A $1 Million 401(k) In Retirement Can Still Cost You Six Figures Without These 5 Moves

"Retirement drops your income, creating a narrow window before Required Minimum Distributions (RMDs) kick in at age 73 under the SECURE 2.0 Act. During those years, you can convert chunks of your traditional 401(k) to a Roth IRA while staying in lower tax brackets. Married filers converting $190,000 annually stay in the 22% bracket. Wait until RMDs force distributions, and you could land in the 24% or 32% bracket on income you never chose to take."

"Medicare premiums are not flat. Income exceeding $106,000 for individuals or $212,000 filing jointly in 2026 triggers Income-Related Monthly Adjustment Amounts, adding $2,000 to $5,000 annually to your costs. IRMAA looks back two years, so a large Roth conversion or capital gain in your early 60s can trigger surcharges at 65. Map your income for the two years before Medicare eligibility and avoid crossing thresholds unnecessarily."

A $1 million 401(k) balance places savers ahead of 95% of Americans but exposes them to multiple tax and administrative traps that can cost six figures over a 30-year retirement. Retirement typically lowers taxable income, creating a window before Required Minimum Distributions begin at age 73 under SECURE 2.0 for Roth conversions from traditional 401(k)s to Roth IRAs while staying in lower tax brackets. A $1 million balance produces roughly $40,000 in RMDs at 73, which combined with Social Security and pensions causes uncontrolled bracket creep. Medicare IRMAA thresholds use a two-year lookback and can add $2,000–$5,000 annually. Beneficiary forms override wills and non-spouse inherited IRAs generally must be withdrawn within ten years.

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