For People Within Ten Years of Retirement

The years from about 55 to 73 are a one-time arrangement: income drops when work stops, required distributions haven’t started, Social Security can wait, and the low brackets sit empty. What you do with that window decides the tax on the rest of your retirement, the Medicare premiums you pay, and how much the IRS takes from your heirs’ inherited IRA. The therapies below are the ones that have to be done in this window; after 73 most of them close.

They are ordered roughly by when they come up: the last working years first, the gap years second, the decisions at 62, 65 and 70 last. The contraindications at the end are for the preparers, because nearly every therapy on this page raises income in the year it is used and the cliffs are close together.

1. Max the Catch-Ups, Including the New One at 60

The IRS calls it: §414(v), as amended by SECURE 2.0

Dose for 2026: 401(k)/403(b)/457 deferral $24,500, plus $8,000 catch-up at 50 or older, or $11,250 at ages 60, 61, 62 and 63; IRA $7,500 plus $1,100 catch-up (verify all 2026 figures). Starting in 2026, catch-up contributions by anyone with prior-year FICA wages over $150,000 (verify indexed threshold) must go to a Roth account.

The super catch-up at 60–63 is new and most payroll systems default to the ordinary amount; the employee has to elect it. The Roth catch-up rule for high earners is not a penalty: Roth money in the last working years is exactly what the conversion window below is trying to create, and the employer plan must offer a Roth option or no catch-up at all for those employees. A couple both over 60 can defer $71,500 between them before employer matches. Full article: Tax Breaks for Retirement Savers.

2. The Roth Conversion Window

The IRS calls it: §408A(d)(3)

Dose: in each year between the last paycheck and the first RMD (and before Social Security starts, if it can wait), convert traditional IRA money to Roth up to the top of the 12% bracket ($100,800 joint taxable income in 2026) or the 22% bracket ($211,400), paying the tax from a taxable account, not from the IRA.

A couple retiring at 62 with $1.2 million in traditional accounts and no Roth will take RMDs at 73 of $45,000 and rising, on top of Social Security, in the 22% or 24% bracket, with IRMAA on top. Converting $80,000 a year for ten years at an average 15% rate moves $800,000 to Roth, where it grows untaxed, has no RMDs, and passes to heirs tax-free over their ten years. The conversion raises this year’s income, so it interacts with every cliff on this page; the dose is set each December with the year’s other income known. Conversions can’t be undone since 2018. Full article: Roth IRAs.

3. Reaching the Money Early: the 55 Rule, 72(t), and Roth Contributions

The IRS calls them: §72(t)(2)(A)(v), §72(t)(2)(A)(iv), §408A(d)(4)

Dose: leave the job in or after the year you turn 55 and that employer’s 401(k) can be drawn without the 10% penalty, as long as the money stays in the plan; a series of substantially equal periodic payments from an IRA works at any age but locks the schedule for five years or to 59½; Roth IRA contributions (not earnings) come out any time, tax- and penalty-free.

The common error is rolling the 401(k) to an IRA the week after leaving at 56, which forfeits the 55 rule until 59½. Keep enough in the plan to bridge the years; roll the rest if the IRA is better. A layoff at 58 is also usually the lowest-income year in decades, which makes it the first year of the conversion window. Full article: Early Withdrawals.

4. When to Take Social Security, With Tax in the Picture

The IRS calls it: §86

Dose: each year of delay from 62 to 70 raises the benefit about 7% to 8% for life; the years before benefits start are the cleanest conversion years because Social Security isn’t yet in the income that determines how much of it is taxed; and once benefits start, up to 85% is taxable above $44,000 joint of “combined income,” thresholds unchanged since 1993.

A retiree who takes benefits at 62 and converts at the same time pays tax on the conversion and pushes more of the benefit into the taxable 85%. Delaying to 67 or 70, living on the taxable account and conversions in between, and then drawing a larger benefit that is taxed on a smaller base is the textbook sequence. The 2026 senior deduction ($6,000 per person 65 and over, phasing out above $75,000 / $150,000 MAGI) rewards keeping income under those lines in the years it applies. Full article: How Social Security Is Taxed.

