How much will I pay in taxes in retirement?

Q: How much will I pay in taxes in retirement?

For a married couple with $1M–$2M in tax-deferred accounts and Social Security, federal taxes typically run $8,000–$25,000/year between ages 65 and 74, then can rise sharply at age 75 when Required Minimum Distributions begin. Your effective rate depends on the mix of taxable, tax-deferred, and tax-free assets — and on whether you take action before RMDs kick in.

Key facts

The 2026 standard deduction for married-filing-jointly age 65+ is $32,200 ($15,750 base + $1,600 senior add-on each + the OBBBA bump).
Required Minimum Distributions start at age 75 for anyone born in 1960 or later (SECURE 2.0 Act, December 2022).
Up to 85% of Social Security benefits are taxable when combined income exceeds $44,000 (MFJ) or $34,000 (single).
Long-term capital gains are taxed at 0% for MFJ taxable income up to $96,700 in 2026 — a critical planning window before RMDs.
The 2026 IRMAA Tier 1 threshold (additional Medicare premiums) starts at $212,000 MAGI for MFJ, $106,000 for single filers.
Roth IRA withdrawals after age 59½ are 100% federal-income-tax-free, including all growth.
Eight states still tax Social Security benefits in 2026: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont.

Common follow-up questions

When do RMDs start in 2026?

RMDs start at age 75 for anyone born in 1960 or later (under SECURE 2.0). For those born 1951–1959, RMDs began at age 73. The penalty for missing an RMD is 25% of the amount that should have been withdrawn — reducible to 10% if corrected within two years.

Are Roth conversions worth it before RMDs?

Often yes — particularly the years between retirement and RMD age, when income is typically lowest and you can fill up the 12% and 22% brackets at controlled cost. The break-even point is usually 8–15 years depending on your future bracket and growth assumption. Run a side-by-side comparison before deciding.

How much of my Social Security gets taxed?

It depends on combined income. Below $32,000 MFJ ($25,000 single), 0% is taxable. Between $32,000 and $44,000, up to 50% is taxable. Above $44,000, up to 85% is taxable. The thresholds aren't indexed to inflation, so more retirees cross them every year.

Do retirees pay state income tax?

It depends on the state. Nine states have no state income tax at all (FL, TX, TN, NV, SD, WY, AK, NH, WA). Most states exempt some or all of Social Security. A handful (CA, NY, OR, NJ) tax 401(k) and IRA withdrawals fully as ordinary income — significant if you live there in retirement.

When this doesn't apply

These figures assume federal-only taxation, traditional 401(k)/IRA balances, and a married-filing-jointly status. State taxes, single filers, large taxable brokerage accounts, large pensions, or active business income materially change the math.

Sources

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Key facts

Common follow-up questions

When this doesn't apply

Sources

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