Retirement's Hidden Tax Trap: The Order of Social Security and IRA Withdrawals

How the Wrong Order Between Social Security and IRA Withdrawals Can Raise Retirees' Tax Bills
Roughly one in four retirees claim Social Security at 62, according to the Center for Retirement Research at Boston College, while many leave traditional IRAs untouched until required minimum distributions (RMDs) begin at age 73. That default sequence can create a compounding tax burden, since every RMD dollar counts as ordinary income and raises adjusted gross income (AGI).
Up to 85% of Social Security benefits become taxable for joint filers whose combined income crosses $44,000, per the IRS. Ed Slott, founder of Ed Slott and Company, told Morningstar that voluntary distributions during low-income years can lower a retiree's lifetime tax bill, saying "the way to always pay the lowest tax over your lifetime is my 'always' rule."
Higher AGI can also trigger Medicare's income-related monthly adjustment (IRMAA). Joint filers crossing $218,000 in modified AGI see Part B premiums rise from $202.90 to $284.10 per person monthly, according to CMS's November 2025 fact sheet, with combined first-tier IRMAA surcharges adding roughly $2,300 per year for a couple.
Mercer Advisors senior wealth adviser Jack McCloskey said spending from an IRA or converting to a Roth during the years between retirement and RMDs can fill the 12% tax bracket, which runs to $100,800 for joint filers in 2026, while shrinking the balance subject to future required withdrawals. Delaying Social Security during this period also grows benefits 8% per year past full retirement age, according to the SSA, a gain compounded by future cost-of-living adjustments.