IRA
Charitable giving	Little or none	Substantial, so QCDs handle RMDs

If the third-to-last row surprised you, it shouldn't. Paying conversion taxes out of the IRA itself weakens the whole strategy, because you shrink the amount that gets to grow tax-free.

Every number in the table above is an input a calculator needs. That's why a generic answer rarely fits. You can model this for your specific balance, bracket, and Social Security plan at Lontevis.

A Calm Way to Decide

Retirement tax decisions are high-stakes, but they reward patience over speed. A sensible order of operations:

Find your birth year and confirm your RMD start age (73 or 75).
Project your first RMD at that age using your current balance and a realistic growth rate.
Add Social Security and other income, then see which bracket you land in.
Compare that bracket to the one you're in during the years before RMDs. If the gap is large, conversions deserve a serious look.
Test the survivor case. Rerun the same numbers using single-filer brackets.
Check the side effects: Medicare premiums, Social Security taxation, and the cash you'll need outside the IRA.

If you're still working, also think about catch-up contributions. At 60 to 63, a super catch-up of $11,250 in a 401(k) is only useful if you can afford it. If your prior-year wages are above the threshold, those dollars go in as Roth, so you lose the deduction and gain future tax-free growth.

Run Your Own Numbers

The example above used a $2.4M IRA, a $3,400/month combined benefit, and a 2.5% real return. Your situation almost certainly differs on at least one of those. A $100,000-a-year conversion that suits one household can push another into a bracket or premium surcharge it didn't need to hit.

Before you decide when to start converting, model your own inputs. Lontevis lets you compare withdrawal sequences, Roth conversion amounts, and Social Security timing side by side. That way you can see how your RMD at 73 or 75 changes with each choice, and make the decision with your own numbers instead of a rule of thumb.

This post is educational and uses illustrative examples, not personalized tax or investment advice. Tax law and IRS limits change, so verify current figures before acting.

Sources

This Tahoe Hotel Got a Glow-Up, but Missed a Few Spots — NerdWallet Retirement
National Coffee Day: Where to Find Free Coffee and Deals on Sept. 29 — NerdWallet Retirement
Many homeowners have a big insurance coverage gap — and don't even know it — CNBC Personal Finance
Rising Treasury yields could push car loan rates higher, experts say. What buyers need to know — CNBC Personal Finance
Why the Bond Market’s Struggles Are Driving Up Mortgage Rates — NerdWallet Retirement