5. Mind the Two-Year Lookback

The IRS calls it: IRMAA, §1839(i) of the Social Security Act

Dose: Medicare Part B and D premiums for 2026 are set by the 2024 return; the first surcharge tier starts at $109,000 single / $218,000 joint of MAGI (which includes tax-exempt interest) and adds roughly $900 to $5,000 per person per year across five tiers. The year you turn 63 is the first year that counts.

A Roth conversion at 64 shows up as a Medicare surcharge at 66. The therapy is to do the large conversions before 63, keep conversions and gain-harvesting under the next tier boundary from 63 on, and file Form SSA-44 for a life-changing event (retirement, death of a spouse, divorce) to have the premium set on current income instead of the lookback year. Tier boundaries are cliffs: one dollar over costs the whole tier. Full article: Medicare IRMAA: The Premium Cliff.

6. Keep Funding the HSA Until Medicare

The IRS calls it: §223(b)(7)

Dose: $4,400 / $8,750 plus $1,000 at 55 (verify 2026), deductible, growing tax-free, withdrawable tax-free for medical costs forever, including Medicare premiums after 65 (but not Medigap); no RMDs; and after 65, withdrawals for any purpose are taxed like an IRA with no penalty.

Stop contributing the month Medicare Part A begins, and because Part A enrollment at 65 or later is retroactive up to six months, stop six months before applying. Contributions made during the retroactive period are excess contributions with a 6% annual penalty until removed. A couple who saves the receipts and lets the HSA grow has a tax-free medical fund for the years when medical costs peak. Full article: Health Savings Accounts.

7. Company Stock in the Plan: Decide Before You Roll

The IRS calls it: §402(e)(4)

Dose: on a lump-sum distribution after separation or 59½, take employer stock in kind to a taxable account; ordinary tax on the plan’s cost basis now, long-term capital gains rates on the appreciation later, no RMDs and no 3.8% surtax on that gain.

The election exists only until the stock is rolled into an IRA. For a long-tenured employee of a public company whose stock has multiplied, the difference between 15% and 24% to 37% on several hundred thousand dollars is the largest single number in this list. Full discussion on the investors’ page.

8. Pension or Lump Sum, and the Survivor Option

The IRS calls it: §402(c) and §417

Dose: a lump sum rolled directly to an IRA is tax-free at the rollover and controllable afterward (conversions, timing, the step-up on anything left in a taxable account after it comes out); a monthly pension is fixed ordinary income for life with no planning flexibility but no market risk. Colorado PERA and most public pensions allow neither a lump sum nor a rollover of the annuity; the choice there is the survivor option.

The tax side favors the lump sum for someone who will plan around it, and the pension for someone who won’t. The non-tax side (longevity, the spouse’s security, the plan’s health) usually decides, and should. One tax item that is often missed: a pension with a joint-and-survivor option paid to a surviving spouse is taxable to the survivor as a single filer, which is the widow’s penalty; see that page. Full article: Understanding the Widow’s Penalty.

9. Colorado: $20,000 at 55, $24,000 at 65

Colorado calls it: the pension and annuity subtraction, C.R.S. 39-22-104(4)(f)

Dose: each spouse 55 to 64 subtracts up to $20,000 of pension, annuity, IRA and 401(k) income (and taxable Social Security); each spouse 65 and over subtracts up to $24,000, and all taxable Social Security is subtracted on top of that at any income. From 55 to 64 the full Social Security subtraction is available only if federal AGI is $75,000 or less single, $95,000 joint; above the line, Social Security shares the $20,000 cap with the other retirement income.

This changes the conversion arithmetic: a Roth conversion at 56 is Colorado-free up to $20,000 per spouse, which makes the first $40,000 of a couple’s annual conversion cost only the federal tax. It also means the $75,000 / $95,000 AGI line is a Colorado cliff for anyone 55 to 64 who is already drawing Social Security: a conversion or a gain-harvesting year that crosses it costs several hundred Colorado dollars on top of the federal bill, so conversions in those years should be sized under it. At 65 the cliff disappears, and all taxable Social Security is subtracted regardless of income. Full article: Colorado for Retirees.