At a glance
- A $4 million IRA at age 80 carries an RMD near $200,000.
- A couple with $275,000 of taxable income would see their top federal rate rise from 24% to 35% under 2026 brackets if the survivor files single, and face a higher IRMAA tier.
- The SECURE Act's 10-year rule can turn a $2 million inherited IRA into a decade in the 32% bracket for a married child earning $300,000.
An Oct. 30 InvestmentNews opinion piece quantifies how RMDs, survivor filing and inherited IRAs can push clients into higher tax brackets.
A $4 million IRA at age 80 carries an RMD near $200,000. With Social Security, that can lift a couple from the 22% bracket to 24% and past the first IRMAA threshold.
A couple with $275,000 of taxable income would see their top federal rate rise from 24% to 35% under 2026 brackets if the survivor files single, and face a higher IRMAA tier.
The SECURE Act's 10-year rule can turn a $2 million inherited IRA into a decade in the 32% bracket for a married child earning $300,000. That adds more than $550,000 in federal tax.
Advisors can use the $550,000 figure to start the conversation during a client's income valley, before RMDs and single filing start.
What this means for advisors
Act in the income valley
Between retirement and the start of Social Security and RMDs, a client's rate may be the lowest they will ever pay.
Plan while both spouses can
At $275,000 of taxable income the survivor's top rate goes from 24% to 35% under 2026 brackets. Decide before the first death.
Show heirs the decade
A $2 million inherited IRA spread over 10 years at 32% adds more than $550,000 in federal tax.
Reported by the Tax & estate planning desk from InvestmentNews. Published . Corrections