The years between age 59½ and 73 represent a unique opportunity that many retirees overlook. During this window, you often have more control over your taxable income than at any other point in your life. Taking proactive steps now can save you a significant amount in taxes over the course of your retirement.
Taking Control Of Your Tax Runway
Once you reach age 59½, a new level of flexibility opens up. You can begin rolling 401(k) assets into IRAs without penalty, which allows for more intentional investment design and better tax coordination. Because you are not yet forced to take Required Minimum Distributions (RMDs), you have a “clean runway” to decide exactly how much income you want to show on your tax return each year.
This is the ideal time for strategies like Roth conversions. Instead of waiting for the IRS to mandate your withdrawals later in life—potentially pushing you into higher tax brackets—you can intentionally fill up lower tax brackets today. By moving money into a tax-free environment now, you reduce the future pressure on your plan and create more predictable outcomes for the years ahead.
However, this window requires careful coordination. For example, if you are married and your combined income exceeds certain thresholds, you must stay mindful of Medicare premium surcharges. Effective planning isn’t just about one-off tactics; it’s about making sure your tax strategy, health care costs, and income needs all work together. There are several critical decisions to make during this transition, and the tax window is one of the most impactful.
Key Takeaway
The period before RMDs begin is your best chance to intentionally manage your tax brackets and reduce your lifetime tax bill.
Want To See How This Works In Your Plan?
To ensure you aren’t missing the critical decisions required for a successful transition, download the guide below. Download the Retirement Ready Checklist
Full Script
The years between 59½ and 73 might be the most valuable tax planning window you’ll ever have. Here’s why, from a CFP® professional.
After 59½, you can start rolling 401(k) assets into IRAs without penalty. This opens up flexibility in investment design and tax coordination. Before 73 or 75, depending on the year you were born, you have a clean runway. No Required Minimum Distributions forcing taxable income.
This is where proactive tax planning actually works. Roth conversions can help you fill up lower tax brackets intentionally instead of being pushed into higher brackets later. But you do need to watch out for Medicare premium surcharges that start kicking in above $218,000 of combined income in 2026, if you’re married.
There are actually 10 critical decisions to make when you are getting ready to retire. Learn about all of them with the Retirement Ready Checklist through the link in my bio.