Make Sure You Do This Before 65: The 401(k) Conversion Move That Saves Six Figures in Taxes

1 hour ago 2

Marc Guberti

Sat, August 15, 2026 astatine 5:45 PM CDT 5 min read

Quick Read

A 60-year-old mates tin person $178,000 from a accepted 401(k) to a Roth IRA successful 2026, paying $39,200 successful taxes present to prevention implicit $100,000 later.
Stacked RMDs, Social Security taxation, and Medicare IRMAA surcharges propulsion the effectual marginal complaint to astir 40%, making today's 22% bracket conversions a wide advantage.
SECURE 2.0 present forces workers earning implicit $150,000 to nonstop catch-up contributions into a Roth 401(k), strengthening the lawsuit to besides person existing accepted balances.
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A 60-year-old mates sitting connected $1.5 cardinal successful a accepted 401(k) faces a question with a existent fig attached. Do you wage astir $39,200 successful voluntary taxation successful 2026 to debar an estimated $100,000 successful beingness taxation later? The reply for astir readers successful this set is yes, and the crushed rests connected bracket mechanics you tin spot today.

A smiling Black mates sits astatine a woody table. The pistillate connected the left, wearing a yellowish shirt, holds a pen and writes successful a notebook, with a smartphone beside her. The antheral connected the right, successful an orangish button-down shirt, holds papers and looks astatine the woman. A laptop is partially disposable connected the acold right. They look engaged and joyful.

Here is the setup. You discontinue astatine 65, defer Social Security to 70, and fto RMDs deed astatine 75. Between 60 and 65 sits a five-year model wherever you power your taxable income astir completely. That model is the astir invaluable tax-planning existent property astir Americans volition ever own, and it closes quietly.

Why filling the 22% bracket is the determination

For 2026, the 22% bracket for joined filing jointly runs from $100,800 to $211,400, and the modular deduction is $32,200. A retired mates with humble involvement income and nary wages tin person astir $178,000 from a accepted 401(k) to a Roth IRA and halt precisely astatine the apical of the 22% bracket. The national taxation measure connected that conversion lands adjacent $39,200, paid from a taxable brokerage relationship truthful the afloat conversion lands successful the Roth.

That is the cost. The savings amusement up successful 3 places that compound connected each other.

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The taxation cascade you debar

Leave that $178,000 wrong the accepted 401(k) and it keeps growing. At a astir 4.5% 10-year Treasury output arsenic a fixed-income anchor and a balanced blend connected top, a 6% blended instrumentality implicit 15 years astir doubles the equilibrium earlier RMDs adjacent statesman astatine 75. Every dollar of that maturation is taxable erstwhile it comes out.

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