If you and your spouse have $1.6 million saved across your IRAs, and one of you dies, the surviving spouse could pay a much higher tax rate on the same retirement income. The best opportunity to reduce that future tax bill is often while you’re both alive. But if you’re already the surviving spouse, there may still be ways to soften the tax hit.
The Widow’s Penalty
They call this tax hike the “widow’s penalty” because it hits surviving spouses. The hike is triggered by a change in filing status, which usually switches from married filing jointly to single for the year after the spouse dies, unless the survivor qualifies for another filing status. Higher tax brackets then kick in at much lower income levels.
For 2026, married couples filing jointly stay in the 12% bracket until $100,800 of taxable income. Single filers leave that 12% bracket at just $50,400 and land in the 22% bracket well before hitting six figures. 1 A couple with $100,000 in taxable income is still sitting in the 12% bracket. That same $100,000, filed single, reaches the 22% bracket instead. The marginal rate on the top portion is nearly double, even though not a dollar of income actually changed.
A financial advisor can help you calculate how much the widow’s penalty could add to your future taxes.
What That Could Look Like on a $1.6 Million IRA
Assuming the surviving spouse is 75 and owns a $1.6 million IRA, the required minimum distribution (RMD) would be about $65,041. This estimate is based on the IRS Uniform Lifetime Table factor of 24.6 ($1,600,000 ÷ 24.6 = $65,041). 2
Here’s how that $65,041 would get taxed under each filing status, assuming the full amount represents taxable income and no tax credits apply:
Bracket Joint Return Single Return 10% $2,480 (on first $24,800) $1,240 (on first $12,400) 12% $4,829 (on remaining $40,241) $4,560 (on next $38,000) 22% — $3,221 (on remaining $14,641) Total Federal Tax $7,309 $9,021
Only the top portion of the distribution moves from the 12% bracket to the 22% bracket. Most of the distribution is still taxed at the lower rates, which is why the total federal tax bill goes up from $7,309 to $9,021, an increase of roughly 23% ($9,021 − $7,309 = $1,712).
Strategies to Reduce the Tax Hit
If both spouses are still alive, a Roth conversion done now can lock in today’s lower joint rate before the higher single rate ever applies. Here’s a simple example using a $100,000 Roth conversion, assuming the additional $100,000 falls entirely within the applicable tax bracket in each case:
| Example | Bracket | Taxable Amount | Federal Tax |
|---|---|---|---|
| Roth conversion now while filing jointly | 12% | $100,000 | $12,000 |
| Withdrawal later while filing single | 22% | $100,000 | $22,000 |
| Difference | $10,000 |
Your actual numbers will vary depending on how much of the conversion or withdrawal lands in each bracket.
If you’re already the surviving spouse, a Roth conversion can still make sense in some cases, though the narrower single brackets can make it a more expensive move than it would have been while filing jointly. A financial advisor can help you decide whether a Roth conversion or another strategy makes sense for your taxes.
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