Retire at 61 With $480,000 in a 401(k) and a $55,000 Pension, Leave the Account Alone for 12 Years, and the First Required Withdrawal at 73 Pushes the Return Into the 22% Bracket

A couple retiring at 61 with a $480,000 401(k) plus a $55,000 pension could see their first required minimum distribution (RMD) land them in the 22% tax bracket. They leave the account untouched for 12 years, then take their first withdrawal at 73 of about $32,500, using the IRS Uniform Lifetime Table factor of 26.5. On the assumptions that they file jointly, earn 5% annually, and receive $60,000 a year from Social Security, the RMD is roughly $32,529. Only about $5,500 falls into the higher bracket, adding about $550 in federal tax. Larger “cliffs” include IRMAA.