Here Is Why I Would Tell a 71-Year-Old With $4 Million to Spend Down the Traditional IRA First

A single 71-year-old holds $4 million across a traditional IRA, a Roth IRA, and a taxable brokerage account. Required minimum distributions begin in two years, and a common withdrawal order—taxable assets first, then traditional IRA, then Roth—can increase costs later. Leaving the traditional IRA to compound can raise the first RMD enough to push adjusted gross income into higher federal tax brackets and into Medicare IRMAA tier 2. IRMAA surcharges are based on a rolling two-year lookback and can persist for life, even though they do not appear on brokerage statements. Starting traditional IRA withdrawals at 71 and 72 can use a temporary period of lower income to fill tax-bracket space and reduce future RMD pressure.

"If she leaves the traditional IRA alone and lets it compound at a modest 5% for two years, the balance grows to roughly $2.76 million. Divide that by the IRS Uniform Lifetime Table factor of 26.5, and her first RMD lands at $104,151. Add $42,000 in Social Security and her AGI clears $146,000. That number is the trap. It pushes her into the 22% to 24% bracket and into IRMAA tier 2 for single filers (an estimated $133,000 to $167,000 band for 2026), which surcharges her Medicare Part B and Part D premiums for the rest of her life on a rolling two-year lookback."

"Her income is structurally lower right now than it is likely to be again for the rest of retirement. She is no longer working, required minimum distributions have not started, and Social Security is currently her only forced income source. That creates a rare two-year window of relatively cheap tax-bracket space she can fill on her own terms instead of waiting for the IRS to do it later."

"Withdraw $80,000 annually from the traditional IRA at ages 71 and 72, and she can largely fill the 22% to 24% bracket space before RMDs begin. That reduces the traditional IRA balance going into age 73, which lowers the first RMD and helps keep AGI below the IRMAA tier 2 threshold. The result is less federal tax and lower Medicare premiums for years afterward, because IRMAA follows the prior two years of income."

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