Traditional IRA vs Roth by April 15: How the $8,000 Contribution Decision at 62 Ripples Into IRMAA Surcharges and a $71,000 Annual RMD at 73
The $8,000 Question That Most People Answer Wrong
You have until April 15 to make your 2025 IRA contribution. You're 62 years old, you've got $900,000 sitting in a traditional IRA, and you're wondering: does $8,000 even matter at this point?
It matters more than you think — but not for the reason most people assume. The question isn't whether to contribute. It's which account, and how that choice compounds into a very different tax situation at age 73 when the IRS forces you to start pulling money out whether you want to or not.
Here's the scenario: Married couple, both 62. Traditional IRA: $900,000. Roth IRA: $150,000. Taxable brokerage: $200,000. Combined income this year: $130,000. They have until April 15 to make a 2025 IRA contribution. They're trying to figure out if they should put $8,000 (the 2025 catch-up limit for age 50+) into their traditional IRA for the deduction, or into a Roth IRA and pay taxes now.
The math on this decision reaches all the way to age 73. Let's work through it.
The Key Number the CNBC Article Correctly Flags
A recent CNBC Personal Finance piece on the April 15 IRA deadline highlights that income limits are the first thing to check before making a last-minute deposit. Here's the 2025 framework, which most people either don't know or have wrong:
| Filing Status | Traditional IRA Deductible? | Roth IRA Allowed? |
|---|---|---|
| MFJ, income under $126,000 | Fully deductible | Yes |
| MFJ, income $126K – $146K | Partially deductible | Yes |
| MFJ, income $146K – $236K | Not deductible | Yes (backdoor if needed) |
| MFJ, income $236K – $246K | Not deductible | Phase-out — backdoor recommended |
| MFJ, income above $246K | Not deductible | No direct Roth — backdoor only |
Our couple at $130,000 falls in the partial deductibility range. They can deduct part of a traditional contribution, but not all of it. More importantly, they can contribute directly to a Roth IRA — no backdoor required.
So the choice is real: take a partial deduction now, or pay taxes on $8,000 today in exchange for tax-free growth forever.
At a 22% marginal rate, the traditional IRA deduction saves them roughly $1,760 today. That's real money. But let's see what happens on the other side of the ledger.
What That $8,000 Grows Into — and What It Costs You at 73
If our couple puts $8,000 into the traditional IRA today, that money grows tax-deferred. At 7% average annual growth over 11 years (ages 62 to 73), it becomes:
$8,000 × 1.07¹¹ = approximately $16,840
Under SECURE 2.0, Required Minimum Distributions begin at age 73. The IRS Uniform Lifetime Table assigns a life expectancy factor of 26.5 at age 73. So that $16,840 adds roughly $635 to their annual RMD. Taxed at 22%, that's $140/year in extra tax — every year, for the rest of their lives.
That sounds manageable. But the $8,000 isn't the real problem. The whole $900,000 is.
Without any Roth conversion strategy, that $900,000 IRA grows to approximately $1.894 million by age 73. Their RMD in year one: $1,894,000 ÷ 26.5 = $71,472. Add Social Security — say $42,000 per year combined — and their gross income at 73 is over $113,000. That's before any other withdrawals. They've been pushed firmly into the 22% bracket and are now brushing against the first IRMAA Medicare surcharge threshold.
This is what the April 15 decision is actually about. Not $8,000. The trajectory of the whole account.
The IRMAA Tax Nobody Talks About Until It's Too Late
IRMAA — Income-Related Monthly Adjustment Amount — is the Medicare premium surcharge that hits when your modified adjusted gross income (MAGI) exceeds certain thresholds. For 2026, the surcharge kicks in for married couples filing jointly at approximately $212,000 in MAGI.
Our couple at $113,000 in gross income at 73 is below that — barely. But RMDs grow every year as the IRS life expectancy factor shrinks. By age 78, their RMD from the same $1.9M account (continuing to grow) could easily push MAGI past $212,000, triggering an extra $594.90/month per person in Medicare Part B premiums versus the base rate of $185/month.
That's $9,838/year in additional Medicare costs — for both of them combined. Over a 15-year retirement from 78 to 93, that's nearly $147,570 in avoidable surcharges.
This is why the Roth conversion decision at 62 isn't really a question about today's deduction. It's a question about IRMAA exposure a decade from now.
The Roth Conversion Window: Ages 62 to 72
Here's where the strategy gets interesting. Between retirement (or partial retirement) and age 73, our couple has a conversion window — years when their income is lower than it will be once RMDs and full Social Security kick in. This is the time to systematically move money from the traditional IRA to a Roth IRA, paying taxes at today's known rates to avoid taxes at unknown future rates.
The math on a 10-year Roth conversion ladder looks like this:
Scenario A: No conversions. $900K grows to ~$1.89M. RMD at 73: ~$71,500/year. Total RMD income over 20 years: $1.43M+, taxed at 22%+ throughout.
