The Years You Don't Get Back

By Jeffrey Meenes, CFP®

Ray and Marguerite retired last year, both at 62. They had planned carefully for most of a decade, and the numbers work.

Fourteen months in, they haven't really touched the portfolio.

They take what they need from savings, watch the accounts, and put off anything that would mean a withdrawal much larger than usual. The kitchen they've talked about for six years is still on the list. When I asked what was holding them back, Marguerite said she wasn't sure — it just felt like something they should be careful about now.

They had spent years making sure they would have enough to retire. Nobody had explained what to do once they got there.

Their Caution Made Sense

For thirty years, the rules were simple and they followed them well. Put money in the retirement account. Leave it alone. Let it compound. Don't touch it early.

Then one Friday the paycheck stops, and none of those rules tell you what to do next.

The projection doesn't either. Ray and Marguerite's plan said they were on track, and it was right. But a likelihood that the money will last doesn't tell you whether to do the kitchen, which account the money should come from, or what to do while you still have choices. It tells you retirement is probably sustainable. It doesn't tell you how to use it.

So people do the thing that feels responsible, which is very close to doing nothing. Spend from savings. Leave the IRA alone. Maybe claim Social Security, since that's what it's for. Wait until you have to take money out, and take it out then.

That isn't foolish. It's the same discipline that got them here. But the discipline that builds a retirement and the discipline that uses one aren't the same thing, and nobody tells you when the switch happens.

The Window They Didn't Know They Had

Here's what was actually true about Ray and Marguerite's situation, and what nobody had told them.

They were 63. They had no paycheck. They hadn't claimed Social Security. Required minimum distributions were more than a decade away. Which meant that for the first time since they started working — and quite possibly the last — their taxable income was almost entirely whatever they decided it should be.

That's a strange kind of freedom, and it's easy to miss because it doesn't look like anything. No statement shows it. It doesn't accrue. But for a handful of years, they had more control over their tax picture than they'd had at any point while working, and more than they'd have again once Social Security and RMDs started arriving on schedules they didn't set.

The window doesn't announce itself, and it doesn't stay open.

What They Did Instead

For Ray and Marguerite, each of their instincts was pointing in the wrong direction.

They delayed Social Security rather than claiming it. That meant a larger benefit later — but the more immediate effect was that it kept their reportable income unusually low during exactly the years when low income was worth the most.

They began drawing on the traditional IRA to cover their spending, well before anything required it. The account they had been most determined to protect became the account they spent from first.

And in those same years, they converted additional amounts from the traditional IRA to a Roth — deliberately creating taxable income in years when they otherwise had almost none.

Those last two are worth separating, because they look similar and they aren't. Money leaving the IRA to fund their life is spending, and it's taxed as income in the year they take it. Money leaving the IRA to become a Roth balance isn't spending at all — it's the same dollars moving to a place where they'll never be taxed again, and where they'll never be required to take it out. Both shrink the traditional IRA. Only one of them buys groceries.

None of it was free. Every dollar they converted was taxed that year, and because Medicare premiums look back two years, what they converted at 63 and 64 would help set what they paid at 65 and 66. They sized each year's conversion with both costs in view — enough to shrink the IRA, not so much that the cost outran the benefit.

Three moves, each of which sounds like the wrong answer on its own. Taken together, during these particular years, they gave Ray and Marguerite a way to use the window they actually had.

What Closing Costs You

The alternative isn't dramatic. It's just quieter.

If they had left the IRA alone, it would have kept growing — which sounds like the good outcome until you follow it forward. A larger traditional IRA at 75 means a larger required distribution. That distribution is no longer something they can simply choose to avoid. It lands on top of Social Security, which by then they'd be receiving, and together those two set a floor under their taxable income that they no longer control.

And the effects don't stop at the tax bill. What they report can affect what they pay for Medicare two years later. The withdrawal they didn't choose to take can raise a premium they didn't expect to pay.

None of that is a catastrophe. Ray and Marguerite would have been fine either way — they have enough. But they'd have arrived at 75 with a bigger balance and fewer options, having spent a decade being careful with an asset that was quietly becoming harder to use.

That's the part worth understanding. The window doesn't close loudly. It just stops being available, and by then you're making decisions inside constraints you could have loosened years earlier.

What Changed

Their spending didn't change much, at least not at first. What changed was that money started coming from somewhere deliberate, and the reason was one they could explain.

The kitchen happened the following spring.

Not because anyone told them to spend money, and not as a reward. It happened because the portfolio had stopped being a thing they were guarding and become a thing they were using — and because they could see, finally, what using it well actually looked like. When they wrote the check, they knew which account it came from and why that account rather than another one.

That's a smaller change than it sounds and a bigger one than it looks.

Why This Is Hard to Sort Out Alone

Each of these decisions is answerable on its own. The difficulty is that each one changes the answer to the others. It's the same reason withdrawal sequencing matters, with one difference: here, the choices are on a clock.

How much you convert depends on how much you're spending. What you spend depends on where it comes from. Where it comes from affects what you report. What you report affects what you can convert next year, what you'll pay for Medicare later, and how large the distributions will be when they're no longer your choice. And when you claim Social Security sits underneath all of it, because the day that income starts is the day the window narrows.

Solve any one of them alone and you'll get a reasonable answer. Solve them together, in the years when you still can, and you often get a different one.

Ray and Marguerite weren't deciding which account to withdraw from. They were deciding what to do with a period of unusually high control, before the choices narrowed on their own.

That's the part people miss. Not because they're careless — because nobody told them the years were worth anything.

Frequently Asked Questions

What is the pre-RMD window? It's the period between when you stop working and when required minimum distributions begin. For many people that's several years — and because there's no paycheck, and often no Social Security yet, it's usually the time when you have the most control over your taxable income.

Doesn't taking money from an IRA early defeat the purpose of saving it? Not necessarily, and this is where instinct and arithmetic tend to disagree. Leaving a traditional IRA untouched means it grows — but the growth is tax-deferred, not tax-free, and eventually a portion of it must come out on a schedule you don't control. Spending from it during low-income years, or converting part of it, can leave you with more usable money later even if the balance is smaller.

Should everyone delay Social Security? No. It depends on health, other income, whether one spouse is still working, and what the household needs to cover expenses. For Ray and Marguerite it made sense, partly for the larger benefit and partly because it kept the window open longer. For someone else the answer is different, and it's worth running rather than assuming.

How do Roth conversions fit in? A conversion moves money from a traditional IRA to a Roth, and you pay the tax in the year you do it. That makes low-income years the natural time to consider one. It also removes those dollars from the balance that will eventually be subject to required distributions — which is why conversions and RMD planning are really the same conversation.

What if I've already started RMDs? Then this particular window has closed, but the coordination problem hasn't gone away. There's still planning to be done around what you draw beyond the required amount, how it interacts with Medicare premiums, and what happens to the accounts eventually. The decisions are more constrained, not absent.

If you're approaching retirement and want clarity around the decisions ahead, schedule an introductory call.

About the Author

Jeffrey Meenes, CFP®, is the founder of Meenes Wealth Partners, a fee-only, flat-fee fiduciary RIA in Shrewsbury, Massachusetts. He helps pre-retirees and retirees navigate the financial decisions surrounding the transition into and through retirement, with a focus on tax planning, retirement income strategy, and evidence-based investment management.

This content is developed from sources believed to be providing accurate information and provided by Meenes Wealth Partners. It may not be used to avoid any federal tax penalties. Please consult legal or tax professionals for specific information regarding your situation. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.