He Took Social Security at 62 to ‘Let the IRA Grow.’ It Grew Into a $24,000 RMD at 73, Taxed in the Bracket Social Security Had Already Filled

He Took Social Security at 62 to ‘Let the IRA Grow.’ It Grew Into a $24,000 RMD at 73, Taxed in the Bracket Social Security Had Already Filled

David Beren

Tue, September 15, 2026 at 7:47 PM GMT+3 5 min read

Quick Read

• Claiming Social Security at 62 fills lower tax brackets, forcing a $24,000 RMD at 73 into the 22% bracket instead of 12%.

• Ed Slott warns retirees waste low-tax years by avoiding pre-tax withdrawals before RMDs begin, costing them significantly at 73.

• Taking voluntary IRA withdrawals or Roth conversions before Social Security begins can tax the same $24,000 at 12% instead of 22%.

• Read More: Avoid these 13 retirement mistakes before they derail your future (sponsor)

A retiree who files for Social Security at 62 and leaves the traditional IRA untouched often describes the plan as letting the tax-deferred account keep compounding. A decade later, that same account triggers a required minimum distribution that lands on top of Social Security benefits already flowing in, and the combined income can push a large slice of the RMD into a higher bracket than the retiree would have paid on voluntary withdrawals in the intervening years.

Why Grow-and-Wait Backfires at 73

Filing at 62 locks in a permanently reduced Social Security check, and it also starts a stream of income that fills the lower federal tax brackets year after year. In 2025, a single filer's first $11,925 of taxable income is taxed at 10%, and the 12% bracket runs up to $48,475.

For a married couple filing jointly, the 12% bracket runs from $23,851 to $96,950. Social Security and a modest pension can consume most of that space long before an RMD ever arrives.

When the account owner turns 73, SECURE 2.0 requires the first distribution from the traditional IRA. A $24,000 RMD stacks on top of the Social Security income already reported, so the final dollars of the distribution sit in whatever bracket the base income has already reached, frequently the 22% bracket that begins at $48,476 for a single filer.

Learn 13 Major Retirement Mistakes and Ways To Avoid Them

One investment mistake could create big risks for your retirement. Many investors make the same critical errors: being too conservative, making big bets on "sure things," or paying excessive fees. Any of those blunders can endanger your hard-earned savings.

Now you can learn the mistakes even experienced investors make (and ways you can sidestep them before it's too late) with this new guide: 13 Retirement Mistakes and How to Avoid Them from Fisher Investments. Access your complimentary copy here (sponsor)

Where a $24,000 RMD Actually Lands

Consider a single retiree with $30,000 in annual Social Security benefits and a $24,000 first RMD. Up to 85% of the Social Security check becomes taxable once combined income clears the upper thresholds, which pulls another layer of benefits into ordinary income alongside the fully taxable distribution. The last portion of that $24,000 is then taxed in the 22% bracket.

Ed Slott, the CPA and IRA specialist, has argued in recent interviews that retirees waste their lowest-tax years by refusing to touch pre-tax accounts before RMDs begin. His column ran in Morningstar earlier this month under the headline "Ed Slott: Don't Waste Your Low-Tax Years in Retirement".

Why the Squeeze Is Getting Tighter

Social Security benefits themselves are climbing. The 2027 cost-of-living adjustment is tracking toward 3.3%, with two of the three third-quarter months in. The August 2026 CPI-W reading, which feeds that calculation, came in at 328.5, up 0.4% from July. Larger checks also raise the base income the RMD stacks on top of, which pushes more of the distribution into higher brackets.

The pressure shows up in household cash flow. Average annual consumer expenditures reached $78,535 in 2024, according to the Bureau of Labor Statistics Consumer Expenditure Survey, up from $77,280 in 2023. The national personal savings rate slipped to 2.8% in the second quarter of 2026, from 6.2% in the first quarter of 2024. Retirees leaning on Social Security and forced IRA withdrawals to cover rising costs have less room to absorb a surprise tax bill.

Filling Low-Bracket Years Before 73

The window between retirement and age 73 determines the tax outcome. A retiree who delays claiming Social Security and takes voluntary IRA withdrawals or Roth conversions in the intervening years can move money out of the traditional account while the 10% and 12% brackets sit largely empty (we walked through how to shrink that first RMD bill years before it lands in a free guide: here). The same $24,000 pulled out at 65, ahead of benefits, can be taxed almost entirely at 12% instead of stacked into 22% at 73.

Three variables shape the outcome. Modeling the RMD at 73 with current IRS life-expectancy factors and today's IRA balance shows what bracket the distribution will actually hit. Partial Roth conversions in the years before Social Security begins can reach the top of the 12% bracket, which for a married couple is $96,950 in 2025. The claiming decision interacts with the conversion plan, because filing at 62 collapses the low-tax window to almost nothing.

The IRA did grow. It also grew into a tax bill that a different withdrawal sequence could have reduced.

Help Avoid These 13 Retirement Mistakes Before They Derail Your Future

One investment mistake could create big risks for your retirement. Many investors make the same critical errors: being too conservative, making big bets on "sure things," or paying excessive fees. Any of those blunders can endanger your hard-earned savings.

Now you can learn the mistakes even experienced investors make (and ways you can sidestep them before it's too late) with this new guide: 13 Retirement Mistakes and How to Avoid Them from Fisher Investments. (sponsor)

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