Scenario B: Convert $50,000/year from ages 62–72. Total conversions: $550,000. Tax paid on conversions at 22%: ~$121,000. Remaining IRA at 73 (approximately, accounting for ongoing growth offset by withdrawals): ~$1.0M to $1.1M. RMD at 73: approximately $40,600/year — a reduction of nearly $31,000 per year.
| Metric | No Conversions | $50K/Year Conversion |
|---|---|---|
| IRA balance at 73 | ~$1.89M | ~$1.05M |
| Year-1 RMD | ~$71,500 | ~$39,600 |
| Est. IRMAA exposure | High (mid-70s) | Low to none |
| Tax paid on conversions | $0 now / high later | ~$121,000 upfront |
| Roth balance at 73 | ~$295K | ~$1.05M+ |
RMD tax reduction over 20 years at 22%: ~$136,000. IRMAA surcharge avoidance over 15 years: ~$147,000. Combined benefit: ~$283,000 in lifetime savings against a conversion tax cost of ~$121,000. Net advantage: roughly $162,000 — and that's a conservative estimate that doesn't account for Roth assets passing tax-free to heirs.
This is the kind of sequenced analysis Lontevis runs automatically for your specific account balances, tax situation, and Social Security timing — because the conversion math changes substantially depending on your income in the gap years.
So: Traditional or Roth on April 15?
For our couple, the answer is almost certainly Roth — even if they can claim a partial deduction on the traditional side.
Here's why: they're already sitting on $900,000 of traditional IRA money that's going to generate forced taxable income at 73. Adding more fuel to that fire — even $8,000 — for the sake of a $1,760 partial deduction is penny-wise and pound-foolish. The Roth contribution grows tax-free, doesn't affect RMDs, and builds the tax-free bucket they'll need for strategic withdrawals later.
If they're above the Roth income limit, the backdoor Roth conversion (contribute non-deductible to traditional, then convert immediately) achieves the same outcome. But our couple at $130K of income qualifies for a direct Roth deposit — no gymnastics required.
The deeper question is whether they should also be doing additional Roth conversions on top of the $8,000 contribution. For a couple in the 22% bracket with 11 years before RMDs, converting up to the top of the 22% bracket each year ($201,050 of taxable income for MFJ in 2026) is often optimal — especially while Social Security is still being deferred and income is lower than it will be in retirement.
If you're working through a similar decision with a larger traditional IRA balance — say $1.5M or more — the conversion math gets even more dramatic, with six-figure tax differences between acting now and waiting for RMDs to force the issue.
Capital Gains Harvesting: The Other April Move
While you're thinking about your IRA contribution, there's a companion move worth considering if you have a taxable brokerage account. Our couple has $200,000 in taxable investments. If those holdings have appreciated, they may qualify for 0% long-term capital gains tax — a rate that applies to taxable income up to $94,050 for married couples filing jointly in 2026.
If their income this year is $130,000 and they've already deducted mortgage interest, standard deduction, and other items to bring taxable income below $94,050, they can harvest gains at zero federal tax — locking in gains, resetting their cost basis, and reducing future taxable appreciation. Combined with the Roth contribution, it's a two-pronged April tax move that doesn't require a CPA to execute, but does require knowing your actual numbers before you act.
For a detailed walkthrough of how capital gains harvesting stacks with Roth conversions in the years before RMDs, the post on cutting $54,000 in taxes before 73 walks through the sequencing in full.
The Retirement Cost Context: Why Tax Efficiency Matters More Now
One thing that's easy to overlook when optimizing for abstract tax brackets: retirement spending doesn't stay constant. Airfare surcharges are rising — airlines are adding fuel fees and bag charges that didn't exist two years ago. Travel-heavy retirees are feeling this. Gas prices are volatile, linked to geopolitical events that no one can predict. Inflation keeps eroding fixed-income purchasing power.
The case for Roth conversion isn't just about minimizing your 2035 tax bill. It's about having a tax-free bucket to draw from when expenses spike unexpectedly — without pushing yourself into a higher bracket or triggering IRMAA mid-year. A retiree with $400,000 in a Roth IRA has optionality that a retiree with $1.9M entirely in a traditional IRA simply doesn't.
Flexibility is worth money. And the window to build it is the decade before RMDs force your hand.
Your Numbers Will Differ — And That's Exactly the Point
The scenario above — $900K traditional IRA, $130K income, converting $50K/year — is illustrative. Your break-even on conversions depends on your current bracket, your projected RMD trajectory, whether you're subject to state income tax, your Social Security benefit size, and when you plan to claim it. (Social Security timing interacts heavily with conversions — delaying to 70 while converting aggressively in your early 60s is a powerful combination that deserves its own analysis.)
The April 15 deadline is real. But the more important deadline is the one that doesn't show up on a calendar: the years between early retirement and age 73, when your tax bracket is low and your ability to control income is highest. That window closes when RMDs begin. Once they start, you're on the IRS's schedule — not yours.
You can model your specific Roth conversion ladder, IRMAA exposure, and RMD trajectory at Lontevis. Enter your account balances, income, and Social Security estimates, and the optimizer shows you the tax cost of each path — traditional contribution vs Roth, convert now vs wait, claim early vs delay — with dollar amounts attached to every decision.
The $8,000 contribution is the easy part. The strategy behind it is what determines whether your retirement is tax-efficient or tax-expensive.
Sources
- Gas prices should soon start slowly easing if ceasefire holds, analysts say — CNBC Personal Finance
- How to save money on flights as airlines raise prices — CNBC Personal Finance
- There's a key number to know before making a last-minute IRA contribution by April 15 — CNBC Personal Finance
- JetBlue Premier Adding Companion Pass, Enhancing Travel Credit — NerdWallet Retirement
- Mortgage Rates Today, Wednesday, April 8: Moving Down — NerdWallet Retirement