Couples aged 65+ can withdraw $46,700 from a traditional IRA in 2026 and owe $0 in federal income tax, thanks to stacked deductions.
Most retirees leave this space unused by waiting for RMDs at 73, risking larger future distributions that push them into higher tax brackets.
The same $46,700 ceiling applies to tax-free Roth conversions, but the senior bonus deduction enabling it expires after 2028, making each year count.
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A married couple in which both spouses are 65 or older can withdraw roughly $46,700 from a traditional IRA in 2026 and owe nothing in federal income tax on the withdrawal. The figure is the sum of deductions the IRS already allows this year, stacked in a way that most retirees never fully use. The tax-free space exists whether it is claimed or not, and unclaimed space in a low-bracket year does not roll forward. It simply expires.
Three deductions combine to create the ceiling, while the base standard deduction for married filing jointly in 2026 is $32,200, following the increase enacted by the One Big Beautiful Bill. On top of that, taxpayers 65 or older receive an additional standard deduction, and the OBBB layered on a new $6,000 senior bonus deduction per qualifying person, available for tax years 2025 through 2028. For a couple where both spouses are 65 or older, that senior bonus alone adds $12,000, and the Center for Retirement Research puts the total shield for such a couple at $46,700.
The senior bonus phases out at higher incomes. It begins to shrink at $150,000 of modified adjusted gross income for joint filers and fully phases out at $250,000. Retirees living on Social Security and moderate IRA draws sit well below both thresholds, which is precisely the demographic the provision targets.
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Two behaviors leave the room on the table. The first is delaying withdrawals until required minimum distributions kick in at age 73. That deferral looks tax-efficient in isolation, because the balance keeps compounding untaxed. The problem is that a portfolio doing its job grows during those years, and the eventual RMD arrives larger, potentially pushing the retiree into a higher bracket precisely when Social Security is already taxable.
The second behavior is drawing only what is needed to cover the year's expenses. Bureau of Labor Statistics data shows the average U.S. household spent $78,535 in 2024, and retiree spending typically runs below that figure. A couple covering essentials with Social Security and a modest pension may only pull $10,000 or $15,000 from an IRA, well under the $46,700 ceiling. The remaining space, potentially $30,000 or more, disappears at year-end.
Inflation and yields both matter for the decision. Headline PCE inflation ran at 4.1% year-over-year in May 2026, with services inflation, the category most relevant to retirees, at 3.8%. The 2026 Social Security cost-of-living adjustment came in at 2.8%, which trails headline inflation. Fixed retirement income is losing ground in real terms, and untaxed IRA withdrawals are among the few levers that can offset this loss without triggering a tax bill.
Meanwhile, the 10-year Treasury yield sits at 4.7%, near the top of its 12-month range. Money moved from an IRA to a taxable account can be reinvested at these yields, with future interest taxed at ordinary rates, but the principal is never taxed again. Money left inside the IRA will be taxed in full when it eventually comes out, regardless of what happens to rates.
The same $46,700 ceiling applies to Roth conversions. A couple with little other taxable income can convert traditional IRA dollars to a Roth up to the deduction ceiling and pay $0 in federal tax on the conversion. The converted balance grows tax-free from that point forward and has no lifetime RMD for the original owner. The senior bonus is only in effect through 2028, which narrows the window to use it on conversions.
Three practical considerations follow from the data.
Estimate taxable income for the year, including up to 85% of Social Security, before December. The gap between that number and $46,700 is the room available.
Fill the gap with either a traditional IRA distribution or a Roth conversion, depending on cash needs and estate goals.
Track the phase-out. Once modified AGI exceeds $150,000, the senior bonus starts to shrink by $60 for every $1,000 of additional income.
The provision is temporary and expires after 2028 unless Congress extends it. Space not used in a given year does not carry forward, which makes each year between now and then a discrete decision rather than a running total.
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