The Average 65-Year-Old Has $267,900. Here’s the Tax Bracket Surprise Waiting at 73.

1 month ago 20

David Beren

Tue, July 7, 2026 astatine 8:40 AM CDT 5 min read

Quick Read

Baby Boomers mean $267,900 successful workplace status plans, but each untaxed dollar faces mandatory IRS withdrawals starting astatine property 73.
Combined RMDs and Social Security income tin propulsion a retired mates from the 12% to 22% taxation bracket successful a azygous year.
Roth conversions, aboriginal pre-tax withdrawals, and QCDs up to $108,000 annually springiness retirees 3 tools to shrink aboriginal RMD taxation bills.
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The mean American successful the 65-to-69 property bracket has astir $251,400 saved successful their 401(k), according to Fidelity's astir caller analysis. Baby Boomers arsenic a procreation are sitting connected somewhat more, with an mean equilibrium of $267,900 successful workplace plans and an mean IRA equilibrium of $257,002. On paper, that looks similar a workable nest ovum heading into retirement. The occupation is what happens 8 years later, erstwhile the IRS stops letting that wealth beryllium untouched.

An older antheral with grey hairsbreadth and a bluish collared garment underneath a grey sweater sits adjacent to an older pistillate with abbreviated grey hairsbreadth and a achromatic polka-dotted shirt. Both are looking intently astatine a stack of achromatic papers the pistillate is holding. On the woody array successful beforehand of them, determination is simply a airy bluish mug, an unfastened notebook, and colorful barroom charts. The inheritance is simply a softly blurred indoor setting.

The Balance Looks Fine. The Tax Treatment Is the Catch.

Every dollar successful a accepted 401(k) oregon IRA has ne'er been taxed. The authorities deferred the measure alternatively than passing it. Under existent rules, required minimum distributions statesman astatine property 73, and the archetypal withdrawal is owed by April 1 of the twelvemonth aft a retiree turns 73. The organisation is calculated utilizing an IRS beingness expectancy table, and the magnitude lands connected the taxation instrumentality arsenic mean income, whether the retiree needs the currency oregon not.

This is the taxation effect that arrives astatine 73. A retiree who spent years reasoning of their 401(k) arsenic "their money" discovers that a information indispensable beryllium withdrawn and taxed connected a docket the IRS sets.

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Where the 2026 Brackets Actually Bite

The 2026 national taxation brackets taxation a azygous filer astatine 12% connected income implicit $12,400, 22% connected income implicit $50,400, and 24% connected income implicit $105,700. For joined couples filing jointly, the 22% bracket starts astatine $100,800 and the 24% bracket astatine $211,400. The modular deduction for associated filers is $32,200, and $16,100 for singles. Consider a 73-year-old mates with $500,000 combined successful pre-tax accounts, positive Social Security.